Justice for all

White-collar criminals get lighter sentences than blue-collar ones. Robert Verkaik reports on moves to correct the imbalance

Justice is supposed to be blind. Yet a fraudster in pinstripes with an important job in the City might expect a more lenient sentence than a single mother who cheats the benefit system.

The Government finally faced up to this uncomfortable fact last week when the Attorney General, Lord Goldsmith QC, said too many businessmen and members of the professional classes were getting off with light sentences.

Lord Goldsmith told an audience of lawyers and law enforcement agents at a conference on economic crime: "It is notable how often [white-collar] defendants receive non-custodial and suspended sentences despite committing serious economic crime."

He said the time had come for a more "even-handed" approach to fraud because "social equality requires that we bear down on white-collar crime as effectively as on blue-collar crime, such as fraud in obtaining social security."

There was, said Lord Goldsmith, a real "social dimension" to white-collar crime.

Official data shows crime committed by people from deprived areas is being tackled with great vigour. Between 1997 and 2002 prosecutions for benefit fraud rose from under 12,000 to nearly 27,000.

Now, argues the Attorney General, "we need to match this approach in white-collar crime. Justice must be even-handed".

Lord Goldsmith had already referred the sentence of Stephen Hinchliffe, the former chairman of the Facia retail group, to the Court of Appeal for a second opinion.

Hinchliffe, 53, pleaded guilty to conspiracy to defraud and admitted making £1.75m from the fraud.

The Lord Justices accepted that Hinchcliffe's crime merited immediate custody and that his original 15-month suspended sentence had been too lenient. They replaced his suspended sentence with one of 18 months in custody.

Hinchcliffe's initial lenient treatment contrasts with that of Kanta Singh, 41, a Birmingham mother of five. She was sentenced to 12 months' imprisonment, suspended for 12 months, for dishonestly claiming £14,000 in housing benefit after her husband left her.

Sentencing her at Birmingham Crown Court in 2000, Mr Recorder Anthony Smith said taking that much money would normally result in a prison term, but he accepted Singh had had a hard life and was left to bring up her children alone.

The Attorney General told the conference: "To put it bluntly the risk of detection, investigation, prosecution and conviction of an offence of fraud is small and if you are unlucky enough to be caught the sentence is probably tolerable for the gains you have made; whereas trafficking in drugs or people or arms may result in increased risk of detection and certainly more severe penalties."

This renewed assault on white- collar crime received a mixed response from the professions and from the business community.

Richard Wilson, a policy adviser at the Institute of Directors (IOD), says in the "public mind and the view of our membership violent crime is more shocking". Nevertheless, he concedes that Lord Goldsmith's initiative is "entirely reasonable" as many members of the IOD are also fraud victims.

Rod Armitage, head of company affairs at the Confederation of British Industry, says: "Companies strongly support any measures to reduce fraud and current corporate governance codes already require firms to report risks and weaknesses in their internal control systems. But business would applaud more effective procedures and greater resources available to bring criminals to justice."

Matthias Kelly QC, chairman of the Bar, broadly welcomes the initiative and says the Attorney General should be applauded for his willingness to face up to the lenient sentencing of white-collar crime.

Janet Paraskeva, chief executive of the Law Society, adds: "We believe that this sort of crime can have equally damaging consequences for victims as other sorts of crime. This is why the Society opposes the Government's plan to remove jury trial for complex fraud cases."

But Lawrence Davies, chairman of the Employment Law Practitioners Association, wants the Attorney General to go further and let the courts impose "punitive fines" on white-collar criminals.

There are other examples of class code justice in the legal system. There are real concerns about "advice deserts", parts of the country where people who qualify for free legal advice can't find a solicitor to do the work.

Ms Paraskeva says: "Everyone, no matter what their income, should have access to legal advice."

She asks: "If someone is charged with committing a criminal offence, or needs guidance in a civil matter, a solicitor should be there to help - what could be more socially inclusive than that?"

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