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Session 2007 - 08 Publications on the internet General Committee Debates Regulatory Enforcement and Sanctions |
Regulatory Enforcement and Sanctions Bill [Lords] |
The Committee consisted of the following Members:Celia Blacklock, Chris Shaw,
Committee Clerks attended
the Committee Public Bill CommitteeThursday 19 June 2008(Morning)[Mr. Christopher Chope in the Chair]Regulatory Enforcement and Sanctions Bill [Lords]Further written evidence to be reported to the HouseRESB
02 National Consumer
Council 9
am Clause 46Stop
notices Question
proposed, That the clause stand part of the
Bill.
The
Minister for Employment Relations and Postal Affairs (Mr.
Pat McFadden): We have made fairly brisk progress so far.
Let us see what today holds for us.
When we
adjourned the other day, we were in the midst of discussing part 3 and
had completed our debates on clause 45. Part 3 offers a new range of
options to regulators as alternatives to criminal prosecution in order
to ensure compliance. One important option, set out in clause 46, is
the stop notice.
The stop
notice would apply to situations in which there was an ongoing
dangerous activityfor example, the leak of hazardous material
on to land or water or in a factory. In such situations, the regulator
would have to do exactly what it says on the tin and say stop. A stop
notice would prohibit a business from carrying on the activity
specified in the notice, and the notice would remain in place until the
person had taken the steps specified in it.
Subsections
(4) to (6) give the grounds for issuing a stop notice. They state that
the notice may be issued only if the activity
is causing, or
presents a significant risk of causing, serious harm to...human
health...the environment...including the health of
animals or
the financial interests of consumers. The regulator
must also reasonably believe that the activity as
carried on by the business
involves or is
likely to involve the commission of a relevant
offence. The
provisions are important because they also allow the regulator to
impose a notice when an offence has already been committed and if an
offence is likely to happen. The Government believe that in certain
circumstances a regulator should be able to issue a stop notice to
prevent an offence from occurring if there is a risk to the public or
the environment. Indeed, it would seem odd to instruct regulators to
sit back and wait if they believed that that could
happen.
Subsection (7)
ensures that the steps specified to be taken in the notice must be
limited to compliance steps. Given the sometimes onerous nature of stop
notices we feel that it would be inappropriate to allow regulators to
include broader steps in the notice.
Mr.
Mark Prisk (Hertford and Stortford) (Con): I do not
profess to be an expert on non-criminal sanctions, but will
the Minister clarify whether the cases identified in
subsection (4) mirror those of the stop notices currently
available in law? The subsection has three specific provisions, and I
want to be sure that there is no significant variance from established
cases.
I was
approaching the end of my remarks. I now conclude. Stop notices will be
an important part of the regulators toolbox and will provide
important protection for the public. Alongside the fixed and variable
monetary penalties that we have already discussed, they have an
important function.
Mr.
Prisk: I thought when the Minister began his speech that
he was going to say it was a Prisk process, but it
seems that we have made brisk progress. After that fourth-form attempt
at humour, I shall move swiftly on.
Stop notices
have considerable merit. The Minister rightly spoke of instances when
immediate action is required and urgency is the essence. We have been
assured that the cases are the same as under established stop notices.
In principle, we have no problems with the use of the sanctions in
those circumstances, although we will have questions about procedure
when we discuss clause
47. Lorely
Burt (Solihull) (LD): Welcome back to the Chair,
Mr. Chope, to what may be the last day of our
considerations.
On behalf of
the National Consumer Council, I want the Minister to explore the
nature of stop notices. The council is concerned that the test that the
regulators must prove before issuing a stop notice is too high and
that
a significant
risk of causing...serious
harm is
perhaps too high a barrier. I understand the grave importance to any
business of having a stop notice issued against it. However, if an
activity could be described as having a harmful consequence but not
necessarily falling into a serious category, I am worried about how
much leeway an individual inspector might have before issuing the stop
notice.
Mr.
McFadden: In some ways, the hon. Lady has answered her own
question. As she rightly pointed out, subsection (4)(b) states that
there is a case
when the
regulator reasonably believes that the activity as carried on by that
person is causing, or presents a significant risk of causing, serious
harm. The
provision is onerous in some ways, but we are talking about serious and
significant harm. The hon. Lady asked for an example. Hazardous
material or toxic substances could be leaking on to land or into the
environment, and of course that is serious. A stop
notice being issued in those circumstances could mean that the business
closes down completely until the problem is sorted out. If someone is
wielding a power that can cause a business to close down, it is right
that the threshold at which that happens should be high. That is why,
in some ways, the threshold is higher for stop notices than for some
other penalties under the
Bill. Stop
notices will not be an everyday occurrence when a breach might have
happened. I use the word subjectivelythe breach could be minor,
or it could be fixed with restorative action by the person or business
concerned. There could be breaches of regulations that are not in
themselves a danger to human health or the environment, so there could
be another sanction in such circumstances. However, given the
seriousnessI intend no punof stop notices, the use of
the words significant and serious
probably set the bar at the right
level. Question
put and agreed
to. Clause
46 ordered to stand part of the
Bill.
