Grimes and Punishment: The Electoral Commission, campaign expenditure and civil penalties
On 19 July 2019, His Honour Judge Dight gave judgment in the case of Darren Grimes v The Electoral Commission, an appeal against a £20,000 financial penalty imposed upon Mr Grimes by the Commission in relation to two offences related to campaign expenditure in the EU referendum.
In this article, we summarise the key findings in the case.
Mr Grimes was the founder of BeLeave, a pro-Brexit campaign group.
In advance of the EU referendum, the Electoral Commission produced a notification form by which prospective campaigners could notify the Commission of their intention to campaign, and become a “permitted participant”. The Commission has a duty to maintain a register of all notifications given to it (ss.105-107, Political Parties, Elections and Referendums Act 2009 “PPERA”).
To be a permitted participant, a campaigner or organisation that is not a registered party must have notified the Commission of its intention to campaign, and included certain information in the notification. It must also be an individual or a type of body listed in PPERA, and in BeLeave’s case, this meant it must qualify as an unincorporated association.
When Mr Grimes completed this form on 15 March 2016, he intended to register BeLeave as a permitted participant in the referendum. Under the heading “Details of the individual or organisation applying for registration... Name of individual or organisation”, he entered the word “BeLeave”. He also included the information necessary for an association to be included in the register. He did not, however, tick the box for unincorporated associations but, instead, ticked that for individuals.
The Commission interpreted the form as notification from Mr Grimes as an individual and included him on the register. It apparently did not notice the use of the name BeLeave as the relevant campaigner either at the point of registration or subsequently. On 22 March 2016, the Commission wrote to Mr Grimes informing him that he had been added to the register of permitted participants. This letter asked Mr Grimes to contact the Commission if there were any errors with the registration. Mr Grimes did not do so.
In July 2018, the Electoral Commission imposed a £20,000 penalty on Mr Grimes respect of two offences related to the reporting of campaign expenditure during the referendum.
(i) The first offence related to the amount of expenditure. Mr Grimes authorised referendum spending of approximately £675,000 by or on behalf of BeLeave. If BeLeave had been a permitted participant in the referendum, such spending would have fallen within the relevant £700,000 limit. However, the Commission determined that Mr Grimes, not BeLeave, was the permitted participant so that the spending limit for individuals – £10,000 – applied. Moreover, BeLeave could not have given valid notification in March 2016 because it had not been shown to be an unincorporated association at that point in time. As such, Mr Grimes had committed an offence under s.117(3), PPERA by incurring spending in excess of £10,000 on behalf of a body that was not a permitted participant in the referendum. The Commission imposed the maximum penalty of £20,000 in respect of this offence.
(ii) The second offence, under s.122(4)(b), PPERA, was that of delivering a return of the expenditure incurred during the campaign, which did not comply with the statutory requirement (s.120(2)) that it must contain all payments made by or on behalf of the permitted participant. Mr Grimes’ return was not confined to his own personal campaign spending but included BeLeave’s spending. The Commission concluded that the return was therefore not a statement of all payments made by the permitted participant (Mr Grimes), but a statement of his and another person’s spending. No separate penalty was imposed for this offence.
Mr Grimes appealed. He argued that BeLeave was entitled to be a permitted participant in the referendum, and that he had given proper notice to the Electoral Commission that BeLeave was the intended campaigner. BeLeave, and not Mr Grimes, was therefore the permitted participant. As a result, BeLeave’s spending limit was £700,000. Mr Grimes had filed an accurate return on behalf of BeLeave which showed its total expenditure, and the Electoral Commission was therefore not entitled to decide to the criminal standard that either offence had been committed.
The Court’s decision
Notification by whom?
Judge Dight considered that Mr Grimes had been confused about how to complete the notification form. This was not, however, “at all his fault because the form itself in my view was difficult to understand.”
Despite this, the form completed by Mr Grimes contained all the necessary details to constitute notification to the Electoral Commission of BeLeave’s intention to campaign. The Commission had gone wrong in failing to deal carefully with the notification. Moreover, its statutory obligation to maintain a register does not make the register conclusive in determining whether notification had been given or the content of the notification. The Commission could not rely on Mr Grimes’ failure to inform it of the error in his registration when given the opportunity to do so, because, like the error in the register, that failure did not alter the nature of the notification that he had, in fact, given.
The Judge rejected Mr Grimes’ argument that – like a returning officer – the Commission has no power to check the substance of a notification but only to determine whether it is correct on its face. He accepted that the Commission has power to ask whether, viewed objectively, the conditions for notification have been met (and to check proactively that a notification continues to do so) and to reject non-compliant notifications. In the present case, however, this did not assist the Commission because it had never rejected the notification nor removed it from the Register even after Mr Grimes had clarified that he had notified on behalf of BeLeave rather than personally.
BeLeave had therefore given the necessary notification of its intention to campaign and was the permitted participant.
Whether BeLeave was an unincorporated association
As to the Commission’s other argument, that BeLeave was not an unincorporated association at the date of the notification and so could not in any event have been the subject of a valid notification, the Commission had approached this issue of BeLeave’s status the wrong way round. To find that an offence had been committed, the Commission had to be satisfied beyond reasonable doubt that BeLeave was not an unincorporated association at the date of notification. Instead, however, the Commission had asked itself whether it could conclude that BeLeave was an unincorporated association. This effectively reversed the burden of proof, requiring Mr Grimes to prove his innocence.
As a result, the offence had not been made out and the appeal succeeded. BeLeave was a permitted participant in the referendum and was entitled to incur the reported expenditure of £675,000.
Whether Mr Grimes’ return complied with s.120(2)(a).
The judge gave short shrift to the Electoral Commission’s arguments on this point. Providing information as to additional expenses on the return was not a failure to “provide a statement of all the payments” as required by s.120.
What went wrong?
The Electoral Commission made a number of avoidable errors, and it is likely that the ligation could have been avoided had it not done so. In summary:
(i) it devised a notification form that was, at best, difficult to understand
(ii) it failed to look carefully enough at the information provided by Mr Grimes’ on his notification form to register BeLeave as a campaigner; and
(iii) it failed to ask the right questions when considering whether any criminal offence had been committed.
The Commission’s approach to setting the amount of the penalty was also the subject of some criticism by the Judge, who indicated that he would have been sympathetic to an argument for reducing it, had he needed to consider that issue, given that the conduct of Mr Grimes was not deliberate and the allegations not of the most serious kind.