Speech to the Annual Retail Fraud Conference
Speech by Solicitor General Edward Garnier QC MP
“Thank you for inviting me to speak to you today. I see this is the 8th Annual Retail Fraud Conference, but I understand I’m the first Law Officer to address one, so I will start by saying a bit about our role.”
The Law Officers
“The Attorney General and I are the Government’s ‘Law Officers’. To most people nowadays (perhaps even to some Law Officers) the Law Officers are something of a mystery. The Office of Attorney General is an ancient one, though much changed over the years. Legal historians like to argue about who the first Attorney General was though given the way that the role has changed it is debatable whether the “first” Attorney was in any meaningful sense like the Attorney of today.
“I am not even sure whether my ancestor, William de Grey, who between 1762 and 1781 was successively Solicitor and Attorney General and then Lord Chief Justice of the Common Pleas, would recognise the office today. He suffered so badly from gout in his hands and fingers that he could not hold a quill to take a note of the evidence or the arguments and yet as a judge delivered extempore judgments after lengthy civil trials that better historians and lawyers than I tell me would pass muster in today’s higher courts. I have inherited his pride in being a Law Officer and gout - but not his intellect.
“But what history has bequeathed us is an Attorney General who is a Minister of the Crown and Chief Legal Adviser to the Government. He is not a member of Cabinet though he will attend when his advice is required or when matters within his responsibility come up for consideration. He also exercises a number of functions in the public interest, such as the power to bring contempt proceedings to protect criminal trials and the administration of justice. He superintends the ‘Law Officers’ Departments’, including the Crown Prosecution Service and the Serious Fraud Office. He also oversees the Government Legal Service.
“So, as Law Officers, the Attorney General and I are politically appointed and members of the government, but we are not only political ministers like other members of the government; we are also lawyers. (In my case, I have been a Barrister for 35 years, a QC for 15 of those, and worked as a Recorder - a part-time judge - in the Crown Court since 1998.) The core function of the Attorney General is to make sure that government, that Ministers, act lawfully, in accordance with the rule of law.
“Of course the public only see the capital ships, dressed fore and aft, steaming full steam ahead on the high seas, occasionally firing their guns, but below the surface and silently, and known only to a few in the law and in Whitehall, are the 2 submarines, HM Attorney and Solicitor. When we go on manoeuvres we do so to have an effect. There are many examples of activities carried out in confidence for governments of both colours where the advice and restraining hand of the Law Officers has been both sensible and well received. When we surface it is usually to apply to the courts in a contempt case, or to complain of an unduly lenient sentence. But so much of our time is not spent just saying, “No, but have you thought about doing it this way?” which is what all good lawyers should do for their clients.
“As I have said, one of the Departments the Law Officers superintend is the Serious Fraud Office (SFO). The SFO’s forensic accountants, professional investigators and lawyers investigate and prosecute the most serious or complex instances of fraud and corruption, in England, Wales and Northern Ireland. By bringing criminals to justice they help maintain confidence in the UK’s business and financial institutions. The Director of the SFO is appointed by and accountable to the Attorney General, who is responsible to Parliament for the SFO and the other Law Officers’ Departments.”
The role of the CPS within the Criminal Justice System
“The largest of these Departments is the Crown Prosecution Service (CPS). The CPS was set up in 1986 as an independent authority to prosecute criminal cases investigated by the police in England and Wales. It is headed by the Director of Public Prosecutions (DPP), and its role includes:
- advising the police during the early stages of investigations
- determining the appropriate charges in more serious or complex cases
- keeping all cases under review and deciding which should be prosecuted, by applying the ‘Code for Crown Prosecutors’
“The key principles of this Code are that a prosecution should only go ahead if there is enough evidence to provide a realistic prospect of conviction, and, if so, where a prosecution is needed in the public interest. If a prosecution does go ahead, the CPS then has to:
- prepare cases for court, and either prosecute them by in-house advocates, or instruct agents and/or counsel to present cases
- provide information and assistance to victims and prosecution witnesses
So, to over-simplify:
- the Home Secretary is responsible for the police, who investigate crime, and can deal with offences without them going to court
- the Law Officers are responsible for the CPS and other agencies who prosecute offences in court
- the Lord Chancellor is responsible for the courts that try cases and the prison and probation services who take charge of convicted offenders”
The partnership approach to preventing retail crime
“Of course, the ideal is to make this system redundant, by preventing crimes being committed in the first place. This government has put cutting crime at the centre of our ambition, and this includes crimes against business and retailers. We believe a strong partnership approach is needed to tackle retail crime, and we are firmly committed to working alongside business and trade associations to find effective solutions and responses.”
National Retail Crime Steering Group
“The National Retail Crime Steering Group, set up by the Home Office with the British Retail Consortium, embodies this partnership approach at the national level. It brings together many of the key organisations involved in the fight against retail crime: the government, the police, major retailers and trade associations. The Steering Group, co-chaired by the Home Office’s Parliamentary Under-Secretary of State for Crime Prevention, James Brokenshire, provides a forum to discuss and devise strategies for tackling crimes of concern to retailers, including shop theft, violence against staff and the growing threat of e-crime. At this national level, the government will work with industry and businesses to broker solutions that cannot be solved by local action alone and will promote the sharing of effective practice.
