Non-Police Organisations: Cautioning of Offenders
By
Malcolm Gardner
malcolMGArdner associates
1. Introduction
All organisations whether they are Local Authorities, Central Government or Private companies are starting to deal with the escalating problem of fraud. The consequences of which is that fraud investigation officers are becoming better at their jobs and the act of fraud is being considered for what it is; A criminal offence.
If a fraud has been committed and the organisation's counter-fraud officers have investigated to the same standard as the police -- in England and Wales PACE has been applied -- and in the opinion of the organisation that the evidence is "beyond reasonable doubt" then some action should be taken. The question is what action? When the police have been involved in the investigation then the course of action that is open to them is prescribed in law, guidance or duty.
In many cases not action is taken. The reason for this is either the investigation has resulted in a view by the organisation that fraud has been committed but remains unproven. In some cases the investigation has resulted in a view that on the balance of probabilities fraud has been committed, and that recovery of the costs can at least be recovered through some civil action rather than proceeding with any criminal action. Increasing the investigation has proven that beyond reasonable doubt a crime has been committed.
The problem facing organisations is the level of fraud being committed against and the cost effectiveness in detecting, investigating and finally prosecuting the case. Bodies such as authorities vested with powers of enforcement such as Serious Fraud Office, the Office for the Supervision of Solicitors, Inland Revenue, Benefits Agency and local authorities are faced with a duty to take some form of action against those that have committed the offence.
The problem for the Credit Industry, Local Authorities and the Benefit Agency is the sheer number of those who are committing fraud against them. Here there are strong similarities to the retail industry and shoplifting.
The answer really lies in the organisation having a prosecution policy and strategy. It seems obvious, but is a difficult moral hurdle for organisation to get over. If a crime has been committed, do I prosecute? Immediately the process goes straight into "solution overdrive" and the organisation starts asking the "what if" questions and applying mitigation before the fact.
For Local Authorities this is even more of a difficult nut to swallow. What if the person who committed Housing Benefit fraud is a single mum or elderly, our members will not allow us to prosecute. This view is incorrect. A proper policy would resolve many of those issues. The difficulty is that we tend to fall in to an all-or-nothing approach. Either do not prosecute anyone (local authority) or prosecute them all (Inland Revenue)
The police can deal with the problem because there is guidance and legislation on making this kind of decision. The Police Acts, The Criminal Justice Acts, The Crime and Disorder Acts and Home Office Circulars. In many ways non-police bodies new to fraud investigation are re-inventing the wheel.
Top2. Why caution?
The Police, Crown Prosecution Service or in Scotland, the Procurator Fiscal will not always consider that taking a case to be prosecuted is the best option open to them. This applies equally for non-police bodies. The question is simple. Is it in the public interest to prosecute this person? In other words, does it serve the public to put this person on trial? Two obvious points come to the fore in considering the question: successful prosecution and cost. The cost element itself can be looked at on the basis of financial cost, the prosecution itself and the administrative costs of enforcing ant punishment metered out and a sociological cost to the community.
While some civil options are open to non-policing bodies, such as recovery of costs. These should be considered where the balance of probabilities is strong and punitive action is desired by the offended. Where criminal action has been proven beyond reasonable doubt then prosecution for criminal intent should be considered.
If a case can be proven then like the police, the alternatives to prosecution can be considered. Rather than put this person through an expensive trial, and for the cost of the administration of the punishment to fall on the public purse, would the offender show equal remorse and feel chastised if a publicly recorded rebuke was delivered. The civilised world's version of a couple of hours in the stocks.
Some would say, not. However, they miss the point of the caution which when administered by the police can form part of the offender's criminal record.
According to "Social Security Report 64: Benefit Fraud - The Role of Penalties", a public caution is more effective than prison sentences for low level benefit fraud offences. This report concludes that prison is not a deterrent and that a spell in prison does not make someone a better person, it can just make them a better criminal. Although, it must be said that no one would suggest that imprisonment is not a suitable punishment for a persistent professional offender.
