Restitution

The Victorian Sentencing Advisory Council report Restitution and Compensation Orders addresses Terms of reference that required the Council to "examine whether restitution and compensation orders made under the Sentencing Act 1991 (Vic) should become sentencing orders, rather than remain as orders in addition to sentence (often called ancillary orders)".

That examination involved advising on whether:

• the purposes of sentencing should include the financial reparation of victims;

• there should be a presumption in favour of courts making such orders; and 

• such orders should be enforced by the court in the manner of a fine. If it concluded that restitution and compensation orders should become sentencing orders, the Council was asked to consider: 

• the most appropriate processes and procedures for restitution and compensation orders in all courts; 

• whether victims should have a right of appeal against the amount of an order awarded or the court’s failure to make an order; and 

• whether an offender’s financial circumstances should be taken into account when making an order. 

The Council comments that

A substantial number of recent reviews and proposed reforms, both in Victoria and nationally, are likely to address some of the issues encountered by victims seeking compensation, as well as improve victims’ experiences with the criminal justice system more broadly. Recent reviews and reforms include:

• the Victorian Royal Commission into Family Violence and consequential improvements to the treatment of victim survivors of family violence; 

• the VLRC’s The Role of Victims of Crime in the Criminal Trial Process: Report, which made a number of recommendations aimed at improving the treatment of victims in the criminal justice system; 

• the VLRC’s review of the Victims of Crime Assistance Act 1996 (Vic); 

• the Commonwealth Royal Commission into Institutional Responses to Child Sexual Abuse; 

• the establishment of the National Redress Scheme for victims of institutional child sexual abuse; and 

• the Commonwealth Government’s review of the rules governing the early release of superannuation, and whether an offender’s superannuation should be available to pay restitution or compensation to victims of crime. 

Its Guiding principles were

1. ensuring that proposed reforms accord with the rights contained in the Charter of Human Rights and Responsibilities Act 2006 (Vic) and the Victims’ Charter Act 2006 (Vic); 

2. ensuring that proposed reforms will not place a victim in a situation of increased risk, in the context of both family violence offending and other kinds of interpersonal offending; and 

3. managing victims’ expectations, in particular avoiding the creation of false expectations for victims as to what the reforms to restitution and compensation orders can realistically achieve. 

The Report states

In preparing its advice, the Council has been conscious of the fact that most offenders have very limited financial resources. The Council does not, however, have data on the financial resources of offenders. Reforms that are intended to improve the enforcement of restitution and compensation orders rely on the assumption that the current system does not recover (or does not efficiently recover) payment of such orders from all offenders who have the capacity to pay. 

Due to data limitations, however, it is difficult to test that assumption, and determine whether the current low level of payment of restitution and compensation orders reflects offenders’ lack of means or failures or inefficiencies in enforcement. Due to data limitations, it is not possible to determine whether the current system is achieving efficient recovery of money from the small proportion of offenders who actually have the capacity to pay. 

The Council’s recommendations aim to increase payment and enforcement rates from those offenders who have some capacity to pay. The Council has also stressed the need for a coherent approach to victims’ compensation in Victoria, and the importance for the government to consider the interaction between the different options for compensation open to a victim. The Council considers that the proper compensation of victims requires a coherent approach to both state and offender-paid compensation.

It goes on to state

Should restitution and compensation orders become sentencing orders? 

The current hybrid system of restitution and compensation orders, that is, a system that incorporates elements of both criminal and civil law, provides a number of practical benefits for victims that cannot be achieved in either a strictly criminal or a strictly civil proceeding. For example:

• victims do not need to establish their loss before a separate judicial officer;   

• victims do not need to establish their loss to the criminal standard of proof (‘beyond reasonable doubt’), but rather can satisfy the civil standard (‘on the balance of probabilities’); 

• victims do not need to pay the costs associated with bringing a claim in a civil court; and 

• the process is faster and more streamlined than bringing a separate claim for civil damages.

The Council has been cautious to preserve these benefits of the current system. The Council’s intent is to improve the practical outcomes for victims, without removing the significant benefits of the current hybrid approach to restitution and compensation orders.

In light of the guiding principles, the Council considers that making restitution and compensation orders sentencing orders would raise several insurmountable problems, including eroding the fundamental principle of equality before the law, and potentially exposing victims to retraumatisation in the process of establishing their losses. The Council’s consultation has established that the overwhelming majority of stakeholders do not consider that such a change would be desirable, and consider that it would be unlikely to improve practical outcomes for victims.

Similarly, in relation to the secondary question of whether the purposes of sentencing should be expanded to include victims’ financial reparation, the Council has concluded that to do so could fundamentally undermine the sentencing process by leading to differential sentencing outcomes depending on the financial circumstances of an offender or the individual circumstances of a victim.

In light of its research and consultation, the Council recommends that restitution and compensation orders should not become sentencing orders. 

Recommendation 1: Restitution and compensation orders to remain ancillary orders 

Restitution and compensation orders should remain ancillary orders that are made in addition to a sentence under the Sentencing Act 1991 (Vic), and should not become sentencing orders. 

