One in three offenders given an out-of-court disposal such as a caution, warning or penalty notice for disorder should have received a tougher punishment because their offending was "too frequent or serious", a report has found.
The use of out-of-court disposals risks undermining public confidence in the justice system as there are "wide variations" in how each one of the 43 forces in England and Wales deal with criminals.
The punishments have evolved "in a piecemeal and largely uncontrolled way" and it is time for a national strategy to bring greater consistency in their use, the inspectors said.
The joint report by Her Majesty's Inspectorate of Constabulary (HMIC) and Her Majesty's Crown Prosecution Service Inspectorate (HMCPSI) found that 64 of 190 out-of-court disposals reviewed "did not appear to comply with the standards set out in the available guidance".
This compared with just one of 50 cases which involved a charge.
One offender who stole £5,000 from his employer escaped with a caution while another, who had a string of previous convictions, was given a caution for criminal damage caused during a repeat domestic abuse incident, the report said.
"In one force, a 22-year-old woman had been issued with a reprimand for shoplifting in 2004, a final warning for shoplifting in 2005, a caution for assault on police in February 2008, a caution for shoplifting in August 2008, a PND (Penalty Notice for Disorder) for shoplifting in August 2008, and a third caution in October 2008 for criminal damage. Clearly a prolific offender, she had never been before a court."
The inspectors' report also found that in Gwent, half (49%) of all offences solved by police in 2009 were dealt with outside of the court system.
This dropped to one in four (26%) in West Yorkshire, while the average across England and Wales was one in three (38%).
"There is nothing more likely to diminish public confidence in the criminal justice system in its widest sense than a sense of unfairness," the inspectors said.