This bill is part of the Government's response to the Hampton and MaCrory reviews and contains a number of new provisions, including the strengthening of powers of the Local Better Regulation Office, which works across central and local government. Part 3 of the bill, which will apply throughout the UK, contains a new framework that will allow Ministers to endow regulators with additional penalty powers.
The regulators that may be given additional powers under this piece of legislation include those listed in a schedule to the bill and range from the Information Commissioner, the OFT, the Environment Agency to the Charity Commission. Additionally, bodies (such as local authorities) that have enforcement powers under one of the listed statutes, examples of which include the Water Industry Act 1991, the Consumer Credit Act 1974 and the Fisheries Act 1981, will be covered by this new legislation. The bill therefore has the potential to affect a large number of economic, environmental and consumer protection regulators as well as local authorities. The powers would be granted via a statutory instrument made by the relevant Minister and affirmed by parliament (with the consent of the Scottish Ministers where necessary).
The bill provides for four different types of additional powers to be granted:
- Fixed monetary penalties – These powers would allow the regulator to impose a fixed financial penalty in lieu of a criminal prosecution for breach of a regulatory obligation. In such cases the regulator would have to be satisfied beyond reasonable doubt that a particular obligation had been breached.
- Discretionary penalties - If a regulator were granted discretionary penalty powers then it would be able to (i) impose a discretionary monetary penalty; (ii) issue compliance notices that would require a specific action be taken (or not taken) in order to bring the regulated person back into compliance with the relevant rules; and (iii) issue restoration notices that would require the regulated person to take specific action in order to correct wrong done by their non-compliance. Again, in order to impose a financial penalty under these powers, a regulator would have to be satisfied beyond reasonable doubt that a contravention had occurred and imposition of a fine would be in lieu of criminal prosecution.
- Stop notices – Similar to compliance notices, stop notices would impose a specific requirement on a regulated person to bring a contravention to an end. For example, a stop notice may require a regulated person to stop using faulty equipment. If a stop notice was imposed and the regulated person didn't desist the contravention it would be committing a criminal offence and could potentially face a jail sentence.
- Enforcement undertakings – If a regulator were given powers under this heading, then it would only be able to accept undertakings offered by the regulated person, it would have no power to propose or request undertakings itself. If the regulator accepts an enforcement undertaking proposed by a regulated person then, so long as that person continues to observe the terms of the undertaking, they can't be prosecuted for the contravention or have a fixed or discretionary penalty imposed on them. This is therefore likely to provide a useful tool for regulated persons looking to manage the consequences of their non-compliance.
If a regulator is granted to the power to engage in any of these four methods of securing and correcting compliance, it will have to publish general guidance on how it will use those powers. Additionally, the regulator would have to publish 'enforcement guidance' that would set out the sanctions that it might impose for specific offences.