“Part of the Steering Group’s role is to support businesses to do more to help themselves, through both greater crime prevention activity by designing out crime, and taking more corporate social responsibility, to deny opportunities for criminals to commit crimes. Effective crime prevention advice is available for businesses, and the Home Office is making it a priority to share good practice examples of businesses working together, and in partnership with the police and other law enforcement agencies, to tackle retail crime locally.”
Local partnerships
“The key local partnerships for working to cut crime are Community Safety Partnerships (CSPs). CSPs already have a duty to seek the views of the public and people who represent the interests of many different groups, which should include the business community. Whilst it is for each partnership to determine whether business crime is a priority that needs to be addressed in their local area, the Home Office would expect businesses to engage with their CSPs where possible.”
Police and Crime Commissioners
“From May 2012, the government is replacing bureaucratic police authorities with directly elected Police and Crime Commissioners (PCCs). The Home Office will give them the maximum control over their resources so they can decide how best to tackle crime at a local level. I understand there is a concern that PCCs may consider business crime a low priority. But they will have to respond to the needs of the local community as whole, including businesses, and the government would expect PCCs to engage with all their principal local partners, so that they can identify and focus on the key priorities across their local area.
“This is a real opportunity for the police to be more accountable to their local communities and businesses, and for businesses to influence the local policing agenda. I understand that the British Retail Consortium will be producing guidance for PCCs which will assist them with the issues of crimes affecting business, which is a positive step.”
The purpose of the criminal justice system
“But crime reduction will sadly only take us so far. Before I turn to the 3 types of retail crime I’ve been asked to speak to you about, I want to say something about what the criminal justice system is for. Its purposes include securing justice for victims, punishing offenders, protecting the public, and reducing re-offending. This government will always provide enough prison places for those whom the courts judge should receive a custodial sentence. But the criminal justice system is not simply a numbers game, about how many people are locked up. It is about the right response to stop people committing crime, from preventing offending in the first place to stopping reoffending.
“The most recent figures show that, for adults discharged from custody or starting a court order under probation supervision, 43 per cent are reconvicted within one year, 55% within 2 years; 68% within 5 years; and 74% within 9 years. The government is committed to reducing this level of re-offending, and that entails taking into account the effectiveness of various punishments in getting offenders to desist from crime. It is significant, for instance, that (in 2007) court orders under probation supervision were more effective (by 7 percentage points) at reducing one-year proven reoffending rates than custodial sentences of less than 12 months, for similar offenders. As retailers, I quite understand that your concern may simply be that people who commit crime against you should be severely punished. But government, and indeed all of us as members of society, must also be concerned to prevent further offending.
Retail crime in London
“The partnership approach I referred to earlier can also make a vital contribution to bringing offenders to justice. For instance, the CPS here in London has been working closely with the New West End Company (the Oxford Street retail association). You don’t need me to tell you that there is a lot of shoplifting in West End stores but, recently, the offending has become more serious and more organised. We are not only talking about theft by individuals for themselves, but also that by organised criminal gangs. Both the police and the CPS have had to respond to this development.
“There have been a number of notable successes in smash and grab cases. For instance, following some brave and enterprising evidence gathering by members of the public and an off-duty police officer, the police and the CPS were able to bring to justice 5 of the 6 members of a gang who had carried out a smash and grab raid on motorcycles, at Ernest Jones jewellers in Oxford Street. These 5 received custodial sentences of between 4 and 6 years.”
Shoplifting
“I want to assure you that the government regards shoplifting as a serious problem. After all, The British Retail Consortium’s recent survey of retail crime showed that theft by customers is the largest component of such crime, both in terms of value of stolen items (estimated at over £750 million 2009/10) and the proportion of incidents (over 95%). In 2009/10, there were 3,490 incidents of customer theft per 100 outlets, thankfully down 10.6% from 2008/09.
“Like all crime, retail theft requires a proportionate response. When the police arrest someone, they have a range of ways of dealing with the offence, using their professional discretion, including ‘out-of-court disposals’. These allow the police to deal quickly and proportionately with certain kinds of (often first-time) offending, which does not require prosecution at court.
“This frees the police to spend more time on frontline duties. Realistically, it also means that offences that might previously never have been sanctioned on account of pressure of other demands now receive a formal penalty. Using an out-of-court disposal also frees the police - and retailers - from possibly having to attend court as witnesses. And last but not least, it frees up prosecutors’ resources.
“Or, the police may decide, on CPS advice if necessary, that the circumstances of the offence or the offender (perhaps a persistent offender who has already received more than one out of court disposal) require him or her to be charged and taken to court. CPS records do not identify retail crime as a separate category, but figures for the prosecution of all cases of theft and handling show that, in 2009/10, the CPS’s success rate in securing convictions in these cases was impressive, approximately 93%.
