ANZ v R: Mandatory Means Inquiry & Restrictive Use of Compensation Orders in Criminal Sentencing

Introduction

ANZ v R ([2025] EWCA Crim 778) is a Court of Appeal (Criminal Division) decision that re-asserts, clarifies and develops the law governing compensation orders under the Sentencing Act 2020 (“SA 2020”). While the underlying offences involved grave sexual abuse and cruelty by a father against his daughter, the appeal centred exclusively on the lawfulness of a £10,000 compensation order imposed without proper inquiry into the offender’s means.

The appellant (pseudonym “ANZ”) had been sentenced in the Crown Court to 18 months’ imprisonment, suspended for two years, with a £10,000 compensation order payable at £400 per month. Leave to appeal was granted only in relation to that order. The Court of Appeal quashed the order, holding that the sentencing judge had breached the mandatory requirements of ss.133-135 SA 2020 and the principles in R v York [2018] EWCA Crim 2754. The judgment lays down fresh guidance on:

• the mandatory duty to make meaningful inquiries into an offender’s means before imposing compensation;
• the limited, “clear and straightforward” circumstances in which criminal courts should utilise compensation orders;
• the proper relationship between compensation orders, the Criminal Injuries Compensation Scheme (“CICS”), and suspended custodial sentences.

Summary of the Judgment

LJ Fraser (giving the judgment of the Court) held:

1. The sentencing judge made no real inquiry into ANZ’s financial means, contrary to s.135(3)(b) SA 2020. A brief assumption that the defendant “could get delivery work” is insufficient.
2. That failure rendered the compensation order unlawful. The order was therefore quashed.
3. The Court declined either to re-determine an appropriate amount or to remit the question to the Crown Court, emphasising that compensation orders should be reserved for “simple, straightforward” cases and noting the availability of the CICS.
4. The Court reaffirmed that ability (or perceived ability) to pay should never be used to justify suspending a custodial sentence; doing so would allow wealthier offenders to “buy themselves out of imprisonment”.

Analysis

1. Precedents Cited

• R v York [2018] EWCA Crim 2754
  Identified six core principles for compensation orders, including a positive duty to ascertain means and to ensure any order is realistic. Fraser LJ treated these principles as of general application, not confined to dog-bite or personal-injury cases.
• R v Inwood (1974) 60 Cr App R 70
  Established that compensation orders are not a device for offenders “to buy themselves out of the penalties for crime”; they exist to avoid civil litigation when the offender clearly has the means.
• R v Donovan (1981) 3 Cr App R (S) 192
  Held that compensation orders are intended only for “simple, straightforward” cases where loss is easily quantifiable.
• R v Stapylton [2012] EWCA Crim 728
  Reiterated the Donovan principle and warned courts against detailed civil-style inquiries.
• Pola v HSE [2009] EWCA Crim 655
  Demonstrated a rare instance where a high (£90k) order was upheld because the offender’s means and the victim’s inability to claim elsewhere were rigorously established.
• Horsham Justices, ex p Richards [1985] 1 WLR 986
  Authority that courts lack jurisdiction to make compensation where loss is disputed or unclear.

2. Legal Reasoning

The Court’s analysis proceeded in three stages:

1. Statutory framework (ss.133-139 SA 2020)
   • s.135(3)(b) uses the imperative “must” – courts are obliged to “have regard to the offender’s means”.
   • Failure to discharge this duty is an error of law, rendering any ensuing order unlawful.
2. Application of York principles
   None of the first four York requirements (disclosure, inquiry, findings, realism) were satisfied. A speculative assumption of employment prospects cannot stand in for actual means inquiry.
3. Discretion not to re-make the order
   Even though the appellant was “wholly unmeritorious”, the Court stressed systemic concerns:
   • A protracted, drip-feed repayment schedule (£20/week → 10 years) is contrary to York.
   • Compensation orders should not disadvantage victims by reducing awards under the CICS (“last resort” rule).
   • The abusive history created an ongoing “control” risk: long-term monthly payments could re-traumatise or tether the victim to the offender.
   Hence the Court chose to quash without replacement.

3. Impact of the Decision

• Sentencing Practice: Judges must now perform and record a concrete means assessment before compensation orders. A single open-ended question about employment will not suffice.
• Prosecution & Defence Duties: Counsel should be prepared to address means, especially where the Crown is not seeking compensation. Failure to do so can lead to unlawful orders and appeals.
• Victim Compensation Strategy: Where loss is complex or severe (e.g., long-term sexual abuse), practitioners should steer victims towards the CICS or civil proceedings rather than pressing for criminal compensation orders.
• Suspended Sentences: The Court’s explicit condemnation of “buy-out” suspensions sets a marker: ability to pay compensation cannot be a reason to suspend custody.
• Appeal Landscape: The judgment provides a clear template for challenging defective compensation orders; we can anticipate a rise in appeals where courts overlooked means.

Complex Concepts Simplified

• Compensation Order: A criminal-court order requiring the offender to pay money directly to the victim for injury, loss or damage caused by the crime. Different from a civil damages award.
• Means Inquiry: Assessment of the offender’s income, savings, assets and liabilities to determine ability to pay. Must be evidence-based and recorded.
• Criminal Injuries Compensation Scheme (CICS): State-funded scheme that compensates victims of violent crime when offenders cannot, or do not, pay. Any sums received from the offender are deducted from a CICS award.
• Slip Rule: Limited power for a Crown Court judge to correct accidental slips or omissions within 56 days (Criminal Procedure Rules, r.28.4). Cannot be used to cure substantive illegality.
• Suspended Sentence: Custodial sentence activated only if the offender commits a further offence or breaches requirements within the operational period.

Conclusion

ANZ v R stands as a robust restatement of the statutory and common-law safeguards surrounding compensation orders. It emphasises that:

1. Courts must obtain and consider reliable evidence of the offender’s means;
2. Compensation orders are suited only to simple, quantifiable losses;
3. The CICS or civil courts remain the appropriate venue for complex or high-value claims arising from serious offences;
4. Financial capacity can never justify suspending an otherwise immediate custodial sentence.

By quashing the order without substitution, the Court has sent a clear message: procedural shortcuts in sentencing, however well-intentioned, will not be tolerated where they jeopardise legality, victim welfare or sentencing consistency. Practitioners must adapt by ensuring full financial information is available, and by adopting a holistic approach to victim compensation that aligns with these newly sharpened principles.