The investigation and prosecution of regulatory offences: Is there an economic case for integration?

Cambridge Law Journal

Volumn 70, Issue 1, 2011, Pages 229-259

  Garoupa, Nuno ^a   Ogus, Anthony ^b   Sanders, Andrew ^c  

^a UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

^b UNIVERSITY OF MANCHESTER   (United Kingdom)

^c UNIVERSITY OF BIRMINGHAM   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 85010143500     PISSN: 00081973     EISSN: 14692139     Source Type: Journal    
DOI: 10.1017/S0008197311000237     Document Type: Article

References (102)

1. Again for the purpose of exposition, we assume that there is a clear distinction between “regulatory” crimes and “mainstream” crimes, but the qualitative conclusions still hold in the more realistic context of a convoluted and debatable distinction. See, for example, G. Lamond, “What is a Crime?” (2007) 27 O.J.L.S. 609
2. A. Ogus, “Regulation and its Relationship with the Criminal Justice Process” in H. Quirk, T. Seddon and G. Smith (eds.), Regulation and Criminal Justice: Innovations in Policy and Research (Cambridge 2010) for advocates
3. S. Tombs and D. Whyte “A Crisis of Enforcement: the Decriminalisation of Death and Injury at Work” (2008) (Centre for Crime and Justice Studies Briefing no 6, Kings College London)
4. A. Sanders “Reconciling the apparently different goals of criminal justice and regulation: the ‘freedom’ perspective” in H. Quirk et al., “A Crisis of Enforcement: the Decriminalisation of Death and Injury at Work”. for opponents, of these distinctions.
5. See, for example, A. Ogus, Costs and Cautionary Tales: Economic Insights for the Law (Oxford 2006).
6. See N. Garoupa (ed.), Criminal Law and Economics (Aldershot 2009).
7. In the second half of the 18th century in Staffordshire, for example, only 13% of the prosecutions were brought by anyone in public office: D. Hay and F. Snyder (eds.), Policing and Prosecution in Britain, 1750–1850 (Oxford 1989).
8. D. Philips, Crime and Authority in Victorian England (London 1977), ch. 4
9. J. King, Crime, Justice and Discretion in England, 1740–1820 (Oxford 2000), p. 75.
10. For example, many thieves in Essex sold stolen goods in London at that time. But the London-based Bow Street Runners charged Essex victims for their services if they became involved: the usual rule was “parties must pay” (L. Radzinowicz, A History of English Criminal Law and its Administration, vol. 2: The Movement for Reform (London 1956), p. 263).
11. King (2000), note 7 above, ch. 2 and 3.
12. C. Emsley, Crime and Society in England, 1750–1900, 2nd ed. (Longman 1996), ch. 8.
13. As indicated by the fact that by the end of the 18th century the majority of prosecutors were still not legally represented: J. Beattie, Crime and the Courts in England, 1660–1800 (Oxford 1986).
14. D. Hay, “Controlling the English Prosecutor” (1983) 21 Osgoode Hall Law Journal 165–186.
15. Quoted by L. Radzinowicz, A History of English Criminal Law and its Administration, vol. 4: Grappling for Control (London 1968), p. 196.
16. Hay and Snyder, note 6 above
17. Phillips, note 7 above, p. 114.
18. Emsley, note 10 above, ch. 8.
19. A. Bodkin, “Prosecution of Offenders: English Practice” (1928) 1 Police Journal 353.
20. However, a refusal or failure to investigate can be held to be Wednesbury-unreasonable or a breach of a tortious duty under common law. See A. Sanders, R. Young and M. Burton, Criminal Justice (Oxford 2010), chs. 7, 13.
21. S. Uglow, “Independent Prosecutions” (1984) 11 Journal of Law and Society 233–245.
22. Hay, note 12 above.
23. Journal of Law and Society
24. Royal Commission on Criminal Procedure, The Investigation and Prosecution of Criminal Offences in England and Wales: The Law and Procedure (HMSO 1981), para. 155–164.
25. For a survey see M. Weatheritt, Survey of Prosecuting Solicitors' Departments (RCCP Research Study no. 11) (HMSO 1980)
26. for general discussion see J. Sigler, “Public Prosecution in England and Wales” (1974) Criminal Law Review 642.
27. A. Sanders, “Prosecution Decisions and the Attorney-General's Guidelines” (1985) Criminal Law Review 4.
28. Royal Commission on Criminal Procedure, Report of the Royal Commission on Criminal Procedure (HMSO 1981).
29. P.B. Kurland and D.W.M. Waters, “Public Prosecutions in England 1854–9” (1959) 9 Duke Law Journal 493.
30. Sanders, Young and Burton, note 17 above, chs. 7, 12.