Given the number of cases of "soft" fraud for Local Authorities, the Benefits Agency and the Credit Industry then a similar cautioning system should be considered.
Top3. Police CautioningTopThe Police Officers have had t he ability to offer a caution as an alternative for many years. In order to issue a caution the offender has to admit the deed and be prepared to accept the caution. The most recent Home Office circular on this subject is 18/1994. The point of the circular was to ensure that cautioning was to be standardised across police forces on the circumstances in which it is appropriate to administer a caution. The circular does state very clearly in section 4 that "it is impossible to lay down hard and fast rules such that first-time offenders must be cautioned or that certain minor offences should attract only a caution regardless of the offender's record."
The circular says that a caution should only be issued with "the proper use of discretion" and that is "a matter of common sense." The two questions that the circular says should be addressed are:
- "whether the circumstances are such that the caution is likely to be effective, and
- "whether the caution is appropriate to the offence"
While the police have issued cautions for serious offences such as murder and rape, the release of circular 18/1994 says that cautions should not be used for indictable serious-offences. They can be used for indictable offences but only in exceptional circumstances. Where there is profound mitigating circumstances offences under s111a of the Social Security Administration Act (1992) amended might fall in to this category, but if the offence is indictable then cautioning should not be used regardless of the age or the previous record of the offender.
The circular also advises against the use of multiple cautions and this should only be considered:
- "where the subsequent offence is trivial; or
- "where there has been a sufficient lapse of time since the first caution to suggest that it had some effect"
Police cautions are recorded accurately to ensure that multiple cautions do not happen and that the cautions are consistent. The way in which the police do this is on their national computer system. This computer system is checked for previous cautions. The courts can also consider recorded cautions when deliberating on sentence.
The oral cautions that had been established in circular 59/1990 can still be given but they are not recorded for the purposes of being cited in court. The term "Informal Caution" is not used any more.
When giving a caution police officers should not become involved in negotiation "reparation or compensation" although this advice has been superseded somewhat by the introduction of restorative cautions.
In the revised national standard on cautioning Richard Stoate says, "a caution is not a form of sentence. It may not be made conditional upon the satisfactory completion of a specific task such as reparation or the payment of compensation to the victim. Only the courts can impose such requirements."
Before a caution is given the following conditions should be met:
- "there must be evidence of the offender's guilt sufficient to give a realistic prospect of conviction
- the offender must admit the offence
- the offender (or in the case of a juvenile, his parents or guardian) must understand the significance of a caution and give informed consent to being cautioned"
The police will also take into consideration the public interest principals laid out in the Code for Crown prosecutors. Some non-police officers assume that the membership of certain groups, such as the elderly exclude them from prosecution and therefore cautioning. This is not true and while it may be a consideration it does not offer absolute protection.
Attitude of the offender will also be considered. A practical demonstration of regret, such as apologising to the victim or offering to repay any money may justify the use of a caution. The view of the victim should also be considered.
The formal caution is administered by a uniformed police officer with the rank of inspector or above and normally at a police station. If the person is elderly or infirm then a caution can be issued in their home and in the presence of a friend or relative.
4. Non-police cautioning
It should be understood that only a police officer can issue a police caution. A similar caution issued by a non-policing body could not be recorded on the central police computer system unless there is agreement by the Home Secretary.
Top4.1 Public Organisations
Public organisations such as the Benefits Agency do issue cautions that are centrally recorded and the principal and procedure is similar to that of the police, other than the caution is not issued by an uniformed officer. It must be said that despite circulars announcing the scheme BIFIS fraud mangers seem to be unaware of the scheme.
Local Councils also issue formal cautions. Trading Standards and Environmental Health officers issue formal cautions or warning. Housing Benefit fraud investigators tend not to issue cautions. One of the reasons the claim that a "local authority caution" does not exist and that there is no corresponding legislation which gives a council the power to formally caution.
