Insolvency Act Offences : A Suitable Case for Guidance?

Those who deal with cases brought by the Department for Business Innovation and Skills (DBIS) for offences under Insolvency Act 1986 Part IX Chapter VI (ss. 353 – 362) will also be familiar with the various authorities often cited by the Department in the sentencing guidance.

Three principal cases (Colfer [1997] EWCA Crim 14361, Beauchambe [1998] EWCA Crim 24112 and Mungroo [1997] EWCA Crim 12933) all tend to demonstrate the serious consequences for those who flout the protection given to bankrupts under the provisions of the Act.

While it can rarely be said that the quantum of monies in respect of which creditors have been defrauded is the only criterion for establishing the length of sentence, there are a number of issues, considered below, which would in this writer's opinion, tend to show that we might soon expect consideration of this field by the Sentencing Council.

Turning briefly to consider the three cases cited above; in the first (Colfer) immediate consecutive sentences of 6 and 12 months imprisonment in relation to failure to disclose £5,000 and then subsequently obtaining a loan of £30,000 were imposed (being reduced from 12 and 18 months respectively).

The case of Beauchambe was far more complex; here there was a serious and very deliberate fraud committed over a considerable period of time by the defendant. In spite of ill health and the considerable age of the defendant, 2 years imprisonment concurrent for a number of offences involving cash and goods (total just less than £60,000) were upheld.

Finally, and some might think most harshly, Mungroo received an immediate sentence of two months imprisonment despite being a man of good character and having an exemplary service record. He failed to use a gratuity of £31,000 (received upon leaving the Army) to pay his creditors, and did not inform the Official Receiver or the Judge in his Bankruptcy proceedings of the award.

Mr Justice Ognall giving judgment indicated that it should "be clearly understood that in all normal circumstances, such conduct does cross the custody threshold".

It can be seen, therefore, that despite the relatively modest sums of money involved, immediate custody can follow for those who flout the protection, and thus attack the basis, upon which the bankruptcy legislation is founded.

It is respectfully submitted that these sentences do not compare particularly well with what one might consider to be the more measured approach taken by the Sentencing...

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