Monday, June 18, 2018

Guest Post: Day Fines: Re-shaping India’s Broken Criminal Justice System

The Proof of Guilt is happy to have a guest post by Mr. Nishant Gokhale, a recent LLM graduate of the Harvard Law School

By most accounts, India’s criminal process is broken. Criminal courts are plagued by issues of delay and pendency, highly inconsistent legal representation, and outcomes which often result in longwinded appeals and revisions. While attention is focused on some of these issues sporadically, little is discussed or known about the system’s financial health. This post sheds some more light on this aspect, providing a brief background into how the court system is financed, before moving to discuss the concept of “day fines” as an additional tool to help the system run better. 

Who pays for our courts? 
Currently, states contribute at varying levels with the central government investing a majority of funds every year in the budget. It might not surprise you to learn that the judicial budget accounts for little more than 1% of India’s GDP, with much of it being spent on salaries of the judiciary and staff. Budgeting practises have been criticised for being formulaic, and for providing only incremental increases from past outlays, which leave little or no room for developing capacity or implementing new programs. The few other times that judicial budgets are spoken of, it has been in context of the ease of doing business, which does not take into account the chronic underfunding of criminal courts. While the Supreme Court in a 2012 Report had indicated that the financial burdens of operating courts should be shared between the centre and states equally, it remains an open debate. Chronic underfunding undermines nearly every action of the judiciary, and it is urgently necessary to examine new solutions to old problems. 

Fines in India 
One often overlooked approach involves “fines”. Every criminal court in the country has the power to impose a fine, where provided by law, once guilt has been proven or admitted by the offender. Fines have been around since at least 1100 AD in Europe and developed to reduce the dependence on private vengeance to punish criminality. 

How fines in India work in actuality remains a matter of conjecture as no information exists about it. Going by the Indian Penal Code, 1860 (“IPC”) alone, fines are capped at meagre amounts. While one problem is that fine amounts have not been revised to correspond with changing times, that is only the tip of the iceberg. Courts have the unenviable task of dealing with offenders across a wide spectrum of socio-economic means. For economically weak offenders, a higher fine amount would mean a substantial burden or even diverting expenses from basic necessities such as basic nutrition and health. For wealthy offenders, the low fine amounts constitute little more than a slap on the wrist. Increasing the fine amounts marginally would do little. This may explain why there has been little done to revise the monetary values of fines in the IPC which has resulted in this unhappy average. An alternative that some parts of the world have experimented with to deal with this problem is the concept of “day fines”, to which I turn to next. 

What are Day Fines? 
Day fines are a monetary criminal penalty imposed using a two-step procedure which take into account severity of the offence and the offender’s means. The first step involves assigning “day units” to a particular offence. Day units are determined based on how severe the criminal law considers a particular offence. Criminal law routinely grades offences based on severity. For example, rash driving resulting in the loss of life is considered more severe than drunken driving resulting in no actual harm to life or property. Day-unit determinations are divorced from the means available to the defendant. Means are considered in the second step called “day-value” determination. The day-value is determined after accounting for their assets, and liabilities and setting aside a reasonable allowance for their dependants and essential expenses such as nutrition and healthcare. 

The actual amount of day fine is a determined by multiplying day-units and day-value. So while the day-units for an offence of rash driving resulting in loss of life would be the same for rich and poor defendants (say for example 200 day units), the actual amount payable as fine would depend on the means available to the defendant. Using day fines would therefore result in the same relative burden on all offenders. 

Where are day fines used? 

Finland adopted a day fine system in 1921 following post-war fluctuations in the value of its currency. Today, around 60% of sanctions imposed by the Finnish criminal justice system uses day fines. Day units can vary between 1 to 120 units but can extend to 240 units for multiple offences. Germany (then West Germany) adopted day fines in the 1970s and continues to have one of the most nuanced system of day fines today. An estimated 82% of all offences in Germany are dealt with using day fines. In 2010, 94.5% of traffic offences, 86.8% of those sentenced to fraud and embezzlement, 73.3% of property crime offences attracted a day fine. Day units vary between 5 to 360 but day values have been capped between €1 to €30,000. Only 5% of the total number of cases in Germany resulted in actual imprisonment. 

