The powers are contained in the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) but will need to be brought into force by the Government by implementing legislation before they come into effect.
Environmental law expert Simon Colvin of Pinsent Masons, the law firm behind Out-Law.com, said that a little-discussed provision of the LASPO could be of wide-ranging impact, particularly for larger companies.
"One of the central sentencing considerations according to the magistrates' court sentencing guidelines is the need for a fine to have a real economic impact and to bring home to management and shareholders the need to improve regulatory compliance," he said. "Previously magistrates have been confined by caps on the maximum level of fine, but LASPO will see the removal of these caps meaning potentially very significant fines for environmental offences could be just around the corner – especially for larger companies."
The provision has "sneaked in under the radar" of many people concerned with environmental compliance, he said, perhaps because of the Act's wide-ranging application to other regulatory matters including commercial and health and safety cases and some offences under the Bribery Act.
Many laws and regulations that apply to businesses include criminal offences that are punishable on summary conviction in a magistrates' court, which is the lowest level of court in England and Wales. These offences may apply to individuals, such as company directors or employees, or legal 'persons' such as the company itself.
If formally brought into force by Government, the provision will replace fines capped at amounts equal to or above the 'statutory maximum' with unlimited fines. Fines below the statutory maximum, currently set at £5,000, will remain capped in accordance with the standard scale but the amounts may increase. The Act will also allow the Justice Minister to replace any changes with new caps in future if necessary.
The Government will need to implement the provisions by way of a commencement order before they can take effect.
Colvin said that the creation of the provision against a backdrop of other current regulatory initiatives sent a "mixed message" about the Government's plans for the future of environmental regulation. "These changes have come into effect against a backdrop of the red tape challenge that is set to reduce the number of environmental offences, attempts to block and delay the introduction of civil sanctions for environmental permitting offences and the Law Commission study concerning the removal of criminal sanctions for a number of environmental offences," he said.
The Environment Agency now has the power to issue civil sanctions including fixed and variable monetary penalties for certain environmental offences without resorting to a criminal prosecution. However, the power to issue civil sanctions for environmental permitting offences was delayed further this year whilst the Government undertakes further work on "whether and when" these powers can be introduced.
"All these different strands need to be drawn together into a coherent approach to the regulation and enforcement of environmental offences," Colvin said.