Regulatory Enforcement and Sanctions Bill [Lords]


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Mr. Prisk: I shall conclude my remarks by saying that we have probably exercised this issue up and down and in and out. On that basis, I shall not delay the Committee any further.
Question put and agreed to.
Clause 52 ordered to stand part of the Bill.
Clause 53 ordered to stand part of the Bill.

Clause 54

Appeals
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: It is important to pause on clause 54 because much reference was made during our debates here, but also in the other place, to the judicial protections for people who are subject to the regulations. Clause 54 requires that appeals under part 3 of the Bill must be heard by either the first-tier tribunal or another statutory tribunal specified by the Minister in the order made under that part. An appeal to such tribunals provides an important safeguard for businesses against the misuse of the civil sanctions. These tribunals are independent, impartial and highly qualified to review a regulator’s sanctioning decision.
Professor Macrory, to whom I have referred a lot, found in his report a number of advantages in routing appeals against the new sanctions to a specialist, expert tribunal, rather than to the courts. First, that will allow the criminal courts to concentrate on those issues that warrant prosecution rather than adjudicating on civil appeals. Secondly, tribunals can comprise members with legal and specialist expertise in the subject matter before the tribunal, thereby providing the tribunal on some occasions with a fuller understanding of the regulatory issues. In another part of my work, I am the Minister for employment relations, and have contact with the employment tribunals, where the role of these wing members, as they are sometimes referred to, or expert members, is often highly valuable. Regulatory cases could be concentrated through one tribunal under the first-tier tribunals heading as well, enabling expertise to be built up over time. For example, in the cases of regulatory non-compliance in magistrates courts, they make up less than 1 per cent. of all the cases, so it is difficult to provide specific training to magistrates and legal advisers for a field of law that, in percentage terms, is a small part of their work. This gives us the capacity to build up over time significant concentrated expertise.
Most of the detail concerning composition, functions, procedures and powers and so on is contained in the 2007 Act rather than in this Bill, but I want to make it clear to the Committee that this is the vehicle that we see as dealing with appeals. The tribunal will have legal members who are professionally qualified in appropriate fields, and other experts. The composition of a tribunal for a particular field will be determined partly by statutory orders to be made by the Lord Chancellor, specifying qualifications and numbers, and partly by the senior president of tribunals and other judicial leaders. I should stress that regulators and their sponsoring Departments will not have any influence in such matters: the independence of the tribunal panel is further guaranteed by section (1) of the 2007 Act, which extends the courts’ statutory guarantee of independence under the Constitutional Reform Act 2005 to the tribunals.
There is an exception to all this in clause 54 (1)(b), which says that the appeal could be held by
“another tribunal created under an enactment.”
That is to take account of the fact that a number of statutory tribunals will not be transferring. The employment tribunals are a good example of that. They currently hear, for example, some health and safety appeals, so that is covered by subsection (1)(b). However, they have similar characteristics and safeguards to the first-tier tribunal.
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Subsection (2) makes it clear that statutory tribunals only, not ordinary courts of law, can be specified. However, they have similar characteristics and safeguards to a first-tier tribunal. Subsection (3)(a) allows the Minister, when setting out the power, to make provision for the suspension of the effect of a fixed penalty or other requirement during an appeal. A person could apply for a stop notice to be suspended pending the result of an appeal. If that application is unsuccessful, the notice will remain in force during the appeal. However, should the person appeal, the effect of the stop notice can be automatically suspended until the result is known.
Subsection (3)(b) enables the Minister to make provision about the powers of the tribunal. Examples of those powers are set out in subsection (4), which details that the tribunal may
“withdraw the requirement or notice...confirm the requirement or notice...take such steps as the regulator could take in relation to the act”
or
“remit the decision...to the regulator”.
The Bill is not prescriptive about the powers of the tribunal, because a tribunal may have existing powers. Detailed rules governing the exercise of the powers will be provided in the tribunal procedural rules that will be made under existing provisions of other Acts—I have mentioned the Act that establishes such things.
The clause is an important part of the machinery. We have talked a lot in our debates on this part of the Bill about the different enforcement options available to regulators, such as fixed monetary penalties, variable monetary penalties, stop notices, restoration acts, restoration notices and so on. The rights of appeal that we are talking about to deal with the problem of judge and jury being one are set out in the clause.
I hope that is helpful in assuring members of the Committee that the measure is a robust and important part of the enforcement mechanism.
Mr. Prisk: I am grateful to the Minister for those remarks. As he said, we have rehearsed the arguments as to whether the measure provides a sufficient protection as an appeal process in the absence of the ability of someone whom we might call the accused to refer their concerns to an ordinary court of law, so I do not propose to go over them again.
The clause permits appeals to be heard either by the first-tier tribunals, which the Minister explained at some length, although I still have a question. Subsection (1)(b also permits another statutory tribunal that Ministers can specify. The Minister alluded to the fact that there is some expectation that employment tribunals may participate, not least because they handle health and safety at work cases.
I have two separate but important questions. How significant a role does the Minister envisage for non-first-tier tribunals, which are alluded to in subsection (1)(b)? What estimate has his Department made of the costs of the appeals process and what budget has been put to one side for the first year, say, after the measure is launched?
Mr. McFadden: The hon. Gentleman’s first question relates to the proportion of cases dealt with by first-tier or other tribunals. The answer is that it depends on the jurisdiction. As I said, one of the advantages to business, regulators and everyone concerned is that hearing appeals through a tribunal can concentrate experience and work of that nature over time and build up expertise. However, when the jurisdiction is not dealt with by the first-tier tribunal but by an employment tribunal, the latter would deal with the process. Given that this is enabling legislation covering a significant degree of enactments, it is difficult for me to give the hon. Gentleman the percentages of first-tier and other tribunals. The answer to the question is that it will depend on the jurisdiction and the issue at heart; health and safety, for example, might be dealt with by other tribunals, other issues that we have talked about might not.
I may have to return to the hon. Gentleman with the answer to his question about the budgets that have been set aside. On costs, this is one of the parts of the Bill that I was referring to when I mentioned the impact assessment the other day. This part of the Bill is expected to give rise to the most significant savings to business. If memory serves me right, the savings on costs to business will be up to £80 million. In terms of the budget set aside to do the work, the answer may be shared between my Department and the Ministry of Justice, which is the lead Department for tribunals. I will come back to the hon. Gentleman on that, or write to him. I would prefer to do that rather than to give him a figure for the budget right now.
Question put and agreed to.
Clause 54 ordered to stand part of the Bill.
Clauses 55, 56 and 57 ordered to stand part of the Bill.

