Month: June 2010

Fines Act 2010: paying fines or doing time?

Today’s Irish Times editorial says that prison is not always the answer.

ON OCCASION, popular policies are simply wrong. The practice of locking people up for relatively minor offences has been hugely expensive and largely counter-productive.

This is certainly true in the case of minor offences and non-payment of fines.

Do not pass go

The Fines Act 2010 has been signed into law by the President but will not be commenced by the Minister for Justice and Law Reform until the Courts Service is ready to facilitate implementation. The most high-profile aspect of the Act is to provide alternatives to imprisonment for non-payment of fines, but it also increases the maximum fines that can be imposed for many offences.

Alternatives to jail

It may seem bizarre to jail someone for not paying for their TV licence, although imprisonment for non-payment of fines is somewhat more complicated than that. In reality, the jail term is imposed for ignoring a court order (to pay the fine), rather than for the original offence.

Though they were not specifically required to do so in the past, District Court judges generally inquire into the financial position of a defendant before setting the level of fine and the time in which it may be paid. Someone on a low-income with a number of dependents might be given a small fine and a period of months in which to pay it. When setting the penalty, the judge sets a number of days ‘in default’: this is the period of imprisonment that will result for non-payment.

The Fines Act includes a statutory requirement to enquire into the means of a defendant and, importantly, provides for payments by instalment and alternatives to imprisonment for non-payment. This area of the law has been the subject of extensive research, including the Nexus report and the Law Reform Commission’s report on penalties for minor convictions. The main points of the new system are:

  • When convicted, the judge must take into account the defendant’s financial circumstances before setting a fine. This is known as equality of impact: the impact of a fine should not be made more or less severe as a result of the defendant’s financial circumstances.
  • If a requirement to pay the full fine by a particular date would cause financial hardship, the judge can order that it be paid in instalments. However, the full amount will generally have to be paid within 12 months.
  • If a fine remains unpaid, a receiver can be appointed to recover the fine by seizing and selling the defendant’s property. A judge can also order that a fine be recovered as if it were a civil debt.
  • A judge will now be able to order community service instead of imprisonment for non-payment. Previously, community service could only be ordered as an alternative to a prison sentence (ie. not in place of a fine).

[Update] It has been reported that the average cost of keeping inmates in prison has fallen to €77,222, a drop of 17%. However, that still works out at €212 per day in prison. Take again the example of the individual who fails to pay for their TV licence: the State loses €160 in revenue for the licence. It must then bear the cost of prosecution, which could reach a few thousand euros. Say the defendant is punished at the extreme end of the scale, receives the maximum fine of €1,000 and is jailed for 10 days for non-payment.

Not including the cost of prosecution, the State is at a loss of €3,280. With the cost of prosecution included, the full cost will be around €5,000. In 2009, 60 people were jailed for this offence and 3,500 were jailed in total for non-payment of fines. Obviously, there is a financial incentive for using the alternative provisions of the Fines Act in future.

Penalty fines

The Act also contains a more straightforward system for setting the maximum fines for offences. From now on, all new legislation  covering minor offences (ie. on summary conviction) must categorise the fine in accordance with the Act. Until now, each individual penalty fine has been set in the relevant legislation as a punt or euro amount and, if the level of the fine was to be changed, it had to be done individually for each specific offence.

The Fines Act sets out a new system of categorised fine for minor offences:

  • Class A: maximum fine of €5,000
  • Class B: maximum fine of €4,000
  • Class C: maximum fine of €2,500
  • Class D: maximum fine of €1,000
  • Class E: maximum fine of €500

Existing offences are retrospectively classified. This could lead to significant increases in maximum fines for old offences that have not been amended in recent decades. Fines for more serious offences will also be increased by a multiplier: for example, a fine for a serious offence set between 1965 & 1975 will be multiplied by 10.

Here are two examples, albeit by reference to relatively obscure offences:

  • The offence of indecent exposure carries a maximum fine of £500 (€634.87). Under the Fines Act, that will become €1,000.
  • It is an offence to make a false statement when applying for a lottery licence or permit, punishable by a fine of up to £100 (€127). Under the Fines Act, the maximum penalty will be €2,500.

These examples illustrate that the increase might be of a few hundred euro, or a few thousand. If there is a Class A offence out there that has not been updated since 1914, the maximum penalty could go from around €100 to €5,000.  The explanatory memorandum (from when the Act was at bill stage) says that the increases

will not represent a real increase in the amount of the fine, it will simply maintain its value and ensure that the intentions of the Oireachtas when passing the legislation are respected.

The latter part of that sentence may be true but the increase will be very real for someone convicted under an old piece of legislation.

Nevertheless, the new system of fines is practical as the classes of offences can be changed without the necessity of amending every piece of legislation on the books. In addition, lawyers and judges can now refer to penalties by class, rather than having to remember or keep note of a wide variety of maximum penalty for different offences.

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Lesser known crimes: is that trade mark really registered?

Do you use the ® symbol and, if so, do you know what it means? If you don’t, you might be committing an offence.

I have written before about the different legal structures under which a business may be run. The only reference to trade mark law in that post was to point out that a registered business name is not, of itself, a trade mark.

The Trade Marks Act 1996 defines a trade mark as “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings.” This is an example of legalese.

The Patents Office, which handles the registration of marks, offers a more helpful definition:

A trade mark is the means by which a business identifies its goods or services and distinguishes them from the goods and services supplied by other businesses.

You might identify your business using a company or registered business name and therefore use it as a trade mark. However, it is not a registered trade mark. A registered trade mark provides a monopoly on the use of trade mark: it stops others from using it. Of course, there are limitations to that monopoly and not all marks can be registered. See here for a good FAQ on registered trade marks.

