Civil sanctions make the punishment fit the crime, says Richard Kimblin.
For many years there has been dissatisfaction with the way in which a number of regulatory regimes are enforced. Commentators, and indeed regulators, have expressed the view that limiting the enforcement sanctions to those available on criminal prosecution has a number of disadvantages.
Principal among these are the general inability of the criminal courts to deal with the financial gain - which there might be from breaches of regulatory schemes of legislation, including environmental legislation.
In addition, it has also been a common complaint amongst the regulated, that prosecution is sometimes used in a way which is disproportionate to the breach.
But a new toolkit is available via Part 3 of the Regulatory Enforcement and Sanctions Act 2008. It provides a scheme to those regulators who have, or will receive, the necessary powers to use it.
On 6 April 2010 the Environment Agency and Natural England received those powers and at the same time, Defra published its guidance on the operation of the new toolkit. Since then the Environment Agency has followed Defra's lead and published its policy and guidance for consultation.
The function of the Environment Agency's policy and guidance is to make clear how the tools are to be used in the environmental context, but remaining within the overall scheme as described in Defra's guidance.
The starting point is that civil sanctions are to be used by the regulator and the decision as to whether or not to impose such a sanction is for the regulator. The new sanctions include:
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Fixed monetary penalties. These would tend to be at the lower end of the range of potential financial penalties and have a capped maximum at the same level as the maximum penalty which may be imposed by a Magistrates' Court in those cases which can only be tried in that Court.
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Enforcement undertakings: these are an important new tool. They permit an agreement between the Environment Agency and an operator or individual to require certain works, for example, to be undertaken. This allows an operator to deal with an incident or a breach of permit in a way which doesn't attract issues of liability or the stigma of prosecution. From the Environment Agency's point of view and those interested parties who are concerned about the incident, the advantage is that the focus is on putting right that which was the problem, rather than questions of punishment or deterrent.
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Stop Notices - as the name suggests, a power to enable the Environment Agency to serve a notice to require that a certain activity is ceased, subject to compensatory provisions if the notice is ill-founded.
- Discretionary requirements including variable monetary penalties (VMPs) - of which more below.
For those cases which are more serious in nature, whether because the act is overtly criminal, reckless, or undertaken with a deliberate view to profit - those matters would still result in prosecution in much the same way as they would at present.
The Environment Agency expects that some 20 per cent of matters which are currently prosecuted would shift to the civil sanctions regime. Rather than shifting a very high proportion of prosecutions to the civil sanctions regime, it appears likely that a higher proportion of those incidents which are subject to warning letters or formal cautions will move to the civil sanctions regime.
Given the further training and development work to be undertaken within the Agency, it is unlikely that civil sanctions will come into significant use before the end of 2010. When they do, they will represent, on the one hand, a significant change in the regulatory environment, but on the other, a still modest practical change.
The significance of the change is in removing from the operator a number of choices as to how any particular breach is dealt with. Importantly, it is for the regulator to decide whether to impose a civil sanction or start a prosecution. In those circumstances, choices such as the ability to elect jury trial are no longer available to the would-be defendant.
But at the moment the range of offences to which the new toolkit applies is relatively modest. No doubt, in due course, the extent of the scheme will be expanded to include a greater proportion of the criminal sanctions which are available to the Environment Agency.
In Wales, the same powers are likely to be available, but the matter still remains to be considered by the Welsh Assembly Government.
Impact
Will the new powers make a difference? If use of civil sanctions succeeds in bringing about a less costly and better tailored approach to sanctioning then there will be real differences, both directly and indirectly. The potential indirect effects include a real possibility that a specialist environmental tribunal may start to develop.
The decisions of that tribunal will be informed by, and are likely to inform, decisions on regulatory penalties in other spheres of regulation which remain within the criminal jurisdiction. Given that the powers available under a VMP extend to £250K per offence, that may be a significant influence.
