A compensation order is a financial penalty on a convicted person, the proceeds of which are paid to the victim of crime. This is in order to compensate them for “personal injury, loss or damage caused directly or indirectly; or alarm or distress caused directly” by the offence.
Compensation orders can be made instead of, or in addition to, most other sentences. They cannot be made, however, alongside an absolute discharge, a Community Payback Order (although CPOs can contain a “compensation requirement” which for all intents and purposes is the same thing) or when the court defers sentence (although they can then be made when the case comes to be disposed of for good).
Where a court is considering a fine and a compensation order for an offence, but knows that the accused has “insufficient means to pay both”, the court should prefer a compensation order. Where a convicted person is subject to both, their payments will be applied to satisfy the compensation order first.
In cases of property damage, compensation orders can sometimes be far more expensive for the accused than any accompanying fine. For example, if somebody is convicted of smashing the complainer’s brand new iPhone, they might be fined £100 for the act, and £1000 to compensate the complainer for the cost of the iPhone. In light of this, it is important to ensure that the Crown has obtained some sort of vouching for the value of the item for which compensation is likely to be ordered.
Whether the owner of the property is insured or not is irrelevant to the question of whether compensation is appropriate.
Compensation orders can only be made in respect of convictions involving vehicles if the convicted person’s vehicle was uninsured, and “no compensation is payable under arrangements to which the Secretary of State is a party” (which presumably means claims to the Motor Insurers Bureau).
There are no strong guidelines or rules as to how long it should take for a convicted person to pay compensation by instalments, but excessive periods of time may be worth an appeal. In the case of Downie v HMA [1999 SCCR 375], the High Court held that a compensation order of over £11,000 in favour of the Benefits Agency (who had alternative means of recovery in any event) should be quashed, since it would take the convicted person over eighteen years to fulfil the order at the rate of £50 a month.
Compensation orders are collected and enforced in the same way that fines are. They are not paid directly by the convicted person to the victim.
Compensation orders can be reviewed by a court at any time before it has been fully paid. On the application of the convicted person, it can be reduced or discharged if it appears that “property the loss of which is reflected in the compensation order has been recovered.” On the application of the prosecutor, the amount can be increased if it has become clear that the convicted person has “more means” than they did at the time when the order was made.