Regulatory Enforcement and Sanctions Bill [HL]

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Regulatory Enforcement and Sanctions Bill [HL]

Regulatory Enforcement and Sanctions Bill [HL]
Part 3 — Civil sanctions
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(b)
that the decision was wrong in law;
(c)
that the decision was unfair or unreasonable for any reason (including,
in a case where the amount of the non-compliance penalty was
determined by the regulator, that the amount is unreasonable).
Stop notices
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45
Stop notices
(1)
The provision which may be made under this section is provision conferring
on a regulator the power to serve a stop notice on a person.
(2)
For the purposes of this Part a “stop notice” is a notice prohibiting a person
from carrying on an activity specified in the notice until the person has taken
10
the steps specified in the notice.
(3)
Provision under this section may only confer such a power in relation to a case
falling within subsection (4) or (5).
(4)
A case falling within this subsection is a case where—
(a)
the person is carrying on the activity,
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(b)
the regulator reasonably believes that the activity as carried on by that
person is causing, or presents a significant risk of causing, serious harm
to any of the matters referred to in subsection (6), and
(c)
the regulator reasonably believes that the activity as carried on by that
person involves or is likely to involve the commission of a relevant
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offence by that person.
(5)
A case falling within this subsection is a case where the regulator reasonably
believes that—
(a)
the person is likely to carry on the activity,
(b)
the activity as likely to be carried on by that person will cause, or will
25
present a significant risk of causing, serious harm to any of the matters
referred to in subsection (6), and
(c)
the activity as likely to be carried on by that person will involve or will
be likely to involve the commission of a relevant offence by that person.
(6)
The matters referred to in subsections (4)(b) and (5)(b) are—
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(a)
human health,
(b)
the environment (including the health of animals and plants), and
(c)
the financial interests of consumers.
(7)
The steps referred to in subsection (2) must be steps to remove or reduce the
harm or risk of harm referred to in subsection (4)(b) or (5)(b).
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46
Stop notices: procedure
(1)
Provision under section 45 must secure the results in subsection (2) in a case
where a stop notice is served.
(2)
Those results are that—
(a)
the stop notice must comply with subsection (3),
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(b)
the person on whom it is served may appeal against the decision to
serve it,

Regulatory Enforcement and Sanctions Bill [HL]
Part 3 — Civil sanctions
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(c)
where, after service of the notice, the regulator is satisfied that the
person has taken the steps specified in the notice, the regulator must
issue a certificate to that effect (a “completion certificate”),
(d)
the notice ceases to have effect on the issue of a completion certificate,
(e)
the person on whom the notice is served may at any time apply for a
5
completion certificate,
(f)
the regulator must make a decision as to whether to issue a completion
certificate within 14 days of such an application, and
(g)
the person on whom the notice is served may appeal against a decision
not to issue a completion certificate.
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(3)
To comply with this subsection a stop notice must include information as to—
(a)
the grounds for serving the notice,
(b)
rights of appeal, and
(c)
the consequences of non-compliance.
(4)
Provision pursuant to subsection (2)(b) must secure that the grounds on which
15
a person may appeal against a decision of the regulator to serve a stop notice
include the following—
(a)
that the decision was based on an error of fact;
(b)
that the decision was wrong in law;
(c)
that the decision was unreasonable;
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(d)
that any step specified in the notice is unreasonable;
(e)
that the person has not committed the relevant offence and would not
have committed it had the stop notice not been served;
(f)
that the person would not, by reason of any defence, have been liable
to be convicted of the relevant offence had the stop notice not been
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served.
(5)
Provision pursuant to subsection (2)(g) must secure that the grounds on which
a person may appeal against a decision of the regulator not to issue a
completion certificate include the following—
(a)
that the decision was based on an error of fact;
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(b)
that the decision was wrong in law;
(c)
that the decision was unfair or unreasonable.
47
Stop notices: compensation
(1)
Provision under section 45 conferring power on a regulator to serve a stop
notice on a person must include provision for the regulator to compensate the
35
person for loss suffered as the result of the service of the notice.
(2)
Provision under subsection (1) may provide for compensation—
(a)
only in prescribed cases;
(b)
only in relation to prescribed descriptions of loss.
(3)
Provision under subsection (1) must secure that the person on whom the stop
40
notice is served is able to appeal against—
(a)
a decision by the regulator not to award compensation, or
(b)
a decision of the regulator as to the amount of the compensation.