Clause 47Stop
notices:
procedcure
Mr.
Prisk: I beg to move amendment No. 43, in
clause 47, page 23, line 32, leave
out 14 and insert
7.
The
Chairman: With this it will be convenient to discuss
amendment No. 51, in clause 47, page 23, line 32, leave out
within and insert
as quickly as possible and no
later
than.
Mr.
Prisk: The amendment would change the current provision
whereby a completion notice is issued within 14 days to within seven
days of such an application. As we learnt in the debate on clause 46,
stop notices are often used in urgent circumstances. The Minister
referred to a possible chemical leak or something of that nature, and
urgency is clearly at the heart of this form of sanction. Equally, it
is often the casein fact almost invariablythat
compliance is evident. It is visible to the inspector and is usually
fairly straightforward. In most circumstances, when one asks someone to
stop doing something, it is reasonably straightforward to identify
quickly that that has happened. Given that fact, 14 days seems a long
period in which to issue a completion certificate. As I said, in most
cases, it is fairly evident whether the activity has ceased.
When the
situation is one of harmthe usual circumstances in which the
stop notice is usedit is in the specific interests of the
regulator to ensure that action is prompt as well. Therefore, there is
a strong case for saying that 14 days is a very long period. That is
why I think that seven days will be sufficient for the regulator to
issue a completion certificate. Most cases involve attending a site,
seeing that the activity or potential harm has been ceased, and thus
being able to identify that
directly. I
realise that there may be one or two incidents in which the regulator
is not able to manage a particular series of incidents. However, those
would be the exception. It is important that we send out the message
that stop notices are for urgent issues and for ceasing specific
activities. The regulator, therefore, should be able to
issue the certificates in a similarly prompt manner. I hope the Minister
will respond positively to an amendment that improves this part of the
Bill.
Lorely
Burt: Our amendment No. 51 is very much in the same spirit
as the Conservative amendment No. 43. The difference is that our
amendment acknowledges that there may be occasions when 14 days are
necessary. Any arbitrary line that one draws will always have a problem
one way or another. What is important about our amendment is that it
emphasises the importance and urgency of making the decision as quickly
as possible, and no later than 14 days. It keeps the 14-day deadline,
butlike the Conservative amendmentit seeks to inject a
note of urgency.
Closing a
company for any period of time can be seriously harmful to its future.
We wish to see those few words added to the clause so that no one can
be under any illusion that it is very urgentjust as urgent as
the issuing of the stop notice itselfto issue the other
certificate as quickly as possible once there is
compliance.
Mr.
McFadden: I have a significant degree of sympathy with the
points that have been made. The hon. Member for Hertford and Stortford
said earlier in our proceedings that time is money, and he is right
about that. Time is money for businesses and there should not be undue
delay in responding to a request for a completion certificate to be
issued. We are talking about a situation in which a person on whom a
stop notice has been served may apply for a completion certificate and
the regulator must decide whether to issue one within 14 days. The
clause requires the regulator to issue a completion certificate once
they are satisfied that the business has taken the steps specified in
the stop notice. That allows the business to carry on its activity as
before, with the problem having been rectified. I would expect that to
happen as soon as is practical for the regulator. It is important that
the Committee understands that 14 days is a maximum. The clause says
within 14 days, so 14 days will not be the
norm. 9.15
am The
procedure in clause 47(2)(e) allows a business to request a certificate
from a regulator confirming its compliance. It is a safeguard intended
to ensure the ongoing monitoring of the operation of the stop notice.
The amendments suggest either a seven-day limit, or the insertion of
extra words to ensure that 14 days is seen as a maximum. Although I
understand the hon. Gentlemans pointhe is right to say
that time is moneywe believe that on some occasions it could
cause difficulties. A seven-day limit might not always provide the
regulator with sufficient time to assess fully whether a business has
complied with the notice.
I will
continue with the example that I used in relation to clause 46. A
business might, for one reason or another, have been releasing some
kind of toxic substance into the land. It could then have had a stop
notice imposed on it for the leaking pipe that was emitting the waste,
and the regulator might need to test whether the toxins had returned to
an acceptable level, below which there was no danger to public health.
In such a case, the regulator might have to wait for test results to be
returned from a lab before it could confidently say that the business
was complying. It might also have to
contact a third party that might be involved, and ensure that that third
party did not continue to suffer the harm that the original instance
had caused to it.
I do not
believe that such situations should be allowed to carry on for ever.
There has to be a limit, which is why there is a limit in the Bill. A
maximum limit of 14 days strikes the right balance between
providing a safeguard for business, where time is money, and allowing
regulators sufficient time to assess whether the business has
complied.
Amendment No.
51 accepts the 14-day limit but seeks to add extra words. I have
sympathy with that, but I do not feel that those extra words are needed
to stress that 14 days is a maximum. The clause says within
14 days. Perhaps I can offer additional comfort to
the hon. Member for Solihull, as I am happy to confirm that we will
amend the guide to the Bill so that it states explicitly that 14 days
is a maximum period, and that in practice we expect certificates to be
issued as soon as possible within that.
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