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In the first place there are criminal sanctions for non-compliance. Ratio |
In the second place, the mere risk of forfeiture of the entirety of a donation might be thought a sufficient incentive to carry out the relatively simple check that a donor is on an electoral register. Ratio |
A party should not need much incentive to check that the position of anyone who wishes to make a donation is regularised. Ratio |
The suggestion that forfeiture of a sum limited to the impermissible donation can never be disproportionate is founded on the premise that the party should never have received the donation in the first place. Ratio |
But where a person within the United Kingdom wishes to make a donation to a party, there is nothing intrinsically wrong about the party receiving that donation. Ratio |
Of course the party and the donor should make sure that the donor complies with the statutory requirement of being placed on an electoral register. Ratio |
But if, by inadvertence, or even negligence, they fail to do so, it does not follow that it cannot be disproportionate for the donation to be forfeited. Ratio |
Proportionality will depend on the degree of culpability, the size of the donation and its importance to the party. Ratio |
I disagree that it is irrelevant whether or not the donor is a foreign donor. Ratio |
If he is, then forfeiture is clearly appropriate. Ratio |
Parliament has made electoral registration the test, but Parliament has also made forfeiture discretionary. Ratio |
To allow the party to show that the donor could have been registered to vote is not to introduce the Neill test by the back door. Ratio |
Parliaments scheme usefully transfers the burden of showing that the donation is not a foreign donation onto the donor and the party. Ratio |
If this burden can be discharged, the primary object of the legislation has not been defeated, and this fact is highly relevant to the issue of whether the power to forfeit should be exercised. Ratio |
The fact that Parliament has not made ignorance of the impermissibility of the donation a defence is no reason why it should not be a relevant extenuating circumstance when considering whether or not to forfeit the donation. Ratio |
Once again the Court of Appeal has ignored the fact that Parliament has chosen to make forfeiture of the donation discretionary. Ratio |
The argument that the effect of forfeiture on a party is irrelevant turns on the proposition that the party should never have had the donation in the first place. Ratio |
This ignores the fact that where the impermissibility of the donation results simply from an inadvertent, or even negligent, failure to register there is nothing intrinsically undesirable about the source of the funding. Ratio |
Finally I must deal with the point that, if there is a general discretion whether or not to forfeit, forfeiture proceedings will involve a lengthy investigation of all the material circumstances. Ratio |
In the first place, this will not normally be true where the donor is, in fact a foreign donor. Ratio |
The party will not be in a position to show that the donor was entitled to be placed on an electoral register. Ratio |
If, where this is the case, forfeiture is virtually automatic, forfeiture proceedings are unlikely to be protracted in those cases where forfeiture is most readily justified. Ratio |
Where, however, the donor is not a foreign donor, the fact that forfeiture is discretionary is likely to involve a significant investigation of the facts, whether the discretion is broad or narrow. Ratio |
However narrow the discretion it will surely be necessary for the party or the donor to show that the donor was not a foreign donor and to demonstrate, insofar as steps were taken to comply with the statutory requirements, what was in fact done. Ratio |
None of these arguments persuades me that where the donor is not foreign, but has for some reason failed to exercise his right to be placed on an electoral register, Parliament intended that forfeiture of the entire donation should be virtually automatic. Ratio |
On the contrary, where the donor is shown not to be foreign, I consider that Parliament would have intended, by conferring a discretion whether or not to forfeit, that there would be a careful evaluation of all the circumstances in order to decide whether the draconian step of forfeiture was justified. Ratio |
The Commissions approach to its discretion Ratio |
My conclusions receive some, if modest, support from the Commissions own approach to the exercise of its discretion. Ratio |
If Parliament had intended that a donation from an impermissible source should be forfeited unless there were exceptional circumstances, the Commission might have been expected automatically to make an application for forfeiture once satisfied that a donation was from an impermissible source. Ratio |
There would seem to be no basis upon which the Commission could properly decide not to make an application in circumstances where Parliament intended that forfeiture should occur. Ratio |
In the course of the hearing the Commission provided the Court with internal guidelines drawn up by the Commission in February 2007 in relation to the forfeiture of impermissible donations. Ratio |
These included the following: 3.1 . . . Ratio |
