A Court of Appeal decision in New Zealand set a precedent last month, allowing offenders to argue their drug addiction should be considered a mitigating factor.
Methamphetamine dealers who can prove their personal addiction played a role in their offending are now eligible for a shorter sentence, reduced by up to 30%.
This change is part of an overhaul of guidelines used by judges since 2005. Another update is that lawyers and judges are encouraged to adjourn sentencing to give offenders time for rehabilitation.
The judgement follows a new law that gives police discretion to use a “health-centred approach” in some cases where individuals are found in possession of illegal drugs for personal use.
Here I argue we should extend this approach to other crimes where poverty, deprivation or addiction play a key role in the offending. My research into financial crime shows white-collar offenders are privileged in the New Zealand justice system.
Privilege for offenders who are already advantaged
In my recently published research, I have analysed the sentencing decisions in 30 high-profile white-collar financial fraud cases. I have also reviewed a similar number of blue-collar financial crime cases, such as welfare fraud.
I used judges’ sentencing notes from five years of Serious Fraud Office (SFO) prosecutions in New Zealand. This included significant mortgage fraud (the highest value was NZ$54 million) and ponzi schemes (highest value NZ$17.5 million). The average value of the prosecuted cases was NZ$3.5 million.
I analysed the extent to which factors such as good character, reputation damage, the ability to pay reparation and to provide strong references affected sentencing outcomes favourably for white-collar offenders.
These mitigating factors are frequently the benefits of privilege. It is unusual for factors such as good character or loss of community standing to be considered in determining the sentences in blue-collar financial crimes.
The sentencing process and outcome is an important part of the justice system. Not only does it determine the short- and long-term future of the offender, it also communicates society’s perspectives on crime and criminals. Therefore, increased debate is welcome.
The purposes of sentencing in New Zealand are set out in the Sentencing Act 2002. In summary, they are to hold the offender accountable, create deterrence, denounce criminal conduct, rehabilitate, provide for the interests of the victim, provide reparation and protect the community.
In sentencing, the court must consider the offender’s personal, family, community and cultural background. Relevant aggravating and mitigating factors must also be taken into account.
Aggravating factors include the particular circumstances of the offending and the culpability of the offender, the impact on the victim, whether there was a vulnerable victim, whether there was an abuse of trust or authority, any prior convictions of the offender and any loss, damage or harm from the offending.
Relevant mitigating factors include the age of the offender, whether and when the offender pleaded guilty, whether the offender had limited involvement in the offence, any remorse shown by the offender and evidence of the offender’s previous good character.
As the table below shows, in my study the good character of the offender was referred to in all 30 Serious Fraud Office cases.
It is relevant to note it’s often the good character of these offenders that facilitates the crime because they were in a position of trust.
The quality of references and testimonials was referred to in 50% of the fraud cases. Access to superior networks of people who can vouch for one’s prior good character and good works, despite the presence of crime, may result in a shorter sentence.
Reference to other hurt such as shame or loss of community standing was referred to in 27% of cases. The academic literature suggests white-collar offenders are in a better position to recover and maintain stable employment after committing a crime, unlike those who commit blue-collar crimes.
Restitution is another mitigating factor that can result in a sentence discount. In the cases I examined, reparation was evident in eight cases, with two offenders offering full reparation and the others offering partial reparation. Where reparation was provided, it resulted in a sentence discount.
This leads to the suggestion offenders can “buy justice”. Those who have resources to provide financial recompense may benefit from a sentence discount, when their equivalent poorer counterparts may not.
The majority of the cases outlined in the table received a discount for at least some of the mitigating factors. This is despite the presence of a range of aggravating factors (also shown in the table) such as vulnerable victims, significant harm, systematic offending over long periods of time and abuses of trust.
I propose three changes to sentencing decisions:
1. the “good character” of white-collar offenders should not be considered as a mitigating factor when the good character has been an enabler of the offending because people trusted them
2. restitution should not be treated as a mitigating factor of the offending, but rather the absence of restitution should be considered as an aggravating factor
3. other harms, such as loss of reputation or feelings of shame are a natural corollary of the offending and do not justify sentence discounts.
Authors: Lisa Marriott, Professor of Taxation, Victoria University of Wellington