Examination of Witness (Questions 80 -
MONDAY 24 JUNE 2002
80. Can you use county court judgments to enforce
(Sir Hayden Phillips) No, they are enforced through
the magistrates' court system. I do believe that you face very
similar problems in the county courts as you do in the magistrates'
courts. You are often dealing in some areas with the same population
who are in debt and owe money and have the county court judgments
against them and they will have fines against them. One of the
things we should do is to look to see whether the enforcement
systems for civil debt and criminal debt ought not to be handled
together in the same way.
81. That is my point. My understanding is that
people are terrified of receiving a county court judgment against
them; it absolutely wrecks their lives. They cannot get a bank
loan, they cannot get a credit card, they cannot even get a bank
account, they cannot get a car, they cannot get hire purchase.
It is a disaster and people who suffer from these have their lives
changed. It seems to me that using the county court judgment would
be a very effective method of collecting the fines. It would push
the magistrates' court fines up the list of priorities. I suspect
that these people with other financial commitments are putting
ahead of their fine to society their payments to credit card companies
and banks because the threat of a CCJ is far more serious than
anything the magistrates' court can throw at them. Is that right?
(Sir Hayden Phillips) Yes, the principle is right.
One of the things we are looking at is whether, as a result of
repeated failure to pay, the person could not be registered, which
has a similar effect as a county court judgment, in that it disables
you from obtaining credit. We all recognise that at the moment
it is far too easy for many people to get credit in circumstances
where it ought not to be given. This would be an additional tool
at our disposal, but we do not have it at the moment and it would
82. It sound as though you are doing a lot of
policy work on this issue. What proportion of defaulters have
county court judgments against them already?
(Sir Hayden Phillips) I am afraid I cannot answer
that question either.
83. It worries me when I hear Permanent Secretaries
say that, if they are in charge of developing policy advice to
Ministers and they do not really know some of these key questions
which immediately spring to my mind I as a layman. Is there something
wrong with policy development, policy making in the Civil Service?
It is not the first time I have asked this question to a Permanent
Secretary and I suspect it will not be the last.
(Sir Hayden Phillips) I am not pretending to you that
it is perfect.
84. You do not seem to know the answers to some
of these absolutely key questions which I would have asked on
day one if I were trying to advise on how to increase the proportion
of fines which are not paid. Why do you not know the answer to
(Sir Hayden Phillips) What we have concentrated on
in this area is trying to find out the ways in which we can improve
the system in order to deal with those who are in it now and are
likely to be in it. I mentioned to youand I agree with
youthat we ought to look at the relationship between the
way civil debts are enforced and the way criminal debts are enforced.
I do not have the information at the moment about that. This is
not an area which has been looked at hitherto at all.
85. Could you sent a note about the proportion
of defaulters who have county court judgments against them?
(Sir Hayden Phillips) I will; absolutely.
86. That will be very helpful. Thank you. May
I move on to something to which you alluded in your opening answers
to the Chairman? You said that you thought resources were now
coming to help you, in particular the fact that you are going
to be getting a proportion of the fines collected from 1 April
2002; so you are presumably already receiving a proportion of
fines. Is that correct?
(Sir Hayden Phillips) Yes.
87. Have you heard of the maxim of government
that the body which levies the fine should not benefit from the
proceeds of the fine? Have you ever heard of that maxim of government?
(Sir Hayden Phillips) No. There was a tradition which
the Committee will be well aware of under all governments against
the hypothecation of revenue, which is what that may represent.
88. No, it is something completely different.
(Sir Hayden Phillips) In targeted areas, there have
been changes and this is one of those which the Treasury has enabled.
89. It alarms me that you have not heard of
the maxim that the body which levies the fine should not benefit
from the proceeds of the fine. Given that you do not know about
that maxim, could you work out in your mind why you think there
is such a maxim?
(Sir Hayden Phillips) I understand the point of it.
90. Which is what?
(Sir Hayden Phillips) Which is that you do not put
into the position in which those who benefit from obtaining the
receipts go out and simply do more of what they are doing in order
to maximise receipts.
