John Moloney (Laois-Offaly, Fianna Fail)

I move: "That the Bill be now read a Second Time."

I am pleased to present the Bill to the House. It is a good example of law reform at its best, updating all existing fines that may be imposed in the District Court and many of those that may be imposed in the higher courts, ensuring persons can afford to pay fines imposed without causing undue hardship to them or their dependants and providing alternatives to imprisonment where a fine is not paid by the due date for payment.

To give effect to these issues, the Bill can be described under three main headings. The first, that is, the indexation of fines and the second provide an improved means of assessment and for payment of fines by instalments. The third policy issue addressed in the Bill is the question of providing alternatives to imprisonment where offenders default on payment of fines.

Any approach to the complex exercise of updating fines must be underpinned by two fundamental realities. First, because the District Court is a court of summary jurisdiction which deals only with minor offences, there must be an upper limit to the level of fine that may be imposed by that court that reflects its limited jurisdiction. Second, the updated fines in the District Court cannot be greater than the maximum fines for the same or similar offences that could be imposed in the higher courts.

The indexation of fines scheme is based on a report of the Law Reform Commission in 1991 and a review of developments in the indexation of fines published by the commission in 2002. The commission undertook an in-depth examination of the effect of inflation over time on the integrity of the imposition of fines as a penalty by the courts. It also examined systems in operation in other jurisdictions. It identified two possible avenues of reform, the standard fine system and the variable fine system. The standard fine system provides updated fine maxima for all existing fine maxima. The variable fine system, also known as a unit fine or day fine system, provides for the imposition of fines in terms of units of gravity where the monetary value in each case is dictated by the means of the offender.

The Law Reform Commission, rather tentatively, initially recommended the introduction of the standard fine system. In its review of developments in 2002 it came down decisively in favour of the standard fine system. It further examined the experience of jurisdictions in which unit fine systems were adopted and recommended caution in respect of the adoption of such a system in this jurisdiction. It considered that it would be inappropriate to adopt such a system at present and that many of the positive features of such a system could be achieved by adopting its recommendations. The Bill gives effect to the main recommendations of the commission in this respect by introducing a standard fine system and placing an obligation on the courts to conduct a means inquiry before imposing a fine.

I will explain the features of the Bill in more detail. Sections 3 to 7, inclusive, introduce a standard fine system for the District Court with five classes or categories. The monetary values of existing fines are being brought up to date such that they will now regain the value they had when first introduced or last updated. There are tables of relative money values dating back before 1922, although, as the Law Reform Commission pointed out, they become less reliable as one goes further back and, in any case, in the century before 1914 prices were very stable. The tables proposed in the Bill are based on a 1914 index of 100 which is an appropriate starting point as changes in money values before 1914 were slight such that for present purposes they can be disregarded. If one wished to be exact, it would be necessary to take a particular fine and increase its value in line with increases in the consumer price index since the fine was created. This would require a separate calculation to be made for every fine imposed in the District Court. Deputies will agree that would not be practicable. However, that level of exactitude is not necessary. Instead, the Minister for Justice, Equality and Law Reform has accepted the recommendation of the commission to have a limited number of possible maximum fines. The commission recommended between three and five classes and the Minister has opted for five. These are set out in section 2. Fines not exceeding €5,000 will in future be described in legislation as class A fines; class B fines will be fines not exceeding €4,000; class C fines will be fines not exceeding €2,500; class D fines will be fines not exceeding €1,000, and class E fines will be fines not greater than €500.

When new legislation is published after the commencement of the indexation provisions of the Bill, maximum fines will not be described in such legislation in monetary terms but instead by the class to which they will belong. Existing fines will be assigned to their appropriate classes when updated in accordance with increases in the consumer price index. In this way, all fines will have regained the value they had when first created or last updated by statute.