31. R. Flanagan, Review of Policing: Final Report (SO 2008).
32. Royal Commission (1981), note 14 above.
33. Royal Commission, para. 6.29.
34. Sanders, Young and Burton, note 17 above, ch. 7.
35. Sanders, Young and Burton.
36. R. Young, “Street Policing after PACE” in E. Cape and R. Young (eds.), Regulating Policing (Oxford 2008).
37. R.M. White, “Investigators and Prosecutors or, Desperately Seeking Scotland: Re-formulation of the ‘Philips Principle’” (2006) 69 M.L.R. 143.
38. D. Hay, Albion's Fatal Tree: Crime and Society in Eighteenth Century England (Harmondsworth 1977).
39. H. Arthurs, “Without the Law”: Administrative Justice and Legal Pluralism in Nineteenth-Century England (Toronto 1985).
40. Royal Commission on Practices and Proceedings of the Courts of Common Law, 5th Report (1833–1834).
41. P. Bartrip and P. Fenn, “The Administration of Safety: the Enforcement Policy of the Early Factory Inspectorate, 1844–1864” (1980) 58 Public Administration 87.
42. Arthurs, note 38 above.
43. This prosecutes for Her Majesty's Revenue and Customs (HMRC). See C. below.
44. B.M. Dickens, “Control of Prosecutions in the United Kingdom” (1973) 22 I.C.LQ. 1.
45. K.W. Lidstone, R. Hogg and F. Sutcliffe, “Prosecutions by Private Individuals and Non-Police Agencies” (Royal Commission on Criminal Procedure, Research Study 10, 1981).
46. See White, note 36 above.
47. Lidstone et al.), note 44 above.
48. K. Hawkins, Law as Last Resort: Prosecution Decision-making in a Regulatory Agency (Oxford 2002).
49. J. Rowan-Robinson, P. Watchman and C. Barker, Crime and Regulation: A Study of the Enforcement of Regulatory Codes (Edinburgh 1990)
50. R. Kagan, Regulatory Justice (London 1978).
51. C. Abbot, Enforcing Pollution Control Regulation (Oxford 2009).
52. Details of both cases (the L&G case, and Paul Davidson & Ashley Tatham v the FSA, aka “the Plumber” case) can be found on the FSA website: http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/082.shtml.
53. FSA, Enforcement Process Review (The “Strachan Report”) (2005). The report is available at http://www.fsa.gov.uk/pubs/other/enf_process_review_report.pdf
54. Enforcement Process Review.
55. Lidstone et al., note 44 above.
56. See e.g. Abbot, note 49 above.
57. A. Robens, (1972) Report of the Committee on Safety and Health at Work 1970–1972 (HMSO 1972).
58. Australian Law Reform Commission (ALRC), Principled Regulation: Civil and Administrative Penalties in Australian Federal Regulation (1995), paras. 6.26, 6.35.
59. The Revenue and Customs Prosecution Agency (RCPO). For details see White (2006), note 36 above. In January 2010 the RCPO became a Division of the CPS (see the CPS website for details).
60. M. Levi, “Policing Fraud and Organised Crime” in T. Newburn (ed.), Handbook of Policing (Cullompton 2008).
61. P. Hampton, Reducing Administrative Burdens: Effective Inspection and Enforcement (HM Treasury 2005).
62. D. Whyte, “Gordon Brown's charter for corporate criminals” (2007/2008) 70 Criminal Justice Matters 31
63. Tombs and Whyte, note 3 above.
64. R. Macrory, Regulatory Justice: Sanctioning in a post-Hampton world, Consultation Document (Cabinet Office 2008).
65. Department for Business Innovation and Skills, Statutory Code of Practice for Regulators (2007).
66. Statutory Code of Practice for Regulators, para. 3
67. C. Abbot, “The Regulatory Enforcement and Sanctions Act 2008” (2009) 11 Environmental Law Review 38.
68. T. Krone, “The Limits of Prosecution Authority” (Australian Law Reform Commission) (2003) (http://www.aic.gov.au/conferences/other/krone_tony/2003–11-regnet.html) identifies six different possibilities. Our dual model is about integration (types 1, 5 and 6 in his notation) and separation (types 2 to 4 in his notation, where the different control exercised by the prosecutor is a palliative to the shortcomings we have identified).
69. See also F. Guerrieri, “Law and Order: Redefining the Relationship between Prosecutor and Police” (2001) 25 Southern Illinois University Law Journal 353 (arguing for empowerment of prosecutors to supervise police behaviour and ensure proper standards of disclosure, that is, for further integration in our model).
70. The economic literature on vertical integration goes back to the 1930s, but the main foundations of the current theory were established in the late 1970s and early 1980s. For a comprehensive survey and critical discussion of the literature, see F. Lafontaine and M. Slade, “Vertical Integration and Firm Boundaries: The Evidence” (2007) 45 Journal of Economic Literature 629–685.