Clause 58

Consultation and consent: Scotland
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: The clause touches on an issue alluded to by my hon. Friend the Member for Glasgow, North the other day, so I thought that it might be worth setting out what we hope to achieve in the provision. My hon. Friend pointed out that the Procurator Fiscal Service and the Lord Advocate decide on prosecution matters in Scotland. The clause recognises that. It states:
“A Minister of the Crown must obtain the consent of the Lord Advocate before making an order under this Part in relation to an offence in Scotland.”
There are two issues involved: the legal issue and the devolution issue. I will deal with devolution first. Clause 56 is clear:
“An order under this Part may not, except for consequential purposes, make any provision which would be within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament.”
We are familiar with the concepts of devolved and reserved matters.
Clause 58 requires that a Minister proposing to make an order affecting the prosecution of any offence in Scotland must obtain the agreement of the Lord Advocate. The Lord Advocate is responsible for prosecution in Scotland and should therefore consent to the proposed changes. Giving regulators civil sanction powers would remove that decision from the Lord Advocate, so we thought that it was absolutely right to put the provision into the Bill.
Subsection (2) requires a Minister proposing to make an order affecting the powers of a regulator that is a local authority in Scotland to consult Scottish Ministers.
Ann McKechin (Glasgow, North) (Lab): Where a local authority in Scotland becomes the primary authority for a company that operates in other parts of the United Kingdom, what would be the procedure if the primary authority wanted to enforce action in some other part of the United Kingdom? Would the relevant Minister still be required to take the authority of the Lord Advocate or a Minister of the Scottish Executive, who have no function outwith Scotland? Will my hon. Friend clarify the position?
Mr. McFadden: It is important to note the difference between subsections (1) and (2). Subsection (1) concerns the Lord Advocate and action in Scotland; subsection (2) concerns the powers of local authorities as regulators. The situation to which my hon. Friend refers already exists in some cases under the home authority principle. My hon. Friend the Member for Dundee, West is not with us this morning, but my understanding is that Dundee city council is a home authority that has four operations that operate throughout the UK. That situation is already provided for.
Under subsection (2), if a Minister proposes to make an order that affects the power of a regulator that is a local authority in Scotland, he would be required to consult Scottish Ministers, because they obviously have an interest in the function of local authorities in Scotland. For the avoidance of doubt, subsection (3) defines the term “local authority in Scotland”. We have set out the application of the Bill in terms of both reserved and devolved functions, but in this clause we also set out important procedural matters that respect the position of the Lord Advocate in Scotland.
Question put and agreed to.
Clause 58 ordered to stand part of the Bill.
Clause 59 ordered to stand part of the Bill.

Clause 60

Consultation: general
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: We have heard a significant amount about consultation in the debate, and it is an important part of the requirements of the Bill. The clause relates to other clauses that we have discussed or will come on to. Subsection (1) states:
“Before making an order under this Part the relevant authority must consult the following...the regulator to which the order relates...such organisations as appear to the relevant authority to be representative of persons substantially affected by the proposals”.
That could be a business group, which may represent a number of small businesses or other such persons. It is important that consultation is part of the machinery for which we are legislating, and there is a broad definition under subsections (1)(a) to (c) of who should be consulted. That will rightly ensure a high level of public scrutiny of the decision to award a regulator new sanctioning powers.
If there are substantial changes to any part of the proposals as a result of the consultation exercise, subsection (2) requires the Minister to undertake further consultation on the revised proposals, as he considers appropriate.
Mr. Prisk: Clause 60 is important and the process of consultation is essential if sanctions are to work as part of the Bill. Subsections (1)(c) and (2) are particularly important in the context of consumers. Quite understandably, we have discussed the principal relationships between regulator and regulatee, but it is important to recognise a third significant group—consumers. The Minister is nodding.
It is extremely important to ensure that the interests of consumer organisations, such as the National Consumer Council or the Consumers Association—better known as Which?—are included in the process as those organisations do an excellent job of representing consumers’ interests. They represent the interests of many of our constituents, so it is extremely important that the measure is not simply confined to a narrow relationship between the regulator and regulated—I think that is probably better English than regulatee; it is important that the provision goes further than that. We welcome that addition to the clause.
Question put and agreed to.
Clause 60 ordered to stand part of the Bill.
Clause 61 ordered to stand part of the Bill.
 
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