Whatever about the detail of trade mark law, the ™ and ® symbols are familiar to us all. But what do they mean?

  • Using the symbol indicates that you are using a name or logo as a trade mark. It does not offer specific protection. However, you might take an action for passing off (which is like suing on the basis of an unregistered trade mark) and will obviously require evidence of using the mark as a trade mark. Use accompanied by the ™ sign may assist.
  • Using the ® symbol indicates that the name or logo is registered as a trade mark.

The difference is not merely technical. Section 94 of the Trade Marks Act 1996 provides that it is an offence to falsely represent that a mark is registered. The fine was originally a maximum of £1,000 with a further fine of up to £100 per day for a continuing offence.

The recent Fines Act 2010, which has been signed into law by the President but has not yet been commenced by the Minister for Justice and Law Reform, will increase these fines. If my reading of the Act is correct, a section 94 offence will become a Class C offence and therefore carry a maximum fine of €2,500, with the daily fine for continuing offences becoming a Class E offence with a fine of up to €500 per day.

A known unknown in eircom’s “three strikes” system

Adrian Weckler has published a copy of the intended notification to be issued by eircom to its customers when accused of unlawful filesharing by the Irish recording industry (represented by IRMA). It is, as warning letters go, extremely polite.

I mentioned last month that this “three strikes” system agreed between IRMA and eircom was approved by the High Court (for data protection purposes) on the basis that IRMA would not know “that the infringer is a particular person living in a particular place in Ireland”. In fact, Charleton J. said that all IRMA will “know is that a particular IP address has been involved in the downloading.” However, it appears that DtecNet, who will collect IP addresses for IRMA, has the capability to collect more information than just IP addresses. Whether such capabilites are to be used as part of the IRMA/eircom system is not known.

My suspicions were raised by eircom’s statement on their website that IRMA will send notifications to eircom “containing among other things the IP addresses of individuals”. Such suspicions could be unfounded; for example, IRMA might be sending eircom a list of shared files along with the IP addresses and that information might not be personal data.

However, the template letter reproduced by Adrian says:

Some of the details of the notification supplied by IRMA are set out below …

Is it not strange that eircom repeatedly notes that IRMA will be supplying them with more details than are apparently necessary for the purposes of the three strikes system.

What are those details?

Unfair advertising actions are not just for big business

[Updated 5/4/11 re. Cork Independent] What can a business do if a competitor engages in unfair advertising? The Competition Acts 2002 and 2006 deal with anti-competitive practices but these mostly involve cartel operations and abuse of dominance.

In the past, trade mark and passing off actions have been used to stop comparative advertising, but this had the unsatisfactory result of often blocking any form of comparative advertising, rather than just unfair comparative advertising. Most businesses are still very cautious when it comes to comparative advertising, but the trade mark problem was resolved somewhat by the ECJ decision in the O2 bubbles case: a competitor can use another’s trade mark once it does not confuse the public.

The European Communities (Misleading and Comparative Marketing Communications) Regulations 2007 updated Irish advertising law and supplement the unfair marketing provisions in the Consumer Protection Act 2007 and the non-statutory ASAI Code. A summary of the Regulations and available remedies is available here. The Regulations are not widely known among Irish SMEs, but that is changing fast.

Last year, Tesco sought an injunction under the Regulations against Dunnes Stores. The Irish Times reported:

Tesco had sought to stop Dunnes from running allegedly misleading price comparison advertisements in the run-up to the lucrative Christmas shopping spree. Tesco claimed Dunnes promotional advertisements made direct and unexplained comparisons with Tesco’s standard prices and misled customers by failing to compare like with like. Dunnes argued that its advertising campaign, in which it highlighted its lower prices, was incapable of misleading consumers.

Tesco failed to get an injunction because the High Court cannot grant a temporary injunction in this type of case (ironically, this is due to an earlier Supreme Court judgement in a case taken by Dunnes Stores). Miss Justice Laffoy’s decision does not mean that Tesco has lost or that Dunnes’ ads were not misleading: it only means that Tesco must pursue their complaint to trial of the full action.

Remedies under the Regulations can also be sought in the Circuit Court, where costs are lower. Recently, the Cork News took a case against rival paper the Cork Independent under the Regulations. As reported by the Phoenix (28(11) p.7 (11/06/10)):

THE freesheet Cork Independent was forced to admit in the Cork Circuit Court recently that it had been boasting false circulation figures to advertisers and was ordered by Judge Con Murphy to publish corrective figures. … The Cork Indo had been boasting circulation increases of 10,000 up to 65,000 in a series of full page adverts for the best part of two months up to January last. But the Cork News argued that the Cork Indo’s actual print run was only 43,000 for certain parts of the same period.

Judge Murphy ordered the Cork Indo to inform its advertisers via the newspaper of its real circulation figures last November and also ordered both papers to publish its current circulation figures.

[Update: There have been further developments in the dispute about circulation figures between the two newspapers, with the Cork Independent successfully defending a circulation challenge from the Cork News. The exact nature of the challenge is unknown.]

Tesco v. Dunnes Stores was an intensification of an existing battle between two enormous companies, but the Cork newspapers case suggests smaller Irish companies are now paying more attention to the legislative rules applicable to advertising, especially when it comes to advertising by competitors.

[Incidentally, an advertisement published by a solicitor can neither reflect unfavourably on other solicitors nor suggest specialist knowledge superior to other solicitors, which removes any real possibility of comparative advertising.]