This of course is true. However, Housing Benefit Fraud investigation has changed considerably over the last few years and the link between weekly benefits saving, fraudulent overpayment and an offence under the Social Security Administration Act (1992) amended requires Local Authorities to be more professional about their approach to prosecutions.
Should a council decide to use a caution as opposed to prosecuting if a case of Housing Benefit fraud has proven to a breach of the Social Security Act? This would depend on who has undertaken the investigation.
Clearly if the prosecution is being taken by the police through the Crown Prosecution Service then a police caution would be considered. The Police would make the decision but would take into consideration the view of the council in its role of victim
. If a Police caution is issued then the file is not passed to the CPS or Fiscal. Sometimes the file would go to the CPS or the Fiscal to obtain their advice.If the council is undertaking the investigation and the subsequent prosecution then while, there is no power that says that it can offer a formal caution as an alternative, there is equally no legislation or circular that says it can not. In fact, given that the authority has a duty to protect the public purse then it is perfectly reasonable that a formal caution where appropriate should be issued. Firstly because it will save on a costly trial, and secondly because the caution may stop the person from re-offending. The introduction of the Housing Benefit verification framework means that those who have offended before should be allocated to a higher risk group.
All organisations would benefit from having a proper Prosecution Policy in place. However, I suspect that few organisations have such a policy or strategy and certainly not up to the standard required to support the decision to determine how to proceed from investigation to action. You need not just the general policy guidance but a clearly set out framework, which should include comprehensive procedures and guidance, to support post investigation decisions. In addition, there will need to be a set of active partnerships set up to progress the caution process the main one - as far as I can see being with the police.
If investigation and prosecution is done solely by the LA and a formal cautioning system is introduced then the caution should be recorded on their Verification System.
All cautions should be recorded locally in order to have local management figures. Radius
VICS can facilitate this by holding all relevant data against each claim electronically. This data can be used for management reporting purposes. The risk category of the claimant can be archived and this will be reflected in the frequency of In-claim visits and postal checks generated by the system.The rules for issuing a formal LA caution should be exactly the same as the police, insofar as the process and the acceptance of guilt and remorse. The only differences being:
Top 4.2 Private Organisations
- the caution should be issued where possible at the council, in a formal office (perhaps the mayor's chambers)
- the issuing officer should be a principal officer or above
- the issuing officer should be dressed formally for the occasion
- that the caution should be read and a letter explaining the seriousness of the caution and the effects on future benefit should be given to the offended
- the offender should be told that details of the offence could be used in any later court case where benefit fraud was involved
- That a caution should not be issued as well as an "overpayment penalty"
Like local authorities there is no reason why sector groups should not hold details of offences centrally. For instance those building societies that use National Hunter could record such information. The important fact is the same as for public organisations. You should ensure that you follow the guidelines in the Home Office circular 18/1994 and 50/1990. While it is designed for police forces the principal of good practice and fairness apply.
Where the police have investigated the case and are prosecuting then do not forget that your view as victim should be considered in deciding whether a caution is a reasonable alternative.
If you use private investigators or forensic auditors then you should have a prosecution policy in place. The advice given to public services above could also be used by private companies. The only differences would be to use a board room or chairman's office rather than a mayor chamber. The rank of the cautioning officer should also be considered.
Top 5. Conclusion
The principal of formal cautioning is a sound one. It needs to be formally recorded. In order to make the information available to others then the offender needs to be informed that would be the case before they accept the caution. Do not issue a formal caution as a bribe -- if you confess we will go easy on you -- or if you do not have a case that is evidenced. If the police are undertaking the prosecution then only they can issue a police caution. Follow the Home Office guidelines as they ensure fairness to the victims and the accused.
While formal cautioning will have its own bureaucracy and paperwork it is cheaper and in the case of high level soft fraud (insurance, credit, benefits) and more suitable punishment.
Malcolm Gardner malcolMGAssociates for Radius Computer Services
© 1999 Radius