Nearly all countries who had adopted this system continue to follow it till today and this has dramatically reduced incarceration rates. Notably however, the United Kingdom introduced “unit-fines” in 1991 only to repeal them in 1993. Partly responsible for the repeal were magistrates who felt that the system did not account for habitual offenders and public sentiment which felt that the middle class faced a heavy burden of fines while the poor got off lightly. Australia and Canada have unsuccessfully tried to introduce legislation to bring in day fines with a view to reduce incarceration rates. The United States abandoned day fines after some pilot projects as the system was found to be complicated and perhaps would also face resistance from vested interests such as private prison corporations. Some countries like the Netherlands, Norway, Italy, and Iceland have also steadfastly refused to implement day fines and continue with ordinary fines. Their preferred tools are suspended sentences and community service instead of incarceration. 

Implementing Day Fines in India 
Day fines are a concept to which little thought has been given in India. Undeniably, prisons are overcrowded and disproportionately represent religious minorities and socio-economically vulnerable castes and tribal groups. It is however unclear how much of this is due to fines. The IPC provides some safeguards on imposing fines such as monetary caps on fines for some offences and stringent limits for imprisonment for non-payment of fines. Where no upper monetary caps are specified, the IPC does not gives courts discretion to impose fines which are “unlimited” but not “excessive”. While specific fine amounts would require to be done away with in the text of the IPC, several underlying actions would need to be done before pressing day fines into service. 

Firstly, it would need to be clarified that offenders committing the same offences can be charged different amounts. The day units would be the same based on the offence, but what would vary is the day value. Individualised sentencing is a value that the courts recognise in Indian criminal law. For the determinants of day value, some guidance can be taken from the affidavits of income required by the Delhi High Court in matrimonial cases, in motor vehicle accident cases and also mitigating circumstances used in death penalty cases. It would also be important to gradually expand the use of day fines to cases involving corporations as they may require rules and factors other than those applicable to natural persons. In the event that offenders refuse to submit information, contempt of court proceedings can be ordered or the court itself can make an estimation. For determining day-units, a clear severity based grading of offences requires to be done at the legislative level, either by central or state governments. 

Secondly, it must be remembered that day fines are only a means to use criminal justice tools more efficiently and partly subsidise costs, not a way to entirely fund the system. Day fines operate only after guilt-determination and not as a means to ensure compliance with court orders. The United States has shifted the burden of criminal justice debt in the form of penal fines and costs as well as administrative surcharges, user fees, even charges for transport from court to prison to defendants. This was done to provide a “painless” way to protect the tax-payer while also modernising the criminal justice system. It has resulted in untold hardship with indigent defendants being trapped in the criminal justice system’s endless cycle of being incarcerated for failure to pay thereby further impairing their ability to earn pay off the debt. The existence of social security, state healthcare and employment guarantee programs used in Finland and some other countries have generally been found to be more useful in crime-reduction than day fines itself. Therefore effective social welfare programs need to be rolled out along with modifying the system of fines. 

Lastly, given that this is a system which is different from the measures adopted thus far, it would be useful to try using it on a pilot basis. Judges, court staff and parties in the criminal system would need to be familiar with it so that it is not overwhelm them or get misapplied. It could initially be limited to a few courts (geographically) or types of offences (traffic offences or offences punishable by 1 year or less of imprisonment). It is important to safeguard against the possibility that defendants plead guilty to offences for which day fines only to expeditiously conclude criminal proceedings. 

While several substantive, comparative and procedural law issues need to be ironed out before day fines are implemented in India, it may rejuvenate the largely dormant provisions related to fines and help in bringing about meaningful criminal justice reform. 

(During his LL.M., Nishant worked with the Criminal Justice Policy Program at Harvard Law School on the issues of criminal justice debt in the United States, including on day fines. The views expressed in this post are personal and do not represent the views of the Criminal Justice Policy Program or Harvard Law School) 

Useful References (on file with the author): 
  • Elena Kantorowicz-Reznichenko, "Day Fines: Should the Rich Pay More?", 11 Rev. Law Econ., No. 3, pg. 481–501 (2015) 
  • Sally T. Hillsman; Judith A. Greene, "Tailoring Criminal Fines to the Financial Means of the Offender", 72 Judicature 38, (1988). 
  • Joe Pinsker, Finland, "Home of the $103,000 Speeding Ticket", The Atlantic (12th Mar. 2015), available at https://www.theatlantic.com/business/archive/2015/03/finland-home-of-the-103000-speeding-ticket/387484/ (last visited 17th Jun. 2018). 
  • Hans-Jorg Albrecht, "Countries in Transition: Effects of Political, Social and Economic Change on Crime and Criminal Justice - Sanctions and their Implementation Special Issue on the 21st Criminological Research Conference", 7 Eur. J. Crime Crim. L. & Crim Just. 448 (1999).
  • Tapio Lappi-Seppala, "Criminology, Crime and Criminal Justice in Finland", 9 Eur. J. Criminology 206 (2012).

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