In all cases where the Commission is clear that section 58 applies the Commission will apply for a forfeiture order, unless there are reasons to conclude that on balance, the public interest is such that would lead us to exercise our discretion in favour of not seeking forfeiture. Ratio |
3.2 The Commission will have regard to all relevant considerations, which may include: Steps taken by the regulated organisation or individual for the verification of permissibility Steps taken by the regulated organisation or individual in relation to acceptance or return of donations Any other extenuating circumstanc... |
These guidelines do not suggest that the Commission itself applies a strong presumption in favour of forfeiture where a party has accepted a donation from an impermissible source. Ratio |
Conclusions RPC |
Where it is shown that a political party has accepted a donation from an impermissible source, there should be an initial presumption in favour of forfeiting the donation. Ratio |
In order to prevent parties receiving funding from individuals who have insufficient connection with the United Kingdom, Parliament has chosen to lay down a simple test. Ratio |
Donations must only be accepted from those who are on an electoral register. Ratio |
The onus should be on the party concerned to show why a donation that has been received from an impermissible source should not be forfeited. Ratio |
A first step in discharging this onus will normally be to show that the mischief against which the relevant part of the Act is directed did not occur that the donation in question was not, in fact, a foreign donation. Ratio |
Where an individual is concerned this should require demonstration that the individual was entitled to be entered on an electoral register. Ratio |
If this cannot be demonstrated, forfeiture should normally follow. Ratio |
In such circumstances it can properly be assumed that retention of the funding would defeat the policy underlying the legislation. Ratio |
If it is shown that the donor was in a position to qualify as a permissible donor by registering on an electoral register, the initial presumption in favour of forfeiture will have been rebutted. Ratio |
The question will then be whether there have been failures to comply with those requirements of the Act that are designed to ensure that such donations are not accepted, and the nature of those failures. Ratio |
Once again the onus will be on the party to explain how it was that the donation came to be accepted. Ratio |
If the donation is large, and if the power to forfeit is an all or nothing power, significant shortcomings are likely to be required to make forfeiture of the donation a proportionate response. Ratio |
It is in the light of that conclusion that I turn to consider whether the power to forfeit is all or nothing. Ratio |
Is the power to forfeit all or nothing? Ratio |
Both Walker J and the Court of Appeal concluded that the power to forfeit was an all or nothing power. Ratio |
Walker J concluded that this was the only meaning that could properly be given to a power to forfeit an amount equal to the value of the donation (para 117). Ratio |
This finding was not challenged in the Court of Appeal and was accepted by Sir Paul Kennedy as correct (para 49). Ratio |
My initial inclination was to agree. Ratio |
The language of section 58(2) suggests that there is only one amount that can be forfeited. Ratio |
Furthermore, forfeiture normally relates to a specific fund, or right, not part of one. Ratio |
But in this case, forfeit is used in an unusual way. Ratio |
It was the Neill Committee that first used the word, in recommending that a sum not less than the donation should be liable to forfeiture from the partys funds. Ratio |
It has been common ground that a forfeiture order will create a debt to be met from UKIPs funds, as and when monies are paid into them. Ratio |
So the forfeiture in this case is more akin to a fine. Ratio |
Furthermore, the Neill Committee contemplated that the amount to be forfeited would be variable when commenting that where the receipt was innocent or inadvertent the courts would clearly take into account the degree of culpability in setting the level of forfeiture. Ratio |
Having regard to these considerations I have reached the conclusion that the better interpretation is to treat the power to order forfeiture of an amount equal to the value of an impermissible donation as implicitly including the power to order forfeiture of a lesser sum. Ratio |
Such an interpretation is desirable to cope with the situation where the magistrates court is persuaded that the donor is not foreign. Ratio |
In those circumstances, total forfeiture of the donation may be disproportionate. Ratio |
If so, it should not be ordered, both under the ordinary principles that apply to the imposition of sanctions and having regard to the requirements of article 1 of the First Protocol to the European Convention on Human Rights. Ratio |
The magistrates court should have the power to make a partial forfeiture order that reflects the facts of the particular case. Ratio |
I would interpret section 58(2) as conferring that power. Ratio |
Disposal Ratio |
Walker J rightly held that the reasons given by the Senior District Judge were too brief. Ratio |
He reached, however, decisions on the issues of principle which this Court has endorsed. Ratio |
He concluded that, in circumstances where the donor was entitled to be on the electoral register, no presumption of total forfeiture should be applied, but forfeiture should reflect fault on the part of the party accepting the donation or donations. Ratio |