While affirming the status of the orders as ancillary, the Council considers that the current system for making and enforcing restitution and compensation orders could be improved by:

• increasing the availability and consistency of information and legal advice to victims about restitution and compensation orders; 

• increasing the use, in appropriate cases, of the current power to restrain assets for the purpose of meeting an order for restitution or compensation under the Confiscation Act 1997 (Vic); 

• retaining the ability of a court to take into account the financial circumstances of the offender in making a compensation order (sections 85H and 86(2) of the Sentencing Act 1991 (Vic)); 

• increasing a victim’s ability to enforce restitution and compensation orders on their own behalf; and 

• considering the introduction of a hybrid model for enforcement of restitution and compensation orders, involving state enforcement of the orders through civil mechanisms, where a victim (who is a natural person) elects to assign their right of enforcement to the state. 

Provision of information to victims 

A number of stakeholders, including victims of crime, noted during consultation that there is a need to improve the consistency and timeliness of the provision of information to victims of crime concerning their right to restitution or compensation. The Council recommends the establishment of a working group, coordinated by the Victims of Crime Commissioner, to review and consolidate information provided to victims of crime concerning their options for compensation, in order to ensure the consistency and accuracy of information provided to victims in relation to orders for restitution or compensation and the enforcement of these orders. As the Victims of Crime Commissioner’s role is to advocate, investigate, report and advise in relation to systemic issues for victims of crime, the Council believes the Commissioner would be best placed to coordinate this reform. 

Recommendation 2: Victims of Crime Commissioner to establish a working group to consider provision of information to victims 

The Victims of Crime Commissioner should establish a working group that includes representation from: the Department of Justice and Regulation; the Office of Public Prosecutions; and Victoria Police. 

The working group should review and consolidate information and resources provided to victims of crime concerning avenues for compensation to ensure that all resources contain consistent and accurate information on:  making an application for a restitution and/or compensation order under the Sentencing Act 1991 (Vic); and how such an order is enforced. 

Agencies to review policies and training 

The Council notes that the timely investigation and restraint of offenders’ assets can increase the possibility of successful enforcement of an order for restitution or compensation. The Council heard from a number of stakeholders that the use of these powers could be improved.

Accordingly, the Council recommends strengthening coordination between Victoria Police and the Office of Public Prosecutions regarding the investigation of offenders’ assets and applications for restraining orders for the purposes of meeting an order for restitution or compensation.

Based on stakeholder feedback, the Council does not consider increased powers of forfeiture of an offender’s assets to be appropriate or necessary.

Recommendation 3: Agencies to review policies and training

Victoria Police and the Office of Public Prosecutions should review policies and training to ensure that consistent internal and inter-agency approaches are taken to:

• investigating offenders’ assets; 

• applying for restraining orders under the Confiscation Act 1997 (Vic); and 

• applying for orders for restitution and/or compensation under the Sentencing Act 1991 (Vic).

Retention of discretion to consider offenders’ financial circumstances

The VLRC previously recommended that the County and Supreme Courts, in making a compensation order in favour of an individual under the Sentencing Act 1991 (Vic), should not have regard to an offender’s financial circumstances. The VLRC considered that an approach consistent with a civil court, which generally has no regard to a defendant’s capacity to pay when determining an award of damages, should instead be adopted.

As it recommends strengthening the enforcement of restitution and compensation orders (through consideration of state enforcement of these orders using civil mechanisms), the Council recommends the retention of a court’s discretion to consider an offender’s financial circumstances when making such an order. The Council prefers an overall approach to restitution and compensation orders under the Sentencing Act 1991 (Vic) that maintains the hybrid status of these orders.

Retention of the discretion to consider an offender’s financial circumstances is also consistent with one of the Council’s guiding principles: to avoid creating false expectations for victims of crime as to what amount of compensation they are likely to receive from an offender. 

Recommendation 4: Retention of discretion to consider offenders’ financial circumstances 

Sections 85H and 86(2) of the Sentencing Act 1991 (Vic) should be retained, allowing a court in making a compensation order for injury or property loss to take into account, at the court’s discretion and as far as practicable, the financial circumstances of the offender and the nature of the burden that payment of the order will impose. 

A Council Director expressed a minority view that section 86(2) of the Sentencing Act 1991 (Vic) should be repealed, so that when a court considers making a compensation order for property loss, an offender’s financial circumstances cannot be taken into account. 

Instalment orders 

The Council considers that the power of a court to make an instalment order at the time it makes a compensation order is underutilised. The Council therefore recommends that judicial officers should give particular consideration to whether it may be appropriate to make an instalment order at the time of making a compensation order. This recommendation aims to encourage payment of orders from offenders who are in a position to commence payment at the time the order is imposed. 

Recommendation 5: Court to consider making instalment order following compensation order 

When making a compensation order, a judicial officer should give particular consideration to whether it may also be appropriate to make an instalment order, having regard to the victim’s wishes.