91. For example, they could impose higher fines
than they would otherwise impose on a person found guilty because
they know that they would benefit from the proceeds of those fines.
Is that not the reason for the maxim?
(Sir Hayden Phillips) That it produces a perverse
(Sir Hayden Phillips) Our judgement is that this will
not happen in this case. It would be most unlikely if magistrates'
were to get it into their heads that they were in a money raising
business in imposing fines on individuals. They take the fact
that they have to deal with an individual case on its merits enormously
seriously and one should make the judgement of trusting the court.
93. How do you know? Why do you think the magistrates
will not take that view, given that if they impose higher fines,
even given the same percentage collection rate, their court will
benefit and they will be able to employ more staff in that court
to pursue further collections. Why is there not an incentive there?
Why is the human nature of magistrates not likely to be susceptible
to that incentive, given that we have actually seen it in terms
of local authorities collecting parking fines, why will it not
happen in magistrates' courts? Why are you so sure, given that
this maxim has evolved over hundreds of years of government? Why
do you think in this particular case it will not apply? Judges
will benefit, the offices of the judges, the magistrates, will
benefit from more revenue into their offices as a result of this
measure? Why do you think after centuries of applying this maxim,
it suddenly will not apply to magistrates today?
(Sir Hayden Phillips) There are two reasons. One is
that it is also true to say over many years that magistrates and
judges have always concentrated on the case before them and not
let extraneous considerations like that enter their heads.
94. Do you think judges in Crown Courts should
also benefit from the proceeds of fines?
(Sir Hayden Phillips) No.
95. Why not?
(Sir Hayden Phillips) The second reason is that this
is not a scheme by which any individual magistrates' court can
actually raise money for itself because the amount of money which
is available from a netting-off scheme goes to the centre and
then is distributed by us in accordance with cases made out by
individual magistrates' courts. If magistrates were to start to
behave, in my view perversely, and increase the amount of fines
in their area, thinking that would result in their getting more
enforcement staff, that would be illogical because the whole thing
is put together nationally and then is distributed on a national
basis to individual magistrates' courts.
96. So this sentence in the NAO Report is wrong
then, that they will be trialing new arrangements in which magistrates'
courts committees will be allowed to use money collected to purchase
additional staff resources. That is wrong, is it?
(Sir Hayden Phillips) It is not incorrect, but it
does not tell you the fact that the way in which it works is that
the money which will become additional flows to the centre and
then distributed by the Department to individual magistrates'
courts. So there is no direct connection between the amount any
individual court raises and what it gets back. There is a connection
between the amount raised nationally and what is then available
to distribute to individual magistrates' courts.
97. I hope that is made clear, because it is
not made clear from the report. Even so, collectively there is
an incentive for magistrates as a whole to raise more money through
fines, so their profession as a whole will have more money from
enforcements. I think it is a very dangerous route to travel down
and I am alarmed that you as the Permanent Secretary of the Lord
Chancellor's Department are not aware of that maxim of government.
May I suggest that you go away and look it up and then perhaps
you might apply it to future policy areas? You are contravening
a terribly important maxim. You said that you want to use other
penalties where fines are not possible, where people just cannot
afford to pay the fine. What proportion of community penalties
are actually served today if you cease applying fines to individuals
who cannot afford to pay the fines? If you apply community penalties,
what proportion of those community penalties are being enforced
and are served today?
(Sir Hayden Phillips) If you want the overall number
of community penalties nationally which are being served, I shall
have to send you that.
98. But of the ones which are passed, what proportion
are actually served? Is it 100%.
(Sir Hayden Phillips) No.
99. Is it 50%?
(Sir Hayden Phillips) I should think it is somewhere
in the order of 50%.
8 Note by witness: As the Parliamentary Secretary,
Lord Chancellor's Department told Mr Gibb in answer to his Parliamentary
Question, this information is not collected centrally. (HC Deb,
12 July 2002, col 1225W-1226W). We will look to see if there is
any way of linking data on civil and criminal defaulters Back