Previous Section Back to Table of Contents Lords Hansard Home Page

Of course, for civil sanctions as for criminal sanctions, there must be procedural safeguards, despite the fact that civil sanctions do not have the same dramatic effect and do not register as criminal convictions.

Lord Lyell of Markyate: My Lords, the Minister said that egregious or more serious cases should go to the courts. Those were 40 per cent of all the cases that he produced. I have provided the figures on how many went to the magistrates’ courts and the Crown Court: 15,385 went to the magistrates’ courts and 76 went to the Crown Court. Now we are finding that 40 per cent are to go off to the courts and 60 per cent are to go into the new civil system. Did that not surprise the noble Lord, Lord Borrie?

Lord Borrie: Not really, my Lords. I imagine that there are more cases that are less deserving of criminal prosecution than those that are deserving of criminal prosecution. That is all that one needs to say on those figures. The greater flexibility that Part 3 provides is beneficial, so long as there are procedural safeguards—that was the point that I was making when the noble and learned Lord intervened. I do not think that the noble and learned Lord referred to them, but they require a notice with reasons of what the breach of the law has been, an opportunity for reply and a review. The regulator may then confirm his original view or not. If he confirms his original view, there is a right of appeal, albeit to an administrative tribunal.

I do not bow to the noble and learned Lord in my regard for the magistrates’ courts and the Crown Court, but tribunals are not novel in 2008. There is another anniversary: it is the half-century of the Tribunals and Inquiries Act 1958, which was established following the famous Franks committee, under Sir Oliver Franks, as he was then, to ensure the impartiality, fairness, merit, speed and efficiency of tribunals, which had been questioned. In other words, tribunals have a high reputation, too, and they seem very suitable to be entrusted with the task of dealing with the kind of cases that we are talking about under Part 3 of this Bill.

Lord Neill of Bladen: My Lords, before the noble Lord sits down, will he address the point that the language of Clause 38 speaks of a “relevant offence”? The whole of this is founded on the basis that there is an offence and that you get out of it—for example, under Clause 39(5)—only by having a defence that would completely answer a criminal conviction. In other words, the two systems are inextricably confused and the man in the street cannot possibly be looking at this in the way that the noble Lord is, which is that it is all civil penalties and nothing to do with the criminal law. It is all about offences.

Lord Borrie: My Lords, I do not wish to take up the time of the House, but my answer to that is that of course the starting point is a criminal offence, for

19 Mar 2008 : Column 354

which there could be a criminal prosecution. The purpose of Part 3 is to provide an alternative to a prosecution and to get at the problem in a somewhat different way.

Viscount Eccles: My Lords, we are in great danger of underestimating the impact of the introduction of this wide system on the individual. We are in danger of being shanghaied by the business community. This is not going to be easy. For example, if you privately abstract water, regulations and forms have to be filled in, with penalties attached to the abstraction licence if you do not stick to its conditions. There are lots of people in similar situations, living under regulations as individuals, and those people are used to the idea that, if they infringe, they go in front of the magistrates. There are social consequences of these courts being replaced by officials—in whom there is not the slightest degree of trust at the moment—who can be both judge and jury. This is going to take years for people to accept. Civil penalties for traffic offences, for example, do not do the relationship between the individual citizen and the police any good at all. On the whole, we do not like cameras or their consequences. This debate is about a compliance deficit which none of us can quite find and whose size and diversity we do not understand. We have been given no detailed evidence about the compliance deficit. We are completely underestimating the social consequences of what is proposed.

Baroness Wilcox: My Lords, I sympathise with the amendments of the noble and learned Lord, Lord Lyell. This part of the Bill that has not been properly addressed and, like my noble friend, I would like further assurances concerning the Bill empowering all regulators, and not only investigators and prosecutors, to become judge, jury and sentencers in their own cause. This is subject only to a right of appeal by the business or citizen concerned to a tribunal, probably the first-tier tribunal. It certainly appears to be a constitutional flaw within the Bill. I know that the Minister has no intention to affect negatively small businesses, small farmers, homeowners, drivers, small shopkeepers and others.

