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The noble Lord said: This amendment is probably not very well drafted, but I hope that the idea behind it will have been conveyed to the Minister, his officials and other noble Lords. There are already provisions that if a fixed monetary penalty is to be imposed, you can appeal against it and there is an internal review. My amendment seeks to replace the internal review with an independent review by what I describe as,
- “an independent judicial person appointed by the Secretary of State or Welsh Ministers, as the case may be”.
That person would be a kind of ombudsman who could review the monetary penalty in the first instance, rather than it being reviewed simply by one of the colleagues of the person who imposed the penalty in the first place. I beg to move.
The Deputy Chairman of Committees (Lord Colwyn): I point out to the Committee that if this amendment is agreed to, I shall not call Amendments Nos. 121 to 131 for reason of pre-emption.
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Lord Bach: That makes it tempting in itself, but I will resist. We believe that fixed monetary penalties would be unworkable if the approach proposed in the amendment were to be adopted. As we have just discussed, we do not think that it is appropriate to add a “notice of intent” stage to the process for imposing fixed monetary penalties, and I will not go over that again.
On the specific proposal that representations should be heard by an independent judicial person prior to a notice being imposed, we think that this is unnecessary and undesirable. Although this is in a sense a probing amendment, it is not clear from the amendment who this independent judicial person would be or what powers they would have, but presumably they would be akin to a tribunal. If the amendment were accepted, further provision would need to be made for this judicial body in the Bill, thereby increasing the complexity and bureaucracy of the process of imposing what we want to be a quick and simple sanction; of course, with safeguards. The amendment would also, in effect, give a business that had clearly breached the regulations two rights of appeal against a sanction, both before and after its imposition, possibly to two different bodies. That would be disproportionate and would raise costs, particularly for businesses.
The internal review stage—the first appeal—proposed by the Bill would, by contrast, be a less costly and much more accessible way for a business to make representations and raise defences. We understand the Committee’s concerns about the process for regulators determining a business’s liability to fixed monetary penalties. That is why the safeguards are there, particularly the right of appeal which, although it is at a later stage of proceedings, surely goes quite long way to satisfy the noble Lord. Review by such a tribunal will mean that regulators ought to ensure that their decisions will meet the requisite legal requirements and standards of procedural fairness. If there was to be this right of appeal, we are pretty sure that regulators would simply choose not to take up the new sanctions and would rely on criminal prosecution instead. While that might please the noble and learned Lord, Lord Lyell, it would not please the many organisations that supported what Professor Macrory has suggested.
Amendment No. 120 would allow a business to make oral as well as written representations and objections against a sanction being imposed. This point is covered by Amendment No. 128 which, the brief says, we will come to shortly.
Lord Desai: The Bill is trying to simplify procedure and speed matters up. These amendments are trying to get back to the situation where everything is delayed. You cannot ask for red tape to be cut and then put in procedures that do not allow red tape to be cut. That is a contradiction in the noble Lord’s position.
Lord Cope of Berkeley: I got nervous when the Minister talked about quick sanctions that could be slammed on by a junior official, with the only appeal being to that official’s boss. The noble Lord, Lord Desai, makes me more nervous when he says that it is all about quick sanctions. On the other hand, I found
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Amendment, by leave, withdrawn.
Clause 38 [Guidance about quality contracts schemes]:
Lord De Mauley moved Amendment No. 121:
The noble Lord said: My amendments in this group are very similar in effect to those tabled by my noble friend Lord Goodlad, which we have just debated at some length, so I shall, I hope, please Members of the Committee by not arguing the case in full. A major basis for the Minister rejecting my noble friend’s amendment was that it would add complexity, and I suspect his criticisms of this series of amendments will be identical. Our view of whether that complexity would be worth while is critically dependent on the earlier question we discussed about a better understanding of the quantum of fixed penalties, so I urge the Minister to think carefully about how far he can go towards producing those important criteria that he earlier said would be laid down by order. I move this amendment only to allow him an opportunity to comment on that. I beg to move.
Lord Bach: As the noble Lord fairly said when moving this amendment, we have been here before, and I am going to be very short in responding. We believe that a “notice of intent” stage for fixed monetary penalties would undermine the usefulness of the sanction and would add a layer of complexity disproportionate to the types of non-compliance that these penalties are designed to address.
As I understand it, Amendment No. 128 is in this group. The noble Lord has not had a chance to speak to it. Will he make the same point that he made in his opening remarks about what he wants me to answer on in particular in relation to Amendment No. 121? I did not catch it.
Baroness Wilcox: Amendment No. 128 is there, and my noble friend does not want to intervene.
Lord De Mauley: Is the Minister asking purely about the issue of oral and written representations raised by Amendment No. 128?
