In New British Sentencing Guidelines, A Lesson For Americans

Posted On Wednesday, February 12, 2014

No offense to the British, but our good friends on the other side of the Pond simply can’t match the sheer awesomeness of America.

Driving on the left side of the road? A parliamentary system of government? And let’s not even talk about British cuisine. (I guess the Brits get a couple of points for Downton Abbey, Monty Python and that whole British Invasion thing, though then you have to deduct just as many for the Spice Girls, Hugh Grant and Chumbawamba. So entertainment is a wash, if you ask me).

But at least at first glance, the new guidelines on corporate fraud offered up last week by the Sentencing Council for England and Wales—the British answer to our U.S. Sentencing Commission—trump its American counterparts.

The United States sentencing guidelines on fraud and bribery have been roundly criticized for their myopic focus on loss amount and the “illusion of precise calculation” they give judges—that is, the false promise they offer to turn a matter of judgment into a simple mathematical formula. As the Seventh Circuit wrote of one particularly absurd guidelines issue last year: “One might fairly wonder why the ultimate legal and moral judgment about a defendant’s sentence should turn on a question as abstract and artificial as whether to count a married couple as one or two victims.”

The British guidelines, titled “Fraud, Bribery, Money Laundering: Corporate Offenders Definitive Guideline,” steer clear of these sorts of obscure minutiae. To be sure, there are plenty of details for English and Welsh judges to consider. But the relevant sentencing factors are phrased more broadly and leave more room for judicial interpretation.

For example, whereas the American system requires a judge to add two levels if the defendant “knew or should have known that a victim of the offense was a vulnerable victim,” the British guidelines ask the judge to evaluate the number and vulnerability of victims as just one factor in a holistic assessment of whether the offending corporation had “High culpability,” “Medium culpability” or “Lesser culpability.” For example, high culpability includes: willful obstruction of detection; planning illegal activity; corruption of public officials; and maintaining a culture of willful disregard of offenses with no effort to put into place compliance systems (for Section 7 Bribery Act only).

These categories, in turn, yield broad recommendations for suggested fines. For example, a judge should generally impose a fine of between 250% and 400% of the harm caused by the fraud if the corporation is highly culpable (Category A) but only 20% to 150% of the harm caused if the corporation has lesser culpability (Category C).

Within these ranges, courts look to a variety of factors. But instead of pretending that each of these factors can be quantified precisely, the judge is given broad discretion to reach a just result, which includeds significant fines and restitution, based on policy considerations such as removal of all gain from the entity, deterrence, and the fine’s impact on the continued employment of staff, service users, customers, and the local economy.

Effective October 1, 2014, the guidelines will apply to profit and non-profit corporations and other entities, for a range of offenses: Bribery Act of 2010, money laundering, common law fraud, and statutory fraud offenses.

Proponents of the American guidelines system often point to the wide disparities that existed in pre-guidelines sentences to beat back calls for change. The British fraud guidelines don’t even go into effect until October, so it will be a while before we know how the middle road they offer—useful guidance with more flexibility—can work in practice. But for American sentencing reformers, it’s certainly an experiment worth tracking.