COMPENSATION ORDERS IN CRIMINAL CASES

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1 Notes and Comments 359 COMPENSATION ORDERS IN CRIMINAL CASES The rationale for compensation orders Section 401 of the Criminal Procedure Code allows the court to order a convicted person to pay compensation to any person injured in respect of his person, character or property by the crime or offence for which the sentence is passed. This section has existed in our Criminal Procedure Code from at least 1936, if not earlier 1. It is based on an Indian model 2. The section gives a court a wide power to order compensation to be paid to the victim of a crime. In England, a similar power to award compensation exists under s35(1) of the Powers of the Criminal Courts Act The aim of the English provision was explained by Scarman LJ in R v. Inwood 3 : Compensation orders were not introduced into our law to enable the convicted to buy themselves out of the penalties for crime. Compensation orders were introduced into our law as a convenient and rapid means of avoiding the expense of resort to civil litigation where the criminal clearly has means which would enable the compensation to be paid. One has to bear in mind that there is always the possibility of a victim taking civil proceedings, if he be so advised. Compensation orders should certainly not be used when there is a real doubt as to whether the convicted man can find the compensation. The same can be said of our section 401. Cases in which compensation orders have been made The section applies whenever anyone has suffered injury in respect of his person, character or property. The section therefore clearly gives the sentencing judge the widest discretion in all types of cases. In Singapore and Malaysia compensation orders have been made in the following reported cases: Tai Khun v. PP of Pahang 4 voluntarily causing hurt under s323 Penal Code. R v. Pallak Nath Singh 5 forgery under s465 Penal Code. Abdullah b Tambon v. PP 6 cheating. 1 See s452 CPC (Cap 21,1936 Rev Ed); s445 CPC (Ordinance No 13 of 1956); and s387 CPC (Cap 113, 1970 Rev Ed). 2 Section 545 CPC (Act V of 1898), now s357 CPC (1974) 60 Cr App R 70, (1905) 9 SSLR Appendix 62 (High Court, Federated Malay States). 5 [1933] SSLR 50 (High Court, Straits Settlements). 6 (1927) 7 FMSLR 31 (High Court, Federated Malay States).

2 360 Singapore Academy of Law Journal (1992) PP v. Li Chuan Pin 7 fraudulently obtaining credit. Muniandey v. PP 8 voluntarily causing hurt. In the UK, compensation orders have been made in the following cases (though on the basis of a differently-worded section): R v. Daly 9 damage to property. R v. Grundy, R v. Moorhouse 10 burglary. R v. Thomson Holidays Ltd 11 misleading trade descriptions. R v. Schofield 12 theft and cheating. Bond v. Chief Constable of Kent 13 criminal damage to property. Given the wide wording of the section, it appears that compensation orders may be made in practically every type of case, so long as the victim is identifiable and has suffered injury. Principles underlying the award of compensation (1) A compensation order is not an alternative to a sentence: R v. Miller 14. (2) The machinery of the compensation order is a quick and simple way for dealing with the claim in simple cases: per Lord Widgery CJ in R v. Daly 15. They are a convenient and rapid means of avoiding the expense of resort to civil litigation where the criminal clearly has means which would enable the compensation to be paid: per Scarman LJ in R v. Inwood 16. (3) A compensation order should not be used as a further punishment for a convicted person, and the amount of compensation should not exceed the amount of damage caused: King-Emperor v. Maung Thin 17. Thus, where the victim has recovered his goods undamaged, a compensation order should not be made: R v. Boardman [1965] 1 MLJ 133 (High Court, Singapore). [1955] MLJ 231 (High Court, Federation of Malaya). [1974] 1 All ER 290. [1974] 1 All ER 292. [1974] 1 All ER [1978] 2 All ER 705. [1983] 1 All ER 456. [1974] 1 All ER 290, 291. (1974) 60 Cr App R 70, 73. (1909) 10 Cr LJ 78. This Burmese judgment considered the Indian equivalent of our s401. (1987) 9 Cr App R (S) 74.

