Central Criminal Courts image
This site is based on Disciplinary and Regulatory Proceedings, 8th Edition
Disciplinary and Regulatory Proceedings is the leading work on this important and dynamic area of law. For 20 years it has provided authoritative guidance to lawyers, tribunals, and other experts dealing with professional discipline and regulation.

Regulatory and enforcement sanctions Act

1. The Regulatory Enforcement and Sanctions Act 2008 is designed to provide more consistent enforcement of regulations across local authorities, better co-ordination between local authorities and central government and more effective enforcement of regulations. It also obliges regulators to conform to certain headline principles. The Act, passed in response to the Hampton Report commissioned in the 2004 budget, has four parts :

(i) Part 1 re-establishes a Local Better Regulation Office (LBRO), already established in May 2007 as a government owned company, as a statutory corporation with statutory powers.

(ii) Part 2 establishes a Primary Authority scheme, whereby businesses which operate in more than one local authority area can choose to nominate one authority as the primary one for regulatory purposes.

(iii) Part 3 introduces four new civil penalties that regulatory authorities will be able to impose on businesses.

(iv) Part 4 imposes a duty on regulators to keep their regulatory activity under review and remove unnecessary burdens and to keep their regulatory activities to a necessary minimum.

Local Better Regulation
2. The Local Better Regulation Office (LBRO) has now statutory powers to promote better regulation and consistency within local authority regulatory services. It can issue guidance and ensure compliance with that guidance by the local authorities and encourage best practice and consistency amongst regulators. Guidance will be authoritative and compliance is mandatory, requiring local authorities to have regard to any enforcement priorities published by the LBRO. Examples of national enforcement priorities include alcohol and entertainment licensing and its enforcement, food safety and fair trading.

Primary authority
3. A “primary authority” is a local authority registered by the LBRO as having a responsibility for a particular business or organisation. This may relate to single functions such as trading standards, licensing and health and safety. The primary authority is responsible for giving advice to the relevant organisations that are subject to its regulatory enforcement and other local authorities on how they exercise enforcement procedures. The aim is to encourage consistency within regulatory enforcement amongst large business concerns who are regulated by numerous local authorities. The HSE will liaise with the LBRO to offer guidance as well. The objective is that businesses and local authorities will work closely together with other local authorities to ensure compliance in a spirit of consistency, co-ordination and compliance by the creation of inspection plans and a duty to consult primary authorities before enforcement action.

Regulatory sanctions
4. Civil sanctions will be available to regulators as a more effective and flexible alternative to formal prosecutions under the Act, as follows: Fixed Money Penalties (FMP), a fixed penalty enforceable through the civil courts as an outstanding debt if the debt is not satisfied within a specific period of time.

Discretionary requirements
5. Having given notice to the potential defendant, regulators are entitled to impose one or more of the following:

(a) Variable Monetary Penalties (VMP) to be determined by the regulator in order to remove any financial gain from the offender. The Compliance Notice, a direction to take specified steps within a stated period of time to ensure that the offence does not reoccur (e.g. making unsafe food healthy, unsafe equipment). The Restoration Notice, a direction to take specified steps within a stated period to ensure the position is restored to its original state had no offence been committed (e.g. reimbursing a customer’s money).

Stop Notice
6. This is a direction to cease carrying on activity in order to reduce or eliminate the risk of harm to human health, the environment, consumers financial interests or the commissioner of an offence.

Enforcement undertakings
7. These undertaking give a business having been suspected of committing an offence the ability to give relevant undertakings to ensure that corrective action is undertaken.

8. The powers flow to the relevant authority by the granting of those powers by a minister and the minister may also suspend or review such powers.

Appeals from decisions and sanctions
9. All of the new sanctions above are appealable to a first tier tribunal or other statutory tribunal established under the Tribunals, Courts and Enforcement Act 2007 by a tribunal judge sitting alone or with one or two members who have relevant experience in the regulatory field. The tribunal may withdraw, confirm or remit the decision back to the regulators to take such steps as are necessary. Businesses are also entitled to recover reasonable costs from the regulator for imposing discretionary requirements for stop notices. Either party may claim the costs incidental to the tribunal hearing.

10. Guidance will be an important feature of the relevant scheme and the policy underpinning it will also be subject to regular review.

11. Regulators will now be forced to keep their functions under review on an annual basis and will not impose unnecessary burdens and must remove such burdens if it is practical and proportionate to do so.

The aspiration of the Act
12. The aspiration of the Act is by the use of alternative penalties to encourage compliance rather than simply constructing another prosecutorial regime. Regulators by the use of administrative penalties and other sanctions will gradually decriminalise some aspects of regulatory misconduct which are currently the subject of criminal sanction, normally triable in the magistrates’ courts. The obligation of regulators to publish guidance and report on their activities on an annual basis will provide it is hoped more transparency and a significant reduction in criminal proceedings and prosecutions. It is hoped this approach will cause a significant cost reduction which currently burdens both local authorities and those who are regulated by them.

Conclusion
13. The extent to which it is appropriate for regulatory authorities rather than the courts to make determinations as to whether a person has committed what has hitherto been a criminal offence and to impose potentially unlimited financial penalties is debatable. It will be some time before one can reasonably draw any firm conclusions as to whether the appropriate standards of procedural fairness are being maintained in accordance with those already in existence for criminal prosecutions.
14. Because as presently envisaged the scheme only extends to England and Wales, Scotland falls outwith this regime and therefore there will be inconsistent arrangements within the UK.
15. There are also some concerns over whether these arrangements merely add to the burden of large statutory regulators who already have very well developed systems (e.g. Food Standards Agency, HSE), simply adding another layer of statutory control merely complicates matters rather than meeting the government’s aspirations to reduce the costs of regulation and to rationalise the inspection and enforcement processes.
16. Whilst the magistrates’ courts will be less burdened now by technical criminal prosecutions within the regulatory ambit, there are likely to be many uncertainties along the way in the implementation of this Act if the burdens fall on individual local authorities to formulate their own arrangements and operated in a consistent and coherent fashion.

 

Articles »