Regulatory Enforcement and Sanctions Bill [HL]
Part 3 — Civil sanctions
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Stop notices: enforcement
(1)
Provision under section 45 conferring power on a regulator to serve a stop
notice must provide that, where a person on whom a notice is served does not
comply with it, the person is guilty of an offence and liable—
(a)
on summary conviction, to a fine not exceeding £20,000, or
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imprisonment for term not exceeding twelve months, or both, or
(b)
on conviction on indictment, to imprisonment for a term not exceeding
two years, or a fine, or both.
(2)
In the application of this section—
(a)
in England and Wales, in relation to an offence committed before the
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commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44),
or
(b)
in Northern Ireland,

the reference in subsection (1)(a) to twelve months is to be read as a reference
to six months.
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Enforcement undertakings
49
Enforcement undertakings
(1)
The provision which may be made under this section is provision—
(a)
to enable a regulator to accept an enforcement undertaking from a
person in a case where the regulator has reasonable grounds to suspect
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that the person has committed a relevant offence, and
(b)
for the acceptance of the undertaking to have the consequences in
subsection (4).
(2)
For the purposes of this Part, an “enforcement undertaking” is an undertaking
to take such action as may be specified in the undertaking within such period
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as may be so specified.
(3)
The action specified in an enforcement undertaking must be—
(a)
action to secure that the offence does not continue or recur,
(b)
action to secure that the position is, so far as possible, restored to what
it would have been if the offence had not been committed,
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(c)
action (including the payment of a sum of money) to benefit any person
affected by the offence, or
(d)
action of a prescribed description.
(4)
The consequences in this subsection are that, unless the person from whom the
undertaking is accepted has failed to comply with the undertaking or any part
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of it—
(a)
that person may not at any time be convicted of the relevant offence in
respect of the act or omission to which the undertaking relates,
(b)
the regulator may not impose on that person any fixed monetary
penalty which it would otherwise have power to impose by virtue of
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section 38 in respect of that act or omission, and
(c)
the regulator may not impose on that person any discretionary
requirement which it would otherwise have power to impose by virtue
of section 41 in respect of that act or omission.
(5)
Provision under this section may in particular include provision—
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Regulatory Enforcement and Sanctions Bill [HL]
Part 3 — Civil sanctions
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(a)
as to the procedure for entering into an undertaking;
(b)
as to the terms of an undertaking;
(c)
as to publication of an undertaking by a regulator;
(d)
as to variation of an undertaking;
(e)
as to circumstances in which a person may be regarded as having
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complied with an undertaking;
(f)
as to monitoring by a regulator of compliance with an undertaking;
(g)
as to certification by a regulator that an undertaking has been complied
with;
(h)
for appeals against refusal to give such certification;
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(i)
in a case where a person has given inaccurate, misleading or
incomplete information in relation to the undertaking, for that person
to be regarded as not having complied with it;
(j)
in a case where a person has complied partly but not fully with an
undertaking, for that part-compliance to be taken into account in the
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imposition of any criminal or other sanction on the person;
(k)
for the purpose of enabling criminal proceedings to be instituted
against a person in respect of the relevant offence in the event of breach
of an undertaking or any part of it, to extend any period within which
those proceedings may be instituted.
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Orders under Part 3: supplementary provision
50
Combination of sanctions
(1)
Any provision under this Part which results in a regulator having power to
impose a fixed monetary penalty or a discretionary requirement in relation to
an offence must secure that the regulator may not impose both a fixed
25
monetary penalty and a discretionary requirement on the same person in
relation to the same case.
(2)
Any provision under this Part which results in a regulator having power to
impose a fixed monetary penalty or to serve a stop notice in relation to an
offence must secure that the regulator may not both impose a fixed monetary
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penalty and serve a stop notice on the same person in relation to the same case.
51
Monetary penalties
(1)
An order under this Part which confers power on a regulator to require a
person to pay a fixed monetary penalty, a variable monetary penalty or a non-
compliance penalty under section 44(1) may include provision—
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(a)
for early payment discounts;
(b)
for the payment of interest or other financial penalties for late payment
of the penalty, such interest or other financial penalties not in total to
exceed the amount of that penalty;
(c)
for enforcement of the penalty.
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(2)
Provision under subsection (1)(c) may include—
(a)
provision for the regulator to recover the penalty, and any interest or
other financial penalty for late payment, as a civil debt;