71. On the empirical literature about transaction cost theory, see also Lafontaine and Slade, note 66 above.
72. See, for example, D. Richman, “Prosecutors and their Agents, Agents and their Prosecutors” (2003) 103 Columbia Law Review 750–832
73. R. Barkow, “Institutional Design and the Policing of Prosecutors: Lessons from Administrative Law” (2009) Stanford Law Review 61. Krone, note 65 above identifies the costs of having the prosecution relying on the information solely gathered and provided by the police as a major disadvantage of separation (the Prosecutor Fiscal's Office in Scotland is the example provided and discussed in his article). However, the same was true of the pre-CPS model in England and Wales. The SFO is an example of an integrated approach that does not suffer from these problems.
74. For example, the jurisdictional conflicts between industry-specific regulatory agencies and antitrust authorities can be understood from this perspective. See P. Barros and S. Hoernig, “Sectoral Regulators and the Competition Authority: Which Relationship is Best” (2004) CEPR Working-Paper 4541.
75. Since plea-bargaining is prevalent without “monopoly power” the latter is clearly not a necessary condition, but one that simply enhances diversionary power. See, further, N. Garoupa and F. Stephen, “Why Plea-Bargaining Fails to Achieve Results in So Many Criminal Justice Systems: A New Framework for Assessment” (2008) 15 Maastricht Journal of European and Comparative Law 319.
76. Capture refers to situations where an agency created to pursue public interest goals acts in favor of private interests or adopts the agenda of special interests. Corruption is an extreme example of capture. For a broad discussion, see K.N. Hylton and V. Khanna, “A Public Choice Theory of Criminal Procedure” (2007) 15 Supreme Court Economic Review 61.
77. On the economic literature on accountability within the principal-agent model, see D.E.M. Sappington, “Incentives in Principal-Agent Relationships” (1991) 5 Journal of Economic Perspectives 45–66.
78. See, among others, the canonical articles by B. Holmström, “Moral Hazard and Observability” (1979) 10 Bell Journal of Economics 74–91
79. S. Shavell, “Risk Sharing and Incentives in the Principal Agent Relationship” (1979) 10 Bell Journal of Economics 55–73.
80. For example, by considering the extensive literature on intrinsic and extrinsic motivation. See R. Bénabou and J, Tirole, “Intrinsic and Extrinsic Motivation” (2003) 70 Review of Economic Studies 489–520.
81. I. Ayres and J. Braithwaite, Responsive Regulation: Transcending the Deregulation Debate (Oxford 1992).
82. Hawkins (2002), note 47 above
83. Abbot (2009), note 49 above.
84. J. Black, “Talking About Regulation” (1998) Public Law 77–105.
85. N. Gunningham and P. Grabosky, Smart Regulation (Clarendon 1998)
86. R. Baldwin and J. Black, “Really Responsive Regulation” (2008) 71 M.L.R. 59.
87. For a detailed economic analysis, see Garoupa and Stephen, note 72 above.
88. The main problem here is “undercover” policing where the police by definition integrate, to some extent, with the policed. See Sanders, Young and Burton, ch. 6, note 17 above.
89. P.J. Quirk, Industry Influence in Federal Regulatory Agencies (Princeton 1981)
90. G. Slapper and S. Tombs, Corporate Crime (London 1999).
91. M. Maggetti, “De facto Independence after Delegation: A Fuzzy-set Analysis” (2007) 1 Regulation and Governance 271–294.
92. But see Garoupa and Stephen, note 72 above discussing the problems posed by prosecution of wealthy defendants.
93. Abbot, note 49 above.
94. FSA, note 51 above.
95. Sanders, Young and Burton, note 17 above ch. 7.
96. C. Scott, “Accountability in the Regulatory State” (2000) 22 Journal of Law and Society 38–60.
97. C. Graham, “Is There a Crisis in Regulatory Accountability?” (1995) Discussion paper 13, Centre for Regulated Industries.
98. A. Ogus, Regulation: Legal Form and Economic Theory (Oxford 2004), pp. 86–87.
99. Sanders, Young and Burton, note 17 above, ch. 13
100. D. Whyte, “Victims of Corporate Crime” in S. Walklate (ed.), Handbook of Victims and Victimology (Cullompton 2007).
101. Abbot, note 49 above.
102. See Barkow, note 68 above, for a discussion about the appropriate design of policing and prosecution activities in the United States.