Lord Bach: That is Amendment No. 128, but when the noble Lord moved Amendment No. 121, my concentration slipped for a moment, and I did not catch the new point he was raising and wanted me to reply to.
Lord De Mauley: I am very grateful to the Minister. I was not raising a new point; all I was saying was that our view of whether the element of complexity, which the Minister criticises, that would be introduced by this group of amendments would be worth while
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Amendment, by leave, withdrawn.
Lord De Mauley moved Amendment No. 122:
“( ) where the person on whom the notice is to be served has registered a primary authority, that notice must be served through the primary authority on such person as shall be registered with the primary authority as competent to receive such notices,”The noble Lord said: This amendment ensures that, in the case of a multi-site business, any notice is served on the right, sufficiently senior person. For example, a local manager should not be able to get away with paying a penalty in order to keep his own lapse of compliance secret from his bosses. The amendment would ensure that the company was served with the penalty, at least where it had registered a primary authority. I beg to move.
Lord Bach: I thank the noble Lord for raising the issue. I understand the concern he raises that multi-site businesses have about the service of enforcement notices. It would not be appropriate for either the enforcing authority or the business for all fixed monetary penalties across the country to only be served by a primary authority and only on a designated person within a company.
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For an enforcing authority, this would mean that should it wish to serve a notice on an outlet in Cornwall, for example, the authority would have to send the notice to the primary authority for it to be served on a designated person within the company’s headquarters, which could be at the opposite end of the country. That would lead to unnecessary delays in dealing with the problem. It would also add a further layer of complexity and bureaucracy to the process for enforcing authorities, without delivering any real benefit to them. As for businesses, it would be inappropriate for the Bill to determine how their internal management systems should be structured.
The policy aim behind the amendment, which the noble Lord explained, might be better achieved administratively through the primary authority notifying the business whenever a sanction is imposed. The Local Better Regulation Office will hold a database of primary authority partnerships, including a contact point for each business that has a partnership agreement. It might well be possible to use this to achieve the aim behind the amendment. I know that officials from the Better Regulation Executive are happy to explore with their LBRO colleagues how this might work in practice. These are operational issues and do not need to be set out in the Bill. I hope that that goes some way to satisfying the noble Lord’s proper policy issue.
Lord De Mauley: I am very grateful to the Minister. What he suggests sounds like a very sensible compromise. In what form would that requirement be promulgated?
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Lord Bach: To which requirement does the noble Lord refer?
Lord De Mauley: The requirement for the sanction to be notified through the primary authority to the head office. I think the Minister referred to that.
Lord Bach: That would be done through holding a database of primary authority partnerships, including a contact point for each business that has a partnership agreement. The primary authority will know where to go because the LBRO has a database that will assist it to get to the business whenever a sanction is imposed.
Lord De Mauley: I am sorry to labour the point. The Minister has explained the mechanics. What he has not explained to me is where the requirement will be in regulatory terms. Will it be by order? I think that he is saying that it will not be in the Bill.
Lord Bach: As I understand it, on this occasion it would be part of the system that would be administratively sorted out between the various groups, the LBRO and the primary authority. I do not believe that it would require an order, but this is how it would actually work in practice: it would be an administrative arrangement between these organisations.
Lord De Mauley: I am grateful to the Minister. We have gone far enough with this, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 123 and 124 not moved.]
Lord Cope of Berkeley moved Amendment No. 125:
The noble Lord said: This is a simple amendment. When somebody is about to be fined or given a fixed penalty, or, for that matter, a discretionary penalty, they are allowed to object and to seek an internal review. The Bill is not clear on how long they have to object. Once they have objected, the regulator has 28 days to explain his side of the case for a fixed or a discretionary penalty. It is not clear how long the regulatee—whatever the word is—has. It would be helpful to be told at least how long the Government have in mind and whether they should put it in the Bill. Certainly it seems to me that the person being regulated will need to be told how long he has to appeal. I beg to move.
Lord Bach: I thank the noble Lord for his efforts in attempting to ensure the right balance is struck between providing a fair period for a business to contest the imposition of a sanction, while ensuring the process is not unduly long. In the case of fixed monetary penalties, we believe that 28 days would normally provide adequate time for a business to request an internal review of the decision to impose the penalty, so we are sympathetic to the amendment.
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On Amendment No. 140, dealing with discretionary requirements, we are more concerned that 28 days may not always prove sufficient time for a period of representations and objections to run its course. In particularly complex cases there may be more than one party to the case and objections and representations may need to be shared among them. There may also be third parties that are affected by the non-compliance and the business may wish to offer undertakings to such persons under Clause 41(5), so we feel that a limit of 28 days may prove too restrictive. That is why we are less happy with this proposal. To be fair, we would like to consider what he has said and perhaps we can discuss this matter at a later stage.
