Criminal Liability in Regulatory Contexts Responses - Law ...

(4) prosecution in relation to new practices may prevent the spread of such
undesirable and harmful practices within an industry. The deterrent
element of prosecution is often forgotten
(5) the trader is targeting and exploiting vulnerable consumers
(6) the nature of the case is such that intrusive investigation (such as test
purchases) is needed in order to get the relevant information to decide
what action is appropriate. An offence is needed to justify access to the
more intrusive powers
(7) the trader commits a string of similar, but different, offences such that
each one is a 'first' offence.
1.692 For many traders, especially at local level, only the threat of arrest and
imprisonment is an effective deterrent. Fines/penalties may not be paid or may be
seen as a price worth paying as the profit from the activity outweighs the fine.
Scams are a particular example of where the only real deterrence for professional
scammers is the threat of prison. Civil sanctions would be unlikely to affect the
economic viability of the scam (OFT research estimates that UK consumers lose
approximately £3.5 billion to scams each year).
1.693 The OFT fully supports the introduction of civil sanctions as an alternative to
criminal penalties, and notes there are areas where currently the only recourse is
prosecution. For instance, no civil sanctions currently exist for failure to comply
with the investigation of competition cases, although in certain circumstances it is
a criminal offence not to comply with the OFT's information-gathering powers.
The OFT believes that the ability to impose civil sanctions in these circumstances
(similar to European Commission’s ability to impose daily fines in EU competition
cases under Article 24 of Regulation 1/2003) would allow the OFT to take action
in cases where the seriousness of the conduct ought not to warrant criminal
sanction, and encourage parties to provide information more fully and in a more
timely fashion. Criminal sanctions might nevertheless be appropriate in the most
serious cases, such as where a party physically prevents an investigation team
from entering a building.
Kiron Reid, Liverpool Law School
1.694 One of the three key principles that should be adopted from this report. (The
others being proposals 1 and 3). “Criminal offences should, along with the civil
measures that accompany them, form a hierarchy of seriousness.” (Para. 1.44).
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