The clearest way to illustrate how the system will work is by giving examples. A Bill passed later this year may create an offence triable summarily with a maximum fine on conviction of, let us say, €4,000. The definitions indicate a fine falls into class B where the amount of the fine does not exceed €4,000. Therefore, the Bill would state something on the following lines: "A person found guilty of an offence under this section shall be liable on summary conviction to a class B fine", instead of the present formula which is, "A person found guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding €4,000". Similarly, if the maximum fine was €1,000, it would be described as a class D fine. In these two examples, the maximum fine within the appropriate classes are €4,000 and €1,000, respectively. The actual fine a court could impose would be those amounts or anything less that the court in its discretion considered appropriate. This system imposes no restrictions on the discretionary power of the court to impose the fine it considers appropriate in a particular case apart from the fact that a maximum is specified, as at present.

For a practical example of how the system will work, we need look no further than section 13. Section 13(6) creates an offence of knowingly or recklessly making a statement that is false or misleading for the purpose of an inquiry by a court into a person's financial circumstances. It states a person guilty of the offence shall be liable upon summary conviction to a class B fine and-or imprisonment for a term not exceeding six months or both. As a result, the fine will not exceed €4,000.

I provide some examples of how to find the appropriate level of an existing fine that has been updated to its real value. Not to update existing fines in line with inflation since they were first introduced or last increased would be to defeat the intention of the Houses of the Oireachtas which, in days gone by, had decided on the appropriate maximum fine for a particular offence. The first example is of an Act of 1935 which created an offence with a maximum fine on summary conviction of, in modern currency value, €200. To find the current value of that fine, one has to study the tables by reference to the year and the amount. The first reference is to the year, reference No. 7, that is, the years 1915 to 1944. The relevant amount is greater than €127 in the class A table. Accordingly, it will be a class A fine which has a maximum value of €5,000. A further example is a €500 fine in 1940 which was increased to €1,000 in 1990. The reference number in this case is 2, that is, between 1990 and 1996. It cannot be a class A fine as it is not more than €2,769, the amount opposite reference No. 2. Similarly, it cannot be a class B fine as it is not more than €1,731. In fact, it will be a class C fine as the most recent level of the fine was not more than €1,731 but was more than €692. Therefore, the maximum fine is now €2,500.

I emphasise that in the examples I have given there would be no change in the real value of the fines other than minor variations which might arise because this system does not rely on mathematical exactitude. I acknowledge that the District Court will take a little time to get used to the system, including calculating the euro equivalent of pre-2001 fines, but in time the system will run smoothly and it is superior to the alternatives. It is also true that most commonly imposed fines are regularly revised and kept up to date.

The Law Reform Commission recommended that, if practical, in the interests of clarity, all existing fines should expressly be allocated to their proper classes, using the method I have outlined, in a statute with long Schedules. The Minister has concluded this is not practical as it could not repay the amount of time such Schedules would take to prepare. However, it is more than just a question of the time such an exercise would take. It would also be difficult to guarantee the complete accuracy of the Schedules and accuracy is clearly essential in statutes. The commission, probably recognising the preparation of such long Schedules was not feasible, considered that Schedules should be prepared for the more common offences. Although this could have been done, it is considered that the level of fines for the more common offences will rapidly become assimilated into court procedures but that more seldom prosecuted offences, one way or the other, will have to be calculated. A single system whereby all fines have to be referred to the tables is probably the easiest to understand in the long run.

Ideally, the tables in sections 3 to 7 would be amended periodically in regulations to take account of inflation, but our advice is that this might be open to challenge in the courts. To avoid that risk, figures in the tables will have to be amended by way of primary legislation. Such amendments need not be made at regular intervals but can be made whenever increases in the consumer price index warrant it. There is nothing to prevent Ministers at any time from substantively increasing fines for offences in legislation for which they have responsibility. That would also have to be done by way of primary legislation. If required, it could mean changing a class D fine to a class C fine, for example.

The Law Reform Commission concluded in its report that a scheme should be devised to restore and maintain the real value of the fine maxima stated in criminal legislation. This is proposed in sections 3 to 7. The commission conceded that the design of such a scheme was not the simple task it might appear to be and that has proved to be the case. However, the Minister is satisfied that the scheme I briefly outlined is the fairest, simplest, most accurate and most legally sustainable method of indexing fines that can be imposed in the District Court and I have no hesitation in recommending it to the House. It is not as complex as it might at first appear to be. As the District Court begins to refer to the tables, it will quickly become accustomed to using them.