Lord Cope of Berkeley: That is extremely helpful of the Minister in both cases. I am not sure I quite understand the reason for the distinction between the two cases. My main point is that the person who is about to pay the penalty needs to know how long he has to require a review. The Minister has been extremely helpful in general terms. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord De Mauley moved Amendment No. 126:
Clause 38, page 15, line 38, after “to” insert “request an independent person appointed in accordance with provisions which shall be laid down in an order made under section 34(1) to”
The noble Lord said: I shall speak also to Amendments Nos. 129, 130 and 131. The procedures for the imposition of neither fixed nor variable penalties appear to allow an accused person to hear the evidence, to cross-question the enforcer, or to make representations on the basis of the evidence. More than that, the initial representations by the accused are considered only by the same regulator that imposed the penalty in the first place—the oft-repeated concern that the regulator becomes policeman, judge and jury, which would be wholly inequitable in terms of due process. This amendment—I am happy to admit that there may be a better way of achieving it—would mitigate an element of that situation by at least requiring the initial representations to be heard by an independent person. I beg to move.
Lord Bach: This amendment is very similar in many ways to that which we have just discussed in the name of the noble Lord, Lord Cope. From these amendments, it is not clear who the independent person would be or what powers he would have. Unlike the amendment of the noble Lord, Lord Cope, on this issue, which specifies that the independent person should be judicial, these amendments simply require the person to be independent.
On fixed monetary penalties, we have sympathy with the spirit of the amendments tabled. As the guide makes clear—of course, I make all the provisos about the guide—we recommend that the person or persons conducting the internal review should not have been involved with the original decision to issue the notice. The reviewer should work or have worked in the relevant area of regulation and, where possible,
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Lord De Mauley: I thank the Minister for his response. He has given me some food for thought, particularly as to the identity of the independent person. I shall perhaps consider the matter in conjunction with my noble friend Lord Cope and we shall see if we want to bring something back at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 127 to 131 not moved.]
Lord Lyell of Markyate moved Amendment No. 132:
Clause 38, page 16, line 5, at end insert “and all relevant facts and matters relied upon to establish such grounds”
The noble and learned Lord said: I can speak briefly as a result of what I took to be a helpful explanation from the Minister on the question of what “grounds” really means. At four different points in relation to the various amendments, when it says that the,
The Minister seemed to be saying when we discussed the amendment proposed by the noble Lord, Lord Goodlad, and I raised this question of grounds, that he had in mind that that is what the grounds should do. They should not just be a bare statement that you have failed to purchase a licence, or something like that; they should include all facts and matters which were relevant.
On the question of the amount of the penalty, dealt with in the second amendment, Amendment No. 133, I have asked that it should say,
That will be highly relevant to the question that took me aback—that under fixed monetary penalties the words, “reference to prescribed criteria”, were actually quite complex and included such matters as whether you had made a profit; whether, although it might be an absolute offence, there had nevertheless been an element of intent; how big the business is; the circumstances of the offender, including their health; and the possibility of a misunderstanding or some other innocent reason.
It will be important to the person receiving the fixed penalty notice to understand what has been taken into account so that, when they ask for the
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Lord Bach: I am pleased that the noble and learned Lord was content with what I said about grounds. Let me just say it again. There will be a summary of the evidence; it is obviously not going to be full, but it will be more than just what would be on the charge sheet, if this were a criminal proceeding. I think that deals with three of the noble and learned Lord’s amendments. On Amendment No. 133 and the wording of Clause 38(3)(b), where it says that a,
- “fixed penalty notice must include information as to... the amount of the penalty and (if appropriate) how it was calculated”,
we think that that is probably enough. A regulator will have no discretion in determining the level of fixed monetary penalties. The penalty will be set at either a prescribed amount or the amount will be based on prescribed criteria. This will have been predetermined in the regulator’s penalty guidance, which the regulator will have had to publish by virtue of Clause 61, if that becomes part of the Bill. So we do not think on balance that it is necessary for there to be the extra words that the noble and learned Lord seeks in his probing amendment to put in the Bill.
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Lord Lyell of Markyate: I thank the Minister for that answer. There is still some residual worry. I find it difficult to spot how these prescribed criteria, which are obviously reasonably complex in order to attempt to be sensitive, will work in practice, and how they will vary in the exercise of the discretion. For example, if you decide to reduce the penalty because it happens to be an individual, and that individual is now ill, that needs to be explained. One needs to know whether that has been taken into account before the individual, or those assisting him, decides to accept it.
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