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The way the Parole Board of England and Wales operates is to be reviewed to see whether it needs “fundamental” reform.
The government probe comes a year after the board caused an outcry by ruling so-called black-cab rapist John Worboys was safe to be freed.
One option would be for every parole hearing to be conducted like a court or tribunal, with a judge in charge.
The justice secretary has already announced new rights for victims to challenge violent offender releases.
David Gauke said the review would consider whether the Parole Board needed extra powers or if it should be “reconstituted”.
He said no “profound deficiencies” in the way the parole process worked had been identified since the High Court overturned the board’s decision to release Worboys, but improvements were needed.
The 246 members of the Parole Board make risk assessments and decisions on whether prisoners can be safely released or moved to an open jail. A judge or former judge is sometimes involved.
They deal with about 25,000 cases a year, and in 2016-17 about 80% of decisions were made by reviewing case papers, rather than at an oral hearing.
On Sunday, Mr Gauke said instead of having to go to court to contest Parole Board decisions, victims will be able to apply to the Ministry of Justice.
The new system will apply from this summer to the most serious offenders – those serving indeterminate sentences, such as life terms, and people jailed under imprisonment for public protection, or serving extended sentences.
The Ministry of Justice acknowledged limiting the type of sentences that can be challenged might not go as far as some people may have wished.
It also said it had considered opening up appeals to the wider public, but after a consultation decided only parties in the case should be involved.
But Mr Gauke said: “Taken together, these reforms will help ensure that the mistakes made in the John Worboys parole case would not happen again.
“We owe that to victims, and I am determined to rebuild society’s trust in this system.”
Other measures will see the Parole Board “clearly” set out how its members should assess wider allegations of offending made against a prisoner.
Worboys, 61, was convicted of 19 offences against 12 women in 2009 and ordered to serve at least eight years in jail.
The following year police said a number of women had come forward and that his alleged victims now numbered more than 100.