Criminal Liability in Regulatory Contexts Responses - Law ...

1.156 We note, however, that it is important that certain conduct, the proscription of
which may be defined as regulatory in nature, is properly deterred. Society is
entitled to say if people are engaged in a particular sort of business, they should
take steps to avoid consequences X, Y and Z, because these have serious and
harmful consequences, and it is therefore right that failure to take these steps
attracts a criminal sanction.
1.157 In the main, the proposals are good in principle, but when applied to a specific
offence it will be necessary to look at the detailed effect of applying them and the
potential consequences of removing any existing criminal offences.
1.158 The theory of deterrence is important in the regulatory context. If a person
wishes to engage in a particular sort of business, which creates environmental or
consumer risks, it is not unreasonable that they should be expected to take steps
to mitigate or avoid these risks. As some are serious risks, failing to mitigate or
avoid them may properly attract a criminal sanction.
1.159 Conversely, we acknowledge that where too many offences are created and the
law becomes too complex, the law may be ignored, and its deterrent effect is
diluted. We agree that if there are too many regulatory offences this is
undesirable, not least as it means that there will be offences which are never
prosecuted.
1.160 There are already historical examples: the criminal offence of insider trading was
rarely used and a more realistic alternative of market abuse was established
when the Financial Services Authority was set up to address the same conduct.
Therefore a precedent has been set for finding alternative civil methods and
sanctions for covering activity which was previously only governed by the criminal
law.
1.161 The Bribery Act 2010 is an example of legislation where Parliament has decided
that corruption is a serious form of criminality which requires commercial
organisations to take positive steps to avoid committing the offence of failure to
prevent bribery (section 7). This new criminal offence has been widely publicised
and it is likely that it will cause a wide scale change in corporate behaviour and
procedures.
1.162 If it is intended that regulatory breaches should be dealt with by regulators rather
than being subject to inappropriate criminalisation, it is essential that there are
organisations with sufficient resources to be able to prioritise this activity and
enforce the law. We are not sure how this sits with the Coalition Government’s
desire to reduce the numbers of Quangos and regulatory bodies and would want
to be sure that any changes will not have a negative impact in the active
enforcement of regulation, or the appropriate safeguards for those subject to
regulatory enforcement.
1.163 We agree there are too many detailed regulatory offences, and many of them
overlap with other criminal offences or are inappropriately detailed when dealing
with a particular subject matter.
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