Waiver of fees associated with civil enforcement mechanisms for certain victims

The Council heard from a broad range of stakeholders that the removal of fees for victims who are natural persons, as well as not-for-profit and charitable organisations, could eliminate a financial barrier for victims seeking to enforce orders for restitution or compensation, and may encourage victims to enforce orders independently. Consequently, the Council recommends that the Victorian Government should consider waiving enforcement fees for victims of crime who are natural persons or charitable organisations. 

Recommendation 6: Waiver of Department of Justice and Regulation and court fees for victims 

The Victorian Government should consider amending all necessary legislation to enable the Department of Justice and Regulation (including the Sheriff’s Office), and all relevant courts, to waive appropriate fees for victims of crime seeking to enforce orders for restitution or compensation where the victim is a:

• natural person; 

• public benevolent institution; 

• charitable, religious or educational organisation; or 

• other not-for-profit entity. 

Consideration of state enforcement of restitution and compensation orders through civil mechanisms 

The Council heard from stakeholders that the process of enforcing an order for restitution or compensation through the civil system can be expensive, complex and traumatic for victims. In order to overcome such barriers to enforcement, and consistent with maintaining the hybrid approach to restitution and compensation orders, the Council recommends consideration of a hybrid approach to enforcement of those orders, through state enforcement using civil mechanisms.

If state enforcement is introduced, the Council recommends that there be certain limits placed on the state’s use of civil enforcement mechanisms. This acknowledges that vigorous state enforcement against offenders who have no capacity to pay could result in further punishment that is not taken into account in the sentencing process. Placing reasonable limits on civil enforcement by the state also seeks to avoid an approach that could lead to the imprisonment of persons for failure to pay civil orders.

Many stakeholders noted the potential risk to victims of family violence if state enforcement were to occur automatically. In accordance with this feedback, the Council recommends that the enforcement agency should only enforce orders at the election of the victim. 

Recommendation 7: Consideration of state enforcement of restitution and compensation orders through civil mechanisms 

The Victorian Government should consider whether the Department of Justice and Regulation’s Infringement Management and Enforcement Services, or another specialist enforcement agency, should be empowered to enforce restitution and compensation orders on behalf of victims of crime who are natural persons.

If such state enforcement of restitution and compensation orders is introduced, the enforcement agency should:

• only enforce an order at the election of the victim, and the victim should have the ability to direct that the enforcement agency cease civil enforcement action; 

• only be empowered to use civil mechanisms of enforcement, consistent with the current powers for a judgment creditor to enforce a judgment debt under the Judgment Debt Recovery Act 1984 (Vic) and other relevant legislation; 

• be bound by the protections for civil judgment debtors in Victoria, including:  limitations on the seizure and sale of goods or property that are protected under section 42 of the Supreme Court Act 1986 (Vic); and  the prohibition under section 12 of the Judgment Debt Recovery Act 1984 (Vic) on instalment orders against offenders whose income is solely derived from government benefits; 

• only pursue enforcement of an order where, in the opinion of the enforcement agency, there is a reasonable prospect of substantially satisfying the order within a reasonable time; and 

• receive all necessary additional resources, including:  sufficient staff, including legally qualified staff with expertise in judgment debt recovery and victims’ compensation, and knowledge of the nature and dynamics of family violence; and  IT systems that allow for agency staff to ascertain whether an offender has fine debt and/or infringement debt, as well as any relevant civil debts for which enforcement action has been taken. 

Consideration of a specialist victims’ legal service 

The Council heard from several stakeholders about the difficulties for victims in obtaining legal advice on their compensation options. Stakeholders considered that the current system for making and enforcing restitution and compensation orders could be improved through the provision of timely and comprehensive legal advice to victims on their compensation options. A number of stakeholders emphasised the need for specialist advice in what is a complex area of law, including advice on all the potential avenues for compensation that may be open to victims, both against offenders and against third parties. 

The Council considers the provision of comprehensive legal advice, although beyond the terms of reference, to be of particular importance in managing victims’ expectations as to whether they are likely to receive compensation. It may also ensure that the most appropriate avenue for compensation is pursued depending on the circumstances of a particular case. The availability of such a legal service could complement a state enforcement agency, as victims could be directed to more suitable compensation options in circumstances in which an offender may not have any capacity to pay an order for restitution or compensation.

The Council also stresses the need for those providing legal advice to victims of crime to have an understanding of a broad range of compensation options for victims, including civil compensation. Those providing legal advice to victims of crime should also have an understanding of the potential dynamics between victims and offenders, particularly in the family violence context. 

Recommendation 8: Consideration of a specialist legal service to assist victims of crime with compensation matters 

The Victorian Government should consider establishing a specialist victims’ legal service that would provide:

• comprehensive free legal advice to victims of crime on their options for compensation, including orders for restitution or compensation under the Sentencing Act 1991 (Vic), the Victims of Crime Assistance Tribunal, civil compensation and/or any applicable compensation schemes; and 

• legal information or advice throughout the criminal trial process where this is not provided by other agencies.

The victims’ legal service should be supported by all necessary resourcing, including staff with expertise in victims’ compensation (including civil compensation), and knowledge of the nature and dynamics of family violence.