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Welcome clarity on early guilty pleas

Welcome clarity on early guilty pleas


Christopher Gribbin discusses new sentencing guidelines, the recent DPA agreed with Tesco, and the introduction of unexplained wealth orders

On 7 March 2017, the Sentencing Council published definitive sentencing guidelines on the appropriate reduction in sentence for a guilty plea. The new guidelines, which will apply in both the magistrates’ and crown courts, come in to force for all cases in which the first hearing is held on or after 1 June 2017.

Under the new guidelines, the maximum level of reduction in sentence for a guilty plea is set at one-third of the sentence that would otherwise apply and is reserved for when a guilty plea is indicated at the first stage of proceedings. The guidelines provide that the first stage of the proceedings will ‘normally’ be the first hearing at which a plea or indication of a plea is sought and recorded by the court.

For those defendants who enter a guilty plea after the first stage of the proceedings, the guidelines set out a sliding scale of reduction in sentence, ranging from one-quarter to one-tenth, having regard to when the guilty plea was indicated to the court relative to the progress of the case and the trial date. The guidelines are explicit that the reduction should be reduced still further, below one-tenth, and possibly to zero, if the guilty plea is entered during trial.

Notwithstanding a ‘late’ guilty plea, however, the guidelines leave open the possibility that a one-third reduction should still be made where the court is satisfied that particular circumstances reduced the defendant’s ability to understand what was alleged, or otherwise made it unreasonable to expect the defendant to indicate a guilty plea earlier in the proceedings. A sentencing court will be required to assess whether a plea was delayed in order for the defendant to receive advice on whether he was in fact and law guilty of the offence, which would fall within the exception, or to assess the strength of the prosecution case and prospects of conviction, which would not.

The stated purpose behind the guidelines is to encourage those who are going to plead guilty to do so as early as possible. In addition, the guidelines note that an acceptance of guilt:

  • Normally reduces the impact of crime upon victims;

  • Saves victims and witnesses from having to testify; and

  • Is in the public interest in that it saves public time and money on investigations and trials.

The new guidelines replace the current Sentencing Council guidelines which presently reserve the maximum reduction in sentence for a guilty plea for those pleas entered at the ‘first reasonable opportunity’ – an ambiguous term which has produced a small body of case law. The guidelines also provide clarification that the strength of evidence against a defendant should not be taken into account when determining any reduction.

In addition, the guidelines bring welcome clarity to the relationship between personal mitigation and an early guilty plea. Under the new guidelines, factors such as admissions at interview by a defendant, cooperation with the investigation, and expressions of remorse are all to be considered as matters of mitigation to be weighed by the court separately and after application of the discount for an early guilty plea.

Deferred prosecution agreements

At the start of April 2017, the Serious Fraud Office announced that it had agreed a deferred prosecution agreement (DPA) with Tesco Stores Limited. The DPA, which did not address whether liability of any sort attaches to Tesco or any employee or agent of Tesco or Tesco Stores Limited, imposed a financial penalty against Tesco Stores of £129m, plus the SFO’s costs. That announcement followed the approval in January by Lord Justice Leveson of a DPA between the SFO and Rolls-Royce, an agreement which imposed a record financial penalty and disgorgement of profits in the sum of £497.25m, plus interest and costs.

These latest developments have been viewed by many as the coming of age of a mechanism intended by the Crime and Courts Act 2013 to permit organisations to avoid conviction by entering into a negotiated agreement with a prosecutor. Although a discretionary tool and not necessarily intended to entirely replace the prosecution of corporate entities, there had been widespread anticipation that their introduction would develop a culture comparable to that of corporate criminal justice in the United States where such agreements are commonplace.

The process of agreeing a DPA is governed by legislation and a code of practice published by the SFO and the Crown Prosecution Service, which sets out relevant factors for prosecutors to consider in determining whether a DPA is appropriate. Prior to the DPA with Rolls-Royce, it had been widely considered that the most important factor for a prosecutor to take into account would be whether or not an organisation had ‘self-reported’ the criminal conduct to the authorities – that is, the organisation, upon becoming aware of the conduct, had taken steps to bring the conduct to the attention of the relevant authority.

However, contrary to such received wisdom, the DPA between Rolls-Royce and the SFO was agreed despite the fact that Rolls-Royce did not ‘self-report’. This development has attracted significant attention, especially given the apparent conduct in question: Leveson LJ noted in his judgment approving the DPA that ‘my reaction when first considering these papers was that if Rolls-Royce were not to be prosecuted in the context of such egregious criminality over decades, involving countries around the world, making truly vast corrupt payments, and, consequentially, even greater profits, then it was difficult to see when any company would be prosecuted’.

Nevertheless, in his judgment, Leveson LJfound that the cooperation of Rolls-Royce was ‘extraordinary’ and he was satisfied that ‘the company could not have done more to expose its own misconduct, limited neither by time, jurisdiction, or area of business’. It is notable that the judgment states that Rolls-Royce incurred costs in the course of the matter in excess of £125m.

Pending the trial of three individuals later this year at Southwark Crown Court, the DPA and judgment in the Tesco case is yet to be published. However, that judgment and other forthcoming DPAs will be relevant in determining whether the Rolls-Royce case has diluted the ‘considerable weight’ given in the code of practice to self-reporting wrongdoing to qualify for a DPA.

Unexplained wealth orders

At the end of April, the Criminal Finances Act 2017 entered the statute books, introducing a number of new criminal offences and investigatory powers. Among these powers, the Act introduces a mechanism whereby law enforcement agencies may apply to the High Court for an ‘unexplained wealth order’, or UWO, against persons who hold property which appears to have been unlawfully obtained.

The Act creates a free-standing power for law enforcement agencies to make an application for a UWO to the High Court on the basis that:

  • There are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property;

  • The respondent holds the property and the value of the property is greater than £50,000; and

  • The respondent is either (i) a politically exposed person; or (ii) there are reasonable grounds for suspecting that the respondent is, or has been, involved in serious crime, or a person connected with the respondent has been involved in serious crime.

Should the High Court make a UWO, a respondent will then be required to provide a statement, within a timeframe imposed by the court, setting out certain information, including the nature and extent of the respondent’s interest in the relevant property, and an explanation for how they obtained the property (including how any costs incurred were met).

However, in the event that a respondent then fails, without reasonable excuse, to comply with the requirements of the UWO, then the property in question is presumed to be recoverable property (that is, obtained through unlawful conduct) for the purposes of Part V proceedings under the Proceeds of Crime Act 2002, which may then be initiated by the law enforcement agency.

Further, in the event that a respondent complies or purports to comply with the UWO, then any information included in the response may be used by the enforcement agency in other (non-criminal) proceedings, including proceedings under Part V. Therefore, while a dramatic new measure, imposing a reverse burden of proof on the respondent, a UWO in and of itself will not permit the civil recovery of the proceeds of crime without further proceedings under Part V.

Finally, the Act provides that, if the High Court makes a UWO, it may also make an interim freezing order on the application of a law enforcement agency in respect of the property if it considers it necessary to do so to avoid the risk that any subsequent recovery order may be frustrated.


Christopher Gribbin is an associate at Peters & Peters