The Regulatory Enforcement and Sanctions Act gives regulators
access to new powers. The powers are not automatically awarded,
though. The Act just makes it possible for a minister to award them
to a regulator and are not available until a minister has granted
them.
Most of the Act comes into force on 1st October. Other parts of
it will come into force in April 2009.
"The new administrative sanctions are being introduced in order
to provide regulators with a more consistent, flexible and
proportionate set of sanctions to use when dealing with regulatory
non-compliance," said an explanation of the new law from the
Department for Business, Enterprise and Regulatory Reform
(BERR).
The penalties are civil and are designed to give regulators an
option that is not as time-consuming or risky as taking criminal
prosecutions.
The law is a response to a review of regulation conducted in
2006 by Professor Richard Marcory. "The review noted that many of
the current sanctioning regimes were ineffective, over-reliant on
criminal prosecution and lacking in flexibility," said BERR's
explanation. "His recommendations included introducing an
alternative system of civil sanctions in order to set up a modern
and targeted sanctioning regime that would enable regulators to
match the sanctions to the circumstances of different cases."
Regulators who are given the power will be able to impose fixed
or variable penalties on organisations which they believe are
behaving unacceptably.
The Act could also give regulators the power to order
organisations to stop certain behaviour or even take steps to
restore a situation to how it was before the organisation broke any
regulations.
"The purpose of introducing this new approach to regulatory
enforcement is to improve current sanctioning regimes by giving
regulators access to a range of powers – an extended sanctioning
toolkit," said BERR's explanation. "Regulators will able to choose
the approach that is best suited to the offence and the
circumstances in which it was committed."
Regulators which could be granted the new powers include the
Information Commissioner, the Gambling Commission, the Office of
Communications (Ofcom), the Office of Fair Trading and the
Competition Commission.
The Information Commissioner's Office (ICO) said that it had not
asked the Minister for Justice to grant it the additional powers
because it is engaged in separate negotiations with the Government
about whether or not its powers would be increased.
BERR said that any ability regulators are given to impose the
direct penalties should be used sparingly. "The new sanctions will
not replace more informal methods of enforcement, such as advice or
warning letters and should only be used where it is necessary and
proportionate to do so," it said.
