Criminal Liability in Regulatory Contexts Responses - Law ...

1.367 The Environmental Protection Act is similar, in that the notice provisions, for
instance for noise nuisance, provide a civil sanction, with a criminal offence in
place for the breach. Release of information, for instance “scores on doors” for
premises liable to inspection under the Food Safety Act is persuasive in bringing
businesses to compliance as an alternative to traditional criminal sanctions. In
“environmental permitting” risk ratings for the permit goes up and fees will then
rise if there is non compliance, resulting in increased interventions from the
regulator, such as more inspections.
1.368 In some of these cases, such as noise notices, the civil sanction would be
ineffective without the criminal sanction for its breach. We believe that in many
cases the criminal sanctions are effective in persuading businesses not only to
comply with non criminal sanctions, but also in dealing with lower level breaches
of criminal legislation – the fact that they are not used for every minor offence
indicates that Local Authorities only use them in appropriate circumstances. The
Regulators Compliance Code, as well as regulators’ individual enforcement
policies ensure that balanced decisions are made. Most legislation, quite rightly,
contains appropriate “due diligence” defences which mean that the regulator
must make find significant non-compliance issues before they can consider
prosecuting. Added to this, LG Regulation’s Home Authority Scheme means that
businesses have access to advice on defences from local regulators. In addition
the advent of Local Better Regulation Office (LBRO) and the Primary Authority
Scheme means that businesses who want take advice have the legal right to
receive it, to rely on it, and to challenge a regulator’s decision to prosecute.
Therefore we contend that the review has failed to appreciate the actual
regulatory framework in which Local Authorities and trading standards in
particular currently operate.
Judges of the Court of Session
1.369 We agree. The criminal law should be used in respect of those who flout
regulation in such a way as to cause very serious harm. It may also be needed in
respect of those who flout regulation persistently and it is needed for those
involved in organised deception.
Financial Services and Markets Legislation City Liaison Group
1.370 We support this proposal; however, we recognise that deciding whether particular
conduct is seriously reprehensible or not may sometimes be problematic.
1.371 We would note that where the FSA has the power either to commence a criminal
prosecution for market abuse or impose a regulatory sanction, the factors that the
FSA will consider in reaching its decision are set out in paragraph 12.8 of the
FSA’s Enforcement Guide. These factors include:
(1) “the seriousness of the misconduct: if the misconduct is serious
and prosecution is likely to result in a significant sentence, criminal
prosecution may be more likely to be appropriate; […]
(3) the extent and nature of the loss suffered: where the misconduct
has resulted in substantial loss and/or loss has been suffered by a
substantial number of victims, criminal prosecution may be more
likely to be appropriate; […]
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