I mentioned two issues that are fundamental to the indexing of fines. As a court of summary jurisdiction, there must be a relatively low ceiling on the maximum fines the District Court can impose when dealing with minor offences. Article 38.2 of the Constitution states "Minor offences may be tried by courts of summary jurisdiction". The Attorney General has agreed that, for the present, the maximum fine a court of summary jurisdiction can impose is €5,000. Therefore, in the definition in section 2, the maximum fine the District Court can impose will be a class A fine, that is, a fine not exceeding €5,000. This can be increased by means of legislation in line with inflation when fines in general are updated.

It is not feasible to provide tables for fines the higher courts can impose. These courts can impose huge fines of many millions of euro or even unlimited fines. Such fines do not lend themselves to indexing, but we could not ignore higher court fines in preparing the legislation. To have done so would have meant that, where an offence was triable either way, the District Court fine might be higher than the maximum fine a higher court could impose. Other anomalies could also arise. A danger that might arise from such a situation is that the courts might be inclined to declare a particular offence was no longer a minor one fit to be tried summarily but had become a serious offence that must be tried on indictment. That could be undesirable. A factor the court takes into account when deciding whether an offence is a minor one fit to be tried summarily is the fine for which a person would be liable if convicted of the offence. The elimination of any appreciable difference between the maximum summary fine and the maximum fine on conviction on indictment, or the fact the maximum summary fine exceeded the maximum indictable fine in the same statute, would be likely to weigh heavily with a court in determining whether the offence had ceased to be a minor offence fit to be tried summarily.

The position of higher court fines was a conundrum for which there was no easy, obvious or ideal answer. It was concluded that one way to deal with this problem was to raise the maximum fines for certain offences that could be imposed on conviction on indictment in order that there was no danger that a District Court fine would be equal to or more than the maximum higher court fine for the same or similar offences. The system of indexing higher court fines agreed with the Attorney General is based on a multiplier system. Section 8 has a table of seven time periods and any fines of determinate amounts provided for or updated during each period are multiplied by an amount based on the increase in District Court fines during the same period. The reason that, unlike the other tables, there are not eight time periods is that the most recent would be multiplied by one; therefore, there is little point in providing for it in the table.

Many Irish statutes are old but still in operation without amendment. This does not necessarily mean that they are archaic; on the contrary, many have survived because they are clear and workable and still relevant. However, it does mean that in the older statutes fines have survived but with their values almost totally eroded by inflation. Even where statutes have been amended and fines updated or new statutes enacted, the value of fines can quickly be reduced, lessening their impact. It is not practical continually to bring amending legislation before the Oireachtas for no reason other than to update fines. A mechanism had to be found to ensure all existing fines of whatever vintage were updated and could, using the same mechanism, be updated at future dates, which could be determined as required by their loss of value. The scheme I have outlined provides such a mechanism. It is based on a recommendation of the Law Reform Commission which it reaffirmed in 2002. It will take the courts a little time to become fully familiar with the practicalities of operating the scheme, but that is unavoidable and it is a small price to pay for ensuring the value of fines enacted by the Oireachtas is maintained.

As I mentioned, the Law Reform Commission recommended in its 2002 report that the court, in determining the level of a fine in a particular case, should be able to take into account the financial circumstances of the offender and the burden the payment of the fine would have on him or her and his or her dependants. The commission further recommended that a court should have regard to such matters, irrespective of whether the effect would be to increase or reduce the fine so as to convey the principle of equality of impact on offenders of different means. The commission reiterated these recommendations in a further report in 2003.

Section 13 gives effect to those recommendations. The purpose of section 13 is to ensure that, as far as practicable, the effect of a fine on a person or his or her dependants is not significantly abated or made more severe by reason of his or her financial circumstances. For that purpose the court will be obliged to inquire into the person's financial circumstances and may then impose a fine that is higher or lower than, or equal to, the otherwise appropriate fine. The otherwise appropriate fine is the fine the court would have imposed but for section 13, having regard to all the circumstances of the case. In the District Court, no fine can exceed the €5,000 maximum that can be imposed in that court and in the case of individual fines, the fine cannot exceed the maximum for the offence for which it was imposed. In the rare cases where there is a minimum fine, the fine cannot be less than that minimum.