I would thus be keen for the Minister to clarify the impact of the Bill on small businesses. I hope that conversations may now be set up between the Minister and my noble and learned friend Lord Lyell of Markyate. I would have said “before Third Reading”, but we have run over time. The Minister has kindly said that there will be second day for this Report stage, which is likely to be 31 March at 7 o’clock in the evening. That will provide time for us to look seriously at this matter, for civil servants to give their views to the Minister, and for the noble and learned Lord, Lord Lyell, long though he may have waited, to have his say. He must feel that the House has listened sympathetically to him and is interested in the outcome. We thank the Minister.

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera): My Lords, I thank the noble and learned Lord, Lord Lyell, for his eloquent

19 Mar 2008 : Column 355

contribution to the debate. He will not be surprised to hear me say that I regret that we cannot accept the amendments, which are profound and would render Part 3 of the Bill pointless.

A large number of questions have been raised. On points of fact, I will be happy to write and have further discussion. I have received many notes from my staff with detailed answers, but given the time, I shall confine my remarks to restating the benefits and the purpose of the Bill.

The new sanctions will enable regulators to enforce offences much more effectively. They provide a clear, more flexible and proportionate approach to enforcement, and should help reduce the level of non-compliance and enable a more co-operative and consensual approach to regulation.

The noble and learned Lord has implied that criminal courts provide an adequate system and that there is no such thing as a compliance deficit. We should not forget that the powers in Part 3 are an alternative to criminal prosecution, and that the courts will have a continuing role to play in enforcing such offences. Professor Macrory said that the more serious and egregious cases should be dealt with by criminal courts to preserve the stigma of criminal conviction. Companies should not disregard criminal fines and sanctions as part of the normal cost of doing business.

10 pm

We should not forget that Professor Macrory made a number of recommendations that would help the criminal courts to tackle regulatory offences. He felt that the courts should be better equipped to deal with such offences by improving training, sentencing guidelines and information from prosecutors, and introducing new sentencing options. These recommendations were accepted by the Government in full and are being taken forward separately from this Bill.

As my noble friend Lord Borrie said, criminal prosecutions are not an answer in every case. Not every breach of regulation will warrant a criminal prosecution but most regulators lack a viable alternative means of enforcement, which has left them overreliant on criminal prosecution as a means of tackling breaches of regulation. This is what Professor Macrory identified as the compliance deficit, where no enforcement action has been taken because the appropriate tool is not available to the regulator. These civil sanctions provide more flexible means of tackling regulatory non-compliance.

Magistrates’ courts do not always have the necessary tools to tackle regulatory non-compliance. These cases tend to make up less than 1 per cent of all cases heard in magistrates’ courts. Philip Hampton, for example, found that a magistrate will typically see a health and safety offence once every 14 years. In contrast, regulators will be solely concerned with dealing with regulatory non-compliance in a particular field and will have a better overview of the seriousness of cases, the nature of the market, the profits made and the participants in that market—a view the regulator would have to take account of when it came to individuals as well as

19 Mar 2008 : Column 356

businesses. They will also be better equipped to set penalties that can provide an adequate sanction and deterrent, and can ensure that there are fewer regional variations. They will also be able to engage in more co-operative regulation by accepting undertakings from a business that is keen to put right any harm caused by its actions.

The noble and learned Lord accepts that administrative penalties have a role to play in certain regulatory fields. It is worth remembering that 15 regulators already have access to civil sanction, including the Health and Safety Executive, the Financial Services Authority, the Trading Standards Institute, the Office of the Rail Regulator, the OFT, Ofcom, Ofwat and Ofgem. The noble and learned Lord also raised concerns about the scope of the new provisions. We have limited access to the new sanctions to those regulators listed in Schedule 5, those who enforce the offences listed in Schedule 6 and those who enforce offences in secondary legislation made under enactments listed in Schedule 7. There is no power in the Bill to add to this by order.

The new powers will obviously be granted to regulators by ministerial order and require an affirmative resolution procedure. These new sanctions have also been subject to a thorough process of consultation, both as part of the original Macrory review and following publication of the draft Bill. They were welcomed by regulators, businesses, local authorities and representatives of the judiciary. I can provide quotes from the copious notes I have now received from representatives of the judiciary welcoming this.

Concerns were raised in your Lordships’ House about the safeguards in place. Incidentally, it is not right to say that Article 6 has been ignored in the design of the civil sanctions. Noble Lords will have seen in the Explanatory Notes that we have considered such matters and are sure that the Bill contains minimum procedural requirements to ensure that Article 6 is protected. We have also given detailed answers to the Joint Committee on Human Rights on its questions on Article 6 in a letter dated 14 January 2008. This letter is in the House Library.