Regulatory Enforcement and Sanctions Bill [HL]
Part 3 — Civil sanctions
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(b)
provision for the penalty, and any interest or other financial penalty for
late payment to be recoverable, on the order of a court, as if payable
under a court order.
52
Costs recovery
(1)
Provision under section 41 may include provision for a regulator, by notice, to
5
require a person on whom a discretionary requirement is imposed to pay the
costs incurred by the regulator in relation to the imposition of the discretionary
requirement up to the time of its imposition.
(2)
Provision under section 45 may include provision for a regulator, by notice, to
require a person on whom a stop notice is served to pay the costs incurred by
10
the regulator in relation to the service of the notice up to the time of service.
(3)
In subsections (1) and (2), the references to costs include in particular—
(a)
investigation costs;
(b)
administration costs;
(c)
costs of obtaining expert advice (including legal advice).
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(4)
Provision under this section must secure that, in any case where a notice
requiring payment of costs is served—
(a)
the notice specifies the amount required to be paid;
(b)
the regulator may be required to provide a detailed breakdown of that
amount;
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(c)
the person required to pay costs is not liable to pay any costs shown by
the person to have been unnecessarily incurred;
(d)
the person required to pay costs may appeal against—
(i)
the decision of the regulator to impose the requirement to pay
costs;
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(ii)
the decision of the regulator as to the amount of those costs.
(5)
Provision under this section may include the provision referred to in section
51(1)(b) and (c) and (2).
(6)
Provision under this section must secure that regulator is required to publish
guidance about how it will exercise the power conferred by the provision.
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Appeals
(1)
An order under this Part may not provide for the making of an appeal other
than to—
(a)
the First-tier Tribunal, or
(b)
another tribunal created under an enactment.
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(2)
In subsection (1)(b) “tribunal” does not include an ordinary court of law.
(3)
An order under this Part which makes provision for an appeal in relation to the
imposition of any requirement or service of any notice may include—
(a)
provision suspending the requirement or notice pending
determination of the appeal;
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(b)
provision as to the powers of any person to whom the appeal is made;
(c)
provision as to how any sum payable in pursuance of a decision of that
person is to be recoverable.

Regulatory Enforcement and Sanctions Bill [HL]
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(4)
The provision referred to in subsection (3)(b) includes provision conferring on
the person to whom the appeal is made power—
(a)
to withdraw the requirement or notice;
(b)
to confirm the requirement or notice;
(c)
to take such steps as the regulator could take in relation to the act or
5
omission giving rise to the requirement or notice;
(d)
to remit the decision whether to confirm the requirement or notice, or
any matter relating to that decision, to the regulator;
(e)
to award costs.
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Other provision
10
(1)
An order under this Part may include consequential, supplementary,
incidental or transitional provision.
(2)
The consequential provision referred to in subsection (1) includes—
(a)
provision as to how any enactment passed or made before the day on
which this Act is passed applies or operates in relation to the imposition
15
of a fixed monetary penalty or discretionary requirement or service of
a stop notice, and
(b)
in particular, where such an enactment applies in relation to a person
convicted of a criminal offence, provision to make the enactment apply
in relation to a person on whom a fixed monetary penalty or
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discretionary requirement is imposed or a stop notice is served in
relation to that offence.
(3)
The supplementary provision referred to in subsection (1) includes provision
for the purpose of facilitating the use of powers conferred by an order under
this Part, and in particular provision which for that purpose—
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(a)
confers or extends powers to require information;
(b)
authorises the use of information in evidence which could not
otherwise lawfully so be used;
(c)
confers or extends powers of entry, search or seizure.
(4)
The provision which may be made by an order under this Part may be made
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by repealing, revoking or amending an enactment (whenever passed or made).
Orders under Part 3: exclusions
55
Excluded provision: Scotland
An order under this Part may not, except for consequential purposes, make any
provision which would be within the legislative competence of the Scottish
35
Parliament if it were contained in an Act of that Parliament.
56
Excluded provision: Northern Ireland
An order under this Part may not, except for consequential purposes, make any
provision which would be within the legislative competence of the Northern
Ireland Assembly if it were contained in an Act of that Assembly.
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