Section 13 replaces section 43(2) of the Criminal Justice Administration Act 1914 which it is now proposed to repeal. The 1914 Act provision, which was restricted to courts of summary jurisdiction, gave those courts power to take into consideration the means of the offender in so far as they appeared or were known to the court. Section 13 is not limited to courts of summary jurisdiction and is more extensive in its application by, for example, introducing the principle of equality of impact upon offenders of different means and by defining what is meant by "financial circumstances".

Section 14 is another ground-breaking initiative that will greatly facilitate a smoother and more efficient collection of fines in that it provides for payment of fines by instalments. This initiative was recommended in the Comptroller and Auditor General's report on the collection of fines in 2000 as a way of increasing the level of payment of fines, in particular where the offender had limited means. The high level group report on the collection of fines to the Committee of Public Accounts in 2001 also recommended that the facility of payment of fines by instalment be introduced as a necessary prerequisite to the introduction of harder-hitting enforcement methods, such as attachment of earnings. The high level group conceded that payment by instalments would place greater demands on the administration of the Courts Service, which will be the case.

Section 14 gives effect to those recommendations. It gives the courts power to direct that a fine be paid by instalments if it is satisfied that requiring a person to pay up-front by the due date would place that person or his or her dependants under undue financial hardship. At first glance, this provision might seem unnecessary, indeed slightly contradictory, in light of section 13 under which the court must, as far as practicable, inquire into a person's financial circumstances and impose a higher or lower fine than that which would otherwise have been appropriate, so that the effect of the fine on the person or his or her dependants is not significantly abated or made more severe by reason of those financial circumstances. However, a fine can only be abated or made more severe by so much, and the practical reality will be that the provisions relating to capacity to pay and payment by instalments will complement one another.

Imposing a fine is a judicial function and, similarly, any decision on whether it should be paid by instalments and the period for which the instalments should be paid are also judicial functions. However, the court may leave the amounts of the instalments and the intervals for their payment to be determined administratively by the Courts Service. The Courts Service can alter the amounts and intervals for payment, as it considers appropriate, as long as the full amount is paid by the latest date for payment as determined by the court.

There can be no doubt that a scheme for paying fines by instalments will pose an administrative challenge for the Courts Service. To lessen the burden, it has been decided that the payment by instalments system will apply only to fines in excess of €100. As soon as the system is up and running smoothly, that amount can, if necessary, be reviewed but for the present it is a prudent but relatively minor limitation on the operation of the scheme. It is also prudent to place a time limit for the full payment of the fine and the norm will be for the instalments to be spread over one year. However, the person on whom the fine has been imposed may apply to the court for an extension of the time and the court may grant the extension for a period of not more than a further year. In other words, there are no circumstances where the payment of the fine by instalments can be spread beyond two years. The extension of up to one year is by no means automatic. Before granting an extension, the court must be satisfied that the financial circumstances of the person who applied for the extension have changed to the extent that compliance with the original direction would cause undue financial hardship to the person or his or her dependants. The court must be also satisfied that the change in the person's financial circumstances is not due to his or her culpable neglect.

Discussions are taking place between the Department of Justice, Equality and Law Reform and the Courts Service at present to see if a way can be found to reduce the level of additional court sittings that the implementation of sections 13 and 14 could potentially entail. If some appropriate minor changes to the way those sections will operate are identified, any necessary amendments will be brought forward on Committee Stage.

The third major policy initiative in the Bill is at sections 15 to 17. Those sections provide the courts with three options as alternatives to imprisonment when a person defaults on payment of a fine. There is a perception that our prisons are cluttered up by persons who are there for no other reason than they did not pay a fine, which is not true. Approximately 1,500 persons were imprisoned last year for that reason but, on any given night, only approximately six fine defaulters were in prison. While these provisions, with the equality of impact and payment by instalments initiatives, should reduce those figures even further, that is not the only reason I am proposing to provide alternatives to imprisonment. It is socially desirable that prison be an option for fine defaulters only in the most exceptional of circumstances, such as where someone has a malign reason for refusing to pay the fine.