As to the application of that principle to the facts of this case, he applied a very broad brush that effaced most of the detail of communications between the Commission and UKIP. Ratio |
He allowed UKIP to retain all donations up to the point at which they learned that Mr Bown was not on the electoral register, and ordered forfeiture of all donations from that moment until Mr Bown was again on the register. Ratio |
He erred however in stating that it was on 19 June 2005 that UKIP learned that Mr Bown was not on the register. Ratio |
In fact they did not learn this until 13 December 2005. Ratio |
On this erroneous basis he ordered forfeiture of donations totalling 14,481. Ratio |
The parties were anxious, if possible, to avoid a further hearing before the Senior District Judge. Ratio |
I have reached the conclusion that the amount of the forfeiture that was ordered adequately reflected the facts of this case and, accordingly, I would restore the order of the Senior District Judge. Ratio |
In the 1990s there was considerable public unease about the funding of political parties. Ratio |
The Committee on Standards in Public Life under the chairmanship of Lord Neill of Bladen QC looked into the matter and in 1998 they produced a report (Cm 4057) which contained many recommendations. Ratio |
In particular, they formulated a principle to the effect that those who live, work and carry on business in the United Kingdom should be the persons exclusively entitled to give financial support to the operation of the political process here (para 5.16). Ratio |
In order to create a workable system, they recommended that political parties should be able to receive donations from (1) people who are registered voters in the United Kingdom and (2) those who are eligible to be put on an electoral register in the United Kingdom (para 5.20). Ratio |
In due course the government issued a White Paper giving their considered response to the Neill Committees recommendations (Cm 4413). Ratio |
The government accepted the thrust of the committees recommendation on foreign donors, but they introduced a significant modification: only individuals who were registered voters should be permitted to make donations to political parties. Ratio |
As the White Paper explained in para 4.6, in a very real sense this was in the parties interest: checking whether a particular donor appeared on the electoral register would offer a test of acceptability that was both conclusive and simple for the parties to operate. Ratio |
It would be much less straightforward for parties to verify that a donor who did not appear on the register was nevertheless entitled to be registered. Ratio |
Of course, the downside was that the new test excluded more potential donors than the Neill Committee test: those who were eligible to be registered, but who were not registered. Ratio |
The White Paper pointed out, however, that, with the introduction of rolling registration, people in that position could readily apply to be registered and it would then be open to a political party to accept a donation from them. Ratio |
In practice, therefore, little is lost by the proposed departure from the Neill Committees recommendation. Ratio |
This was the scheme which was encapsulated in clause 50 of the draft Bill and was given effect in section 54 of the Political Parties, Elections and Referendums Act 2000 (the Act). Ratio |
So far as relevant, that section provides: (1) A donation received by a registered party must not be accepted by the party if (a) the person by whom the donation would be made is not, at the time of its receipt by the party, a permissible donor. Ratio |
(2) For the purposes of this Part the following are permissible donors (a) an individual registered in an electoral register. Ratio |
Nothing could be clearer than the language used by Parliament and nothing could be clearer than the intention behind the language: political parties were not to accept donations from any individual who was not registered in an electoral register. Ratio |
In particular, parties were not to accept donations from individuals who were entitled to be registered, but who were not on the register. Ratio |
That situation would be adequately catered for by the simple expedient of the individual concerned getting himself registered: the party could then accept a donation from him. Ratio |
Obviously, the Act envisages that, when they receive a donation, a political party must check the electoral register to ensure that the individual is registered. Ratio |
If, as a result of that check, it appears that he is not on the register, then he is not a permissible donor and the party must return the donation, or a payment of an equivalent amount, within thirty days: section 56(2)(a). Ratio |
The party must keep a record of the receipt of the donation and of its return within the thirty-day period. Ratio |
In addition, the party must include a report of the receipt and return of the impermissible donation in their donation report to the Electoral Commission for the relevant period: section 62(9). Ratio |
If they fail to do so, section 65(6) comes into play: Where the court is satisfied, on an application made by the Commission, that any failure to comply with any such requirements in relation to any donation to a registered party was attributable to an intention on the part of any person to conceal the existence or tru... |
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