3 Notes and Comments 361 (4) Compensation will be ordered only in clear cases, where the damage is either proved or agreed: R v. Vivian 19. The assessment of damage has to be based on evidence, and not merely on representations by the prosecution: R v. Horsham Justices, ex parte Richards 20. Thus, in R v. Vivian the court quashed a compensation order when there was no agreement as the amount of damage caused to a car that the defendant had unlawfully taken. (5) However, this does not preclude the court from granting compensation to the victim in respect of anxiety and distress arising out of the offence: Bond v. Chief Constable of Kent 21 ; or to compensate for a criminal misrepresentation: R v. Thomson Holidays Ltd 22. (6) Where an offence involves financial loss to the victim, the compensation order may include a sum in respect of interest: R v. Schofield 23. However, in Hammertons Cars Ltd v. London Borough of Redbridge 24 the court doubted whether the costs of a civil action which the victim settled could be the subject of a compensation order. (7) It must be remembered by courts making compensation orders that the civil remedy for the damage still exists. The machinery of the compensation order is a quick and simple way for dealing with the claim in simple cases, and in particular it should not be used where recompense involves a weekly payment over a long period: per Lord Widgery CJ in R v. Daly 25. Nor should an order be made where it is clear that the accused does not have the means to comply with it: R v. Inwood 26. (8) The order must not be oppressive. The court must bear in mind that an accused is often short of money and he must not be tempted to commit further offences to provide the cash to satisfy the order: R v. Miller 27 ; R v. Inwood 28. (9) There might, however, be good moral grounds for making an order, including payment by instalments, to remind the defendant of the evil he had done. This might apply particularly where a non-custodial sentence was imposed: R v. Miller [1979] 1 All ER 48. [1985] 2 All ER [1983] 1 All ER 456. [1974] 1 All ER 823. [1978] 2 All ER 705. [1974] 2 All ER 216. [1974] 1 All ER 290, 291. (1974) 60 Cr App R 70. (1974) 60 Cr App R 70.

4 362 Singapore Academy of Law Journal (1992) Procedural problems There is no indication in the local cases as to the procedure adopted. It appears that the court made the order of its own motion. Under the UK legislation a court may order compensation on application or otherwise, though it is unclear how the application is to be made or by whom. In England, the prosecution may ask for the order: see eg Bond v. Chief Constable of Kent 30. It may be that an application may also be made on behalf of the victim: R v. Kneeshaw 31. Section 5 of the CPC allows the court to apply the law relating to criminal procedure for the time being in force in England, insofar as that law can be made auxiliary to the Code, where there is a lacuna. Perhaps this would allow an application on behalf of the victim to be entertained by the court? Whether or not the victim makes the application, it is clear that the court may of its own motion order compensation. It is suggested that the sentencing court should consider making a compensation order in all cases involving financial loss to the victim, especially where the loss is quantified. In other cases where assessment of damages is necessary, compensation orders may be granted if there is an application from either the prosecution or the victim and the court is satisfied on the evidence as to the quantum of the loss. Advantages The primary advantage of the compensation order procedure is that it does away with the need to have civil proceedings. The necessity to prove the case once more in a civil court is a great deterrent to victims of crime. Firstly, they may not have the means to retain a lawyer to obtain civil redress. Secondly, the time it takes to get a civil case decided will be a discouraging factor. Thirdly, there is always the question of litigation risk, since the civil court is not bound by the criminal court s findings. Fourthly, the cost of the proceedings might far exceed the amount of compensation that the victim could recover in civil proceedings. If compensation orders were to be made on a more regular basis, the needless duplication between civil and criminal proceedings could be avoided. This would result in quicker justice and better justice, for victims who might not otherwise obtain redress would get something. The joy of seeing the perpetrator in court is seldom sufficient to mollify the victim of a crime. 30 [1983] 1 All ER [1974] 1 All ER 896, 899.

5 Notes and Comments 363 Moreover, the compensation order procedure allows the court to deprive the criminal of the fruits of his crime, especially in cases where he has profited from it and the fine that the court can impose is limited. This makes it especially attractive to combat white-collar crime. The prospect of having to compensate the victim may prove a deterrent, especially where the crime is pre-meditated. The criminal will be assured that he will not be able to live off the fruits of his crime after his release from prison. Compensation orders also have the advantage that they can be enforced if necessary by the imposition of a default sentence of imprisonment 32. The threat of jail may induce the convicted person to pay up, whereas in civil proceedings the final recourse where the defendant fails to pay is to bankrupt him; a course which a small claimant may be reluctant to take because of the cost and time involved and because of the uncertainty of recovering anything. This is not to say that there are no problems with compensation orders. For one thing, the lack of a formal mechanism to allow the victim to apply is a grave defect. Another set of problems arises when there is a need to assess damages. Certainly, the section could benefit from some revision to address these problems. However, where the quantum of the loss is established, there seems little reason why the sentencing court should refuse to order compensation to be paid to the victim. The idea of criminals having to pay compensation to victims of their crimes is attractive; it fulfils a basic desire for justice. And providing justice is what the law is there for. WALTER WOON* 32 See section 403 CPC. * LL.M (Cambridge), LL.B (NUS), vice Dean, Faculty of Law, National University of Singapore, Advocate & Solicitor of the Supreme Court.