Section 15 will allow the courts to appoint a receiver to recover the fine or to seize and sell property belonging to a fine defaulter and recover from the sale of the property a sum equivalent to the value of the fine. This provision will apply only in cases of fines being imposed on conviction on indictment where the size of a fine would make the appointment of a receiver worthwhile. The powers generally of a receiver appointed under this section will be similar to receivers appointed for other purposes.

Section 16 provides the courts with the power to make an order for the recovery of the fine from the person in default. Such an order, which is called a recovery order, is of the same force and effect as an execution order under the Enforcement of Courts Orders Acts. In other words, it can be recovered as if it was a civil debt.

The third of the new alternatives to imprisonment is the power being given to the courts in section 17 to impose a community service order where a person has not paid a fine by the due date. At present, a community service order can be imposed only as an alternative to imprisonment where a person has been convicted of an offence.

Other provisions include amending the Criminal Justice Act 1951, the Criminal Procedure Act 1967 and the Criminal Justice (Theft and Fraud Offences) Act 2001. Section 4 of the 1951 Act provided for a maximum fine of £100 on summary conviction for an offence referred to in the Schedule to that Act. Similarly, section 13 of the 1967 Act provided for a maximum fine of £100 where a person pleaded guilty in the District Court to an indictable offence, apart from certain offences mentioned in that section. Both of those fines were increased to a maximum of £1,000 by section 17 of the Criminal Justice Act 1984. The sum of £1,000 was the maximum fine that could be imposed in the District Court in 1984. Accordingly, it is now proposed to increase those fines to the current maximum, namely, they will become class A fines. Section 53 of the 2001 Act allowed for the summary trial of offences under that Act if certain conditions were fulfilled. The maximum fine on conviction was £1,500. I also propose to increase that fine to a class A fine.

The Courts (No. 2 ) Act 1986 provided a scale setting out the maximum period of imprisonment on default of payment of a fine imposed on summary conviction. For example, on the third point on the scale, if the fine was between £250 and £500, the maximum term of imprisonment on default would be 45 days. This scale has been totally altered by significantly raising the amount of the fines and reducing the corresponding periods of imprisonment. For example, again taking the third point on the scale to illustrate this point, default on payment of a fine between €1,500 and €3,000 could result in a maximum prison sentence of 20 days. Imprisonment is the ultimate sanction for non-payment of a fine and the provisions of this Bill should greatly reduce the level of default on payment of fines. In future, the ability of a person to pay a fine will be the main factor in determining the level of fine.

When this legislation is fully operational and there has been an opportunity to examine its effectiveness, the question of whether further legislation will be necessary can be considered. It is only in the light of the practical application of the Act that it will be possible to determine, for example, whether legislation on the attachment of earnings is desirable, and, if so, the scope of any such legislation.

A fines Bill was published in 2007 and has now been withdrawn. That requires some explanation. The Parliamentary Counsel who drafted the Bill concluded that as the Bill would be used every day in the courts, in other words, more often than any other piece of legislation we pass, it should be as clear and easy to understand as possible. Accordingly, sections 3 to 7 have been redrafted and section 8 provides a totally new approach to maintaining the value of fines imposed on indictment. It was always intended that the Bill would include provisions giving the courts more powers to deal with persons who have defaulted in the payment of their fines, thus greatly reducing if not almost eliminating the imposition of imprisonment. Several such powers are now included in the Bill. To have brought forward those changes on Committee Stage would have resulted in a multiplicity of amendments and a change in the character of the Bill. It is clear that drafting a new Bill was the right approach.

While this is a.relatively short Bill, it will be shown within a short time to be an important piece of legislation. It is complex, in particular the indexing provisions, but that is a worthwhile price to pay for what is being achieved. I go further and say that is a necessary price to pay, because not to index fines could lead to some ridiculous fines having to be imposed. Not to maintain the values of fines imposed years ago only serves to frustrate the efforts of our predecessors in the House who gave so much thought to what they considered to be the appropriate financial penalties for breaches of the offences they were creating. I commend the Bill to the House.

See this speech in context