Compensation orders in the magistrates' court

The compensation order

When a defendant is convicted of an offence, the Magistrates’ Court can make a compensation order when passing sentence. A compensation order is intended to make the defendant compensate the victim of the crime. Subject to the below, the court must make a compensation order wherever possible – even where the victim can claim compensation in the civil courts.

A compensation order can either be a sentence in its own right, or more commonly, ancillary to the sentence imposed. Compensation can be ordered if the defendant is sent to prison – but only if the defendant has the means to pay immediately. If the magistrates decide that no compensation is payable, they must state their reasons in open court.

What does compensation cover?

The court must consider making a compensation order where the offence resulted in personal injury, loss or damage. Personal injury includes psychological injury. In relation to property stolen, if the property is recovered but in a damaged condition, compensation can still be ordered regardless of whether or not the defendant was responsible for the damage. All that matters is that the damage was caused whilst the property was out of the owner’s control as a result of the theft.

What is excluded?

Compensation is not generally payable to the dependents of a victim who has died, except for funeral expenses.

Compensation will not be ordered where the injury, loss or damage resulted from a road traffic accident unless there is a conviction under the Theft Act 1968; or the offender is uninsured and the Motor Insurers’ Bureau (MIB) will not cover the loss. The MIB is funded by all UK insurance holders and compensates victims of uninsured drivers. Personal injury and damage are covered (except for the first £300 of a claim for damage).

Fixing the amount of compensation

It is for the prosecution to establish the value of loss and to produce up-to-date and detailed evidence in support. The offender may also make representations.

The prosecution’s evidence will often be in the form of a victim statement setting out, for instance, the price of the stolen or damages items (with a receipt), or detailing the nature and extent of any personal injuries sustained. The magistrates will follow formal guidelines to ascertain the appropriate amount of compensation to award for personal injuries – subject to a maximum of £5000 per charge.

However, the magistrates must balance the requirement to order compensation against the defendant’s ability to pay. Payments by instalments are common and magistrates’ guidance suggests that the amount ordered should be paid between a period of 13 and 52 weeks.

Varying a compensation order

The defendant can appeal a compensation order within 21 days. During this time, the order is enforceable and the defendant must make payments. However, if the appeal is successful any payments made by the defendant will be refunded.

The Magistrates’ Court can discharge or reduce the order in certain circumstances:

  • where a lesser amount has been awarded by a civil court;
  • where the defendant has a subsequent reduction in their finances which is likely to continue for some time so that they are unable to pay either the whole or part of the compensation;
  • where the property stolen is partly or fully recovered, and;
  • where a confiscation order has been made in the same set of proceedings and the defendant’s means are insufficient to comply with both orders.

Compensation and deprivation orders

The court can make a deprivation order in some cases, unless it will cause undue hardship to the offender. If it is satisfied that the defendant was in possession of, or in control of, property used or intended for the purposes of committing or facilitating the commission of any offence, then the court can deprive the defendant of this property.

For example, if the defendant used a car to commit a series of shoplifting offences then the court could make a deprivation order, and the proceeds of sale of the car can then be used to compensate the shop owners.

Compensation and confiscation orders

The Magistrates’ Court cannot currently make confiscation orders except in very limited circumstances. The prosecution must therefore apply to the Crown Court for the offender to be committed to the Crown Court for confiscation to be considered under the Proceeds of Crime Act.