Consistency needed in how we treat financial crimes

Nearly 17 years ago, the Law Commission raised the idea of an independent sentencing council to develop sentencing guidelines in New Zealand

Lisa Marriott

As it stands in Aotearoa New Zealand, beneficiary fraud is largely dealt with under the Crimes Act, while tax evasion is prosecuted under the Tax Administration Act. This, among other factors, means beneficiaries engaging in financial fraud face significantly stiffer penalties than professionals doing the same.

This inconsistency in how fraud is handled in New Zealand underscores the strong case for ensuring financial crimes are treated the same. Sentencing guidelines are a good place to start.

To be fair, sentencing is more of an art than a science. The art is balancing consistency with fairness, alongside all the aims of sentencing: deterrence, denouncing the behaviour, holding offenders accountable, providing for the interests of the victim and, in some cases, protecting the community, assisting in rehabilitation and providing reparation.

It probably goes without saying that the combination of these objectives creates a system that is multi-faceted and complex. What may be less clear is that the complexity generates the potential for inconsistencies in sentencing decisions. Sentencing guidelines could help.

Typically these provide a sentencing range with some, usually limited, opportunity for judges to depart from this range. Guidelines prescribe sentences based on the seriousness of the current offence, while considering any prior offending.

This approach is not unheard of in New Zealand. Guideline judgments exist for a range of serious offences, including aggravated robbery, sexual violation, grievous bodily harm and various categories of manslaughter. These guidelines primarily deal with offending that is likely to result in a sentence of imprisonment.

But this limited approach is problematic because inconsistency is more likely to occur at lower levels of offending. This is also where there is less transparency of sentencing outcomes as there is generally less media, and therefore public, attention on these cases.

There have been efforts to establish sentencing guidelines across the spectrum of offences. Nearly 17 years ago, the Law Commission raised the idea of an independent sentencing council to develop sentencing guidelines in New Zealand.

The council came close to a reality. A bill establishing the council passed in 2007 and subsequently received royal assent the same year. But the legislation was never introduced after the change of government in 2008. It was repealed in 2017.

Minimising inconsistency

Research has identified inconsistencies in sentencing practice in New Zealand for many years. Findings include that the type of offender, the location of the court and/or the individual judge may influence the sentence handed down. Sentencing guidelines can minimise these inconsistencies. They also offer a range of other benefits including:

■ increased transparency;

■ efficiency gains, as sentencing guidelines generate a singlesource reference for a judge;

■ improved public trust and engagement in the sentencing process; and

■ removal of the politicisation of sentencing, whereby judges may feel pressure – or may wish to – move in response to the prevailing political or public mood.

We have seen this in action. In 2008, Justice Graham Panckhurst wrote, “sentence levels, and therefore the prison population, have increased in response to popular demand”.

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