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18 Jun 2013

The benefits of early plea discussions

Last month marked the fourth anniversary of the Attorney-General’s Guidelines on Plea Discussions in Cases of Serious or Complex Fraud (“the Guidelines”)[1].  They set out the process by which a prosecutor in cases of serious or complex fraud can discuss and agree a basis of plea and joint sentencing submissions with a defendant.  When they were promulgated, Baroness Scotland, the then AG said that the Guidelines were designed to help prosecutors resolve fraud cases more effectively to the benefit of the public.

Such laudable aims were not however achieved in initial attempts to apply the Guidelines.  In R v Innospec Ltd[2] and R v Dougall[3], which were the first cases where a resolution was sought pursuant to them, prosecutorial conduct was criticised by the judiciary. This criticism highlighted the failure of the Guidelines to create a framework which enabled a prosecutor to conduct meaningful plea discussions while not fettering judicial discretion on the imposition of sentence.  These cases emphasised that even if a court accepts a plea agreement, it is not bound to follow the basis of plea when passing sentence.  Joint sentencing submissions produced at the conclusion of plea discussions can only go so far as to detail the appropriate sentencing authorities to the judge who will then form his own views as to sentence.  The Guidelines themselves therefore provide little incentive for a defendant to enter into plea discussions.

Despite their failures the Guidelines have, with the support of the judiciary and prosecuting authorities, engendered a plea discussion system which has given rise to significant potential advantages for a defendant.  A notable demonstration of this can be found in the  recent case of Paul Milsom who was sentenced at Southwark Crown Court on 7 March 2013.

Paul Milsom, a former equities trader, entered into plea discussions with the FSA (now the FCA) within weeks of his arrest and interview.  He admitted one count of insider dealing encompassing 28 separate trades over a period of 18 months and asked that a further 15 instances of insider trading, with which he was not charged, be taken into consideration by the judge when sentencing.  The total profit derived from the overall trading was in the region of £560,000, of which Milsom personally benefitted from £245,657.

When sentencing Milsom to 2 years imprisonment His Honour Judge Pegden indicated that he had given full credit (i.e. a discount of one third of the overall sentence) for his early guilty plea.  In normal circumstances this would represent the maximum discount a defendant can receive upon entering a guilty plea to charges in criminal proceedings.  However, HHJ Pegden also indicated he had given extra credit (i.e. a discount over and above one third) to reflect the fact that Milsom had entered into a plea discussion with the FSA.  The Guidelines do not make any provision for a defendant to receive a discount on his sentence over and above that which is available for simply entering a guilty plea.  Notably, and presumably to avoid setting a precedent which inhibits the future exercise of judicial discretion, HHJ Pegden refrained from publicly stating the amount of additional credit actually given.   The sentencing remarks are the clearest articulation to date that an individual can reasonably expect to receive in excess of one third discount on sentence in circumstances where he enters into early plea discussions with a prosecutor.  However, an unfortunate consequence of the plea discussion framework’s informal development through the actions of prosecutors and the judiciary is that it remains impossible for a defendant to quantify the level of discount he will receive.

Milsom’s case is also notable to those facing prosecution for financial crime because the judge agreed to make a confiscation order at the sentencing hearing in the value of Milsom’s personal benefit from his offending.  The value of Milsom’s benefit and his assets had been agreed between the prosecution and defence within the basis of plea and joint sentencing submission.  Negotiating confiscation in parallel with discussions on the basis of a plea may strengthen the defendant’s negotiating position in respect of both limbs thereby securing a preferable basis for the calculation of both sentence and confiscation. The Guidelines are silent on confiscation and do not provide any framework for the discussion and agreement of confiscation figures as part of the plea discussions.  Any agreement reached between the prosecutor and the defence will not bind the court.  However, this case shows that prosecutors are now willing to negotiate the terms of confiscation as part of a plea negotiation and the courts can be willing to accept the joint submissions of the prosecution and defence in this regard.  This indicates an important development capable of providing a defendant with greater certainty and control over his financial liabilities.

The procedural advantages should not be taken at face value.  A very real hazard for a defendant is that, by entering into plea discussions, the prosecution case will not be subjected to the same level of scrutiny by the judiciary or by a jury as might be the case if the prosecution was required to present its case at trial.  In such circumstances a prosecutor might be inclined to take a more bullish approach to selecting charges or in framing assertions as to the severity of offending which might not have withstood scrutiny at a trial.  The potential benefits to be secured by entering into plea discussions must therefore be constantly reviewed by reference to the conduct of the prosecutor during the course of those discussions.

There are a number of risks for a defendant who chooses to enter into plea discussions and there clearly remains a need for the executive to take steps to create a robust plea negotiation framework which provides certainty to a defendant about the incentives to entering an early guilty plea.  The Guidelines clearly do not achieve this.  However, the case of Milsom demonstrates that in spite of some evidence of the shortcomings of the Guidelines, a plea negotiation framework has developed as a result of the pro-active approach taken by the courts and prosecutors, which is capable of affording significant benefits to a defendant who chooses to enter an early guilty plea on a proper basis supported by the available evidence


[2] [2010] Crim LR 665

[3] [2010] All ER (D) 113

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