I will not accept that we have not considered these matters. We listened to concerns raised by noble Lords. We have taken these into account and significantly improved the Bill. We added details on the grounds for appeal, a requirement on the Minister to review the effectiveness of any order conferring powers after three years, a power for the Minister to suspend the use of new sanctions where they are persistently misused and to specify that a regulator must be satisfied to the criminal standard of proof prior to issuing a fixed monetary penalty or discretionary requirement—which is why the analogy with the traffic warden really does not apply. We have also added, during the Bill’s progress through this House, a proposed notice of intent stage in the imposition of fixed monetary penalties, restricted the level of fixed monetary penalties and variable monetary penalties and how they can be set, and simplified the method of setting them, requiring regulators to publicise details of enforcement activity.

19 Mar 2008 : Column 357

That is in addition to the safeguards that were in place in the Bill on its introduction.

I understand the concerns expressed by the noble and learned Lord about a system in which a regulator rather than a court will impose a sanction. As I have already outlined, the Bill has put in place many safeguards, which mean that there will be no disadvantage for persons who will be subject to a civil rather than criminal sanction. In fact, there may be an advantage in having a system administered by trained experts experienced in the regulatory field.

Amendments Nos. 49, 50, 51, 52, 55 and 60 would prevent regulators imposing any of the new sanctions or accepting undertakings. Amendments Nos. 49, 50, 55 and 60 specifically would prevent regulators imposing any kind of monetary penalty. The noble and learned Lord’s amendments suggest a fundamental disagreement with the introduction of the civil sanctions and that these sanctions should be removed from the Bill altogether. I regret that I do not see what more we could do to satisfy him.

Amendment No. 52 would remove the exclusion of the police and prosecution authorities, such as the Crown Prosecution Service, from the definition of regulators in Clause 36. It would therefore allow these authorities to impose the civil sanctions in Part 3. As we stated in Committee, the new powers in Part 3 are an alternative to criminal prosecution and the latter will remain available to the police and prosecution authorities. The powers in Part 3 are designed specifically for use by regulators, who have closer ongoing relationships with and supervision of businesses, and it would not be appropriate to extend their usage to the police and prosecution authorities, which are primarily concerned with criminal matters. Under Clause 68, police and prosecution authorities will be able to refer matters to a regulator if they consider that a civil sanction may be more appropriate.

Given the lateness of the hour, I have nothing further to add except that I hope that the noble and learned Lord will feel able to withdraw the amendment.

Lord Neill of Bladen: My Lords, have we not set up a Supreme Court to keep the judiciary away from the political process? In that case, why does the Minister

19 Mar 2008 : Column 358

cite the opinions that judges have expressed on this Bill as an argument to persuade the noble and learned Lord to withdraw his amendment?

Baroness Vadera: My Lords, because they were consulted, as noble Lords would have expected us to consult them. If we had not done so, noble Lords would have asked why we had not.

Lord Lyell of Markyate: My Lords, I am a little in doubt as to our procedural position at the moment. Are we just going on through the evening—

Lord Bach: My Lords, the usual channels have agreed that we will adjourn at 10 o’clock, or around 10 o’clock, at the end of the debate on this group of amendments. The noble and learned Lord will have to decide whether to have a vote or withdraw his amendment. After that has finished, it is my intention to adjourn Report and then to adjourn the House.

Lord Lyell of Markyate: My Lords, that is extremely helpful. I had hoped that we were going to come to an end by fluxion of time at 10 pm and that the Minister would have time to prepare the answers which he understandably found it difficult to give tonight to my questions. That not being the case, I can tell the House that it has always been my intention to withdraw the amendment at this stage and to return to it, in so far as the rules of the House allow, at Third Reading. I am extremely grateful to all the noble Lords who have taken part and I include the noble Lord, Lord Borrie, who has immense knowledge of these matters. I would like to make quite a number of points in reply both to him and to the Minister, but if I start doing that now I will be another 10 or 15 minutes and that is not sensible. So at this stage, I beg leave to withdraw the amendment and we will return to the substantive issues later.

Amendment, by leave, withdrawn.

[Amendments Nos. 50 to 52 not moved.]

Lord Bach: My Lords, I beg to move that consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.


Next Section Back to Table of Contents Lords Hansard Home Page