“Following a conviction, the sentence is a matter for the court. You may be aware that in 2008 the Sentencing Guidelines Council issued a guideline on ‘Theft and burglary in a building other than a dwelling’. This covers theft from a shop. It makes clear that organised activity by a gang or the use of intimidation and threats will be treated as a more serious offence.
“It indicates that it will be an aggravating factor if the thief was already banned from the shop, whether this is a court imposed ban or a ban imposed by the shop owner or manager. The guideline also indicates that it will be an aggravating factor if the theft is committed against a particularly vulnerable victim - for example small independent shops, or if high value goods are targeted.
“If the offender does not go to prison, a fine may be used to hit them where it really hurts - in the pocket; or the offender may receive a non-custodial penalty. This is no soft option, but will be rigorously supervised by the Probation Service. As I said earlier, such orders have been shown to be more effective at reducing reoffending than short custodial sentences. They include requirements aimed at dealing with the causes of the offending behaviour.
“In the case of a shoplifter, this may well be drug addiction. (64% of all newly sentenced prisoners report using a drug during the four week period before custody; this reflects what I have seen myself in visiting many prisons.) A court order under probation supervision may be the best opportunity to enable an offender to overcome the drug habit they have been stealing to feed; and simply to give them the will and the ability to find and hold down a job.”
Assaults on staff
“Shop workers and those serving the public do an important job and it is only right that they are able to do so without the risk of physical and verbal assault from customers and others. The British Retail Consortium’s survey I mentioned earlier showed 14 incidents of violence against retail staff per 1,000 employees. Although these figures have thankfully shown a strong downward trend over the last 6 years, this remains an unacceptably high level. The government strongly believes that any act of violence or abuse against retail staff is unacceptable and should not be tolerated. Tackling such offences is a key theme for the National Retail Crime Steering Group.
“The government also welcomes what a number of businesses are doing to counter such violence, for instance by providing staff with conflict resolution or violence prevention training. We also want to see major retailers continue to demonstrate commitment and support to smaller businesses in tackling abuse and assault against staff, as part of both their responsibility as good employers, and their corporate social responsibility.
“I mentioned earlier how partnership working can also support a criminal justice response. Last October, a joint initiative between Crimestoppers and the Association of Convenience Stores was launched, which established financial rewards for information leading to a conviction for cases in relation to violence against those working in the retail sector.
“And as I said about shoplifting, after conviction, sentencing is a matter for the courts. Last month, the independent Sentencing Council released revised definitive guidelines for sentencers on assault offences. These aim to ensure a consistent and proportionate approach to sentencing in these cases, so that it reflects both the harm convicted offenders have caused their victim and their culpability. The guidelines restate the Sentencing Council’s view that judges and magistrates should consider it an ‘aggravating factor’ if an assault is committed against those working in the public sector or providing a service to the public - which the Council has made clear includes those who work in shops and the wider retail business.”
Fraud
“The National Fraud Authority’s most recent Annual Fraud Indicator, published in January, indicates that fraud against the retail, wholesale and distribution sector costs £2.7 billion a year. The British Retail Consortium’s survey found that retail fraud specifically accounted for over 10% of retail crime by value - that is, over £110 million - in 2009/10. The largest single category of fraud attempts (40%) were attributable to card-not-present transactions. But the largest category of retail fraud by value (60%) was refund fraud, which had increased since 2008/09.
“These figures are a serious cause for concern, particularly as a large amount of fraud is not reported. In the past, not having a centralised body to co-ordinate fraud intelligence made it easier for criminals to operate undetected and free to re-offend. This problem was addressed last year, by the launch of the National Fraud Intelligence Bureau (NFIB). The NFIB was developed and overseen by the City of London Police as part of its role as the national lead force for fraud. The NFIB database is populated from a large number of organisations within the public and private sectors, representing industry, commerce and government.
“The NFIB employs analysts from both law enforcement and private sector backgrounds to sift through the raw intelligence, searching for distinct patterns of fraudulent activity and behaviour. Once a trend has been spotted, such as organised crime groups associated with fraud, an intelligence report will be dispatched to the relevant police forces to be used in their investigation.
“Members of the public and small and medium sized businesses are able to provide the NFIB with information about fraud by using the newly developed national fraud reporting centre, Action Fraud, which is run by the National Fraud Authority. I would encourage all businesses to report fraud to, and if necessary get advice from, Action Fraud. Larger businesses can report directly to the City of London Police. As with any other crime, if fraud is not reported, law enforcement authorities cannot build up the intelligence they need to inform an effective and targeted response. But I know that Stephen Harrison from the NFA is speaking to you later today, so I won’t say any more about fraud.”
Conclusion
“I hope I have assured you that the government takes all forms of crime against retailers seriously. We and the criminal justice agencies want, and need, to work with you, ideally to prevent retail crime, or to ensure an effective response when it occurs.”