Limiting civil sanctions "paves the way" for introduction to environmental permitting regime

In a written ministerial statement, Business Minister Michael Fallon said that powers granted to certain regulators to impose fixed monetary penalties, variable monetary penalties and restoration notices should only be used against companies with more than 250 employees. Other civil sanctions contained in the Regulatory Enforcement and Sanctions Act may still be granted "without restriction as to the size of undertaking against whom they might be used", the statement said.

Simon Colvin of Pinsent Masons, the law firm behind Out-Law.com, attended an event hosted by University College London (UCL) at which Cabinet Minister Oliver Letwin confirmed the change. Colvin said that Letwin said that this was due to concerns that the regulators might get 'trigger-happy' in their use of the sanctions, particularly in relation to individuals and smaller operators that may not be in the position to appeal.

"There was some confusion on the minister's part in relation to the standard of proof required to impose a civil sanction," Colvin said. "He suggested that it was the 'civil' standard of proof – on the balance of probabilities - whereas it is in fact the 'criminal' standard - beyond reasonable doubt."

Colvin added that "despite the confusion", the Cabinet Office was "clearly opening the gates for the introduction of civil sanctions under the environmental permitting regime".

"It was suggested by others at the event that this would happen in the next 18 months," he said.

The Government confirmed in March that it would not introduce civil sanctions for breaches of the EPR when the latest revisions to the regulations took effect in April this year, citing the lack of a "cross-Government position" on the use of the sanctions and additional scrutiny requirements. It is now undertaking further work on "whether and when" these can be introduced, it has said.

Both Natural England and the Environment Agency now have the power to issue civil sanctions for certain environmental offences, while retaining criminal prosecution as an option for the worst offences. Available sanctions include fixed and variable monetary penalties, compliance and restoration notices and 'stop' notices. The last of these requires an offender to immediately cease an offending activity.

Offenders may also provide formal voluntary 'enforcement undertakings' to the regulator. Enforcement undertakings give offenders the opportunity to correct their behaviour and to rectify and make amends for any damage already caused. They must be offered by a company on a voluntary basis, rather than being requested or suggested by the regulator, and must identify any steps the offender will take to put right any harm caused and to return to legal compliance both in the immediate and long term.

Speaking at the UCL event, a representative of the Sentencing Council announced that it would consult in the New Year on new sentencing guidelines for the sentencing of environmental offences. According to Colvin, among the proposals that will be discussed as part of the consultation exercise is the introduction of a "fairly prescriptive tariff-based system" for these offences, which could see a significant change in the level of fines aimed at repeat offenders. "There is a suggestion that the tariff could stretch into millions of pounds for the most serious of offences by the largest companies," said Colvin.

"This will be of particular concern to large waste management companies and water companies which, due to the nature of their businesses, are on the front line of environmental regulation," Colvin said. "The introduction of a higher tariff-based system will also be of wider concern, particularly once the £50,000 cap on fines in the magistrates' court is removed. Clearly there will be scope to influence the final guidance when the draft is put out to consultation, and I would encourage those in regulated sectors to ensure that they participate."

The Government was given new powers to remove the cap on the level of fines that can be issued by magistrates' courts in England and Wales earlier this year. However the powers, which are contained in the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO), will need to be brought into force using implementing legislation before they come into effect.