Regulatory Enforcement and Sanctions Bill [HL]

had given notice of his intention to move Amendment No. 62: 62: Clause 41, page 18, line 13, leave out ““the regulator”” and insert ““an independent person appointed in accordance with provisions which shall be laid down in the order made under section 35(1)”” The noble Lord said: My Lords, in fact I rise to speak to Amendment No. 65A which replaces the original amendment, Amendment No. 62, which I shall not move, with apologies for any inconvenience that might cause. In a moment I will also speak to Amendment No. 69. The objective of Amendment No. 65A is to provide an accused business with the opportunity to make representations to an independent person when it is proposed to levy a penalty on that business. The Bill already provides for a review of the proposed imposition of a penalty if the business objects. It also provides for an appeal to a tribunal if the regulator decides to go ahead with the penalty. The Minister made much of this when he opposed our amendment in Committee. However, this is an appeal as a convicted person, not the hearing of a case on the basis of being innocent until proven guilty. The Bill provides that an enforcer should determine each of the following: first, that an offence has been committed beyond all reasonable doubt; secondly, that there are no due diligence defences; thirdly, that a penalty is the appropriate enforcement response rather than a prosecution in a court; and fourthly, the level of the penalty. Any review of these decisions is then, it is proposed, to be carried by that very enforcer, so that enforcer, as we have said before, is effectively the policeman, judge and jury. We simply do not believe that it is satisfactory or equitable for this to be the procedure. In his response to the debate on our amendment in Committee, the Minister could not oppose our proposal in principle, and indeed the guide published with the Bill makes it absolutely clear that this is what the Government want to happen, at least to some extent. The guide states on page 29: "““In order to provide a degree of independence, it is recommended that the person(s) conducting the review should not have been involved with the original decision to issue the notice””." But it goes on to say: "““The reviewer should work or have worked in the relevant area of regulation and, where possible, should be more senior and experienced than the person imposing the notice””." We support the first part of that statement, although the second slightly spoils the effect. However, we think that there is an essential degree of agreement here. Where we differ is on how important this is. We believe it is so important that it should be a provision in the Bill and not just left to a statement of hope in a guide. It is inappropriate to leave the civil rights of citizens or the rights of businesses before the law to a recommendation in a guide. Because he could not disagree in principle, the Minister suggested in Committee that the problem with the amendment was that it was not clear who the independent reviewer would be. Unfortunately there are many things in this Bill which are not clear. There are many implementation measures left to implementing orders, as this would be. As the amendment makes clear, and as the Minister did not recognise in Committee, this is exactly the procedure to be adopted here. In this case it is sensible because there will be different orders for different regulators, and so it will be possible to ensure that the independent reviewer is one who is relevant to the regulator. Thus, in the case of a local authority, it might be the legal department of that authority or a neighbouring authority. We will be happy for the Government to consider this further and to offer their proposals in the order rather than now. The effect of Amendment No. 69 would be that, just as an enforcer has a choice of prosecuting a business either through the courts or on the basis of an administrative penalty, the business, too, would have the right to opt to be dealt with in the courts if it so wished. When we tabled our original amendment, the Minister objected on the basis of a practical concern rather than a matter of principle. He was concerned that a business might simply play a waiting game and, after a long negotiation within the business penalties approach, decide to require the matter to be dealt with in court. That was never our intention. We always envisaged that this would be a relatively speedy action by the business. For this reason, our new amendment requires the business, within 14 days of being served with a notice of intent to issue a penalty, to advise that it wishes to have the matter dealt with in the courts. That would enable those with responsibility for such matters within the business to be properly appraised but would not allow for last-minute decisions. The amendment would achieve two aims, one direct and one indirect. The direct one is to provide a degree of equity for the business by placing it on a par with enforcers in having a choice of going to court if the enforcer has opted not to go down that route. In turn, this would have the important effect of ensuring that enforcers do not use the business penalties route simply because their case is less certain than would be required in court. The Bill makes it clear that the required level of proof for a civil penalty of this kind is beyond reasonable doubt. If enforcers are aware that the case may end up in court, this will serve to ensure that they do not propose civil penalties unless they are certain they have such a level of proof. The indirect aim to which I referred is that the amendment will help ensure the whole system is fair. We have criticised the Bill for failing to offer the opportunity for an accused to make representations to an independent person prior to being convicted. We still believe this should be included in the Bill to make the civil penalties regime coherent in itself. However, acceptance of the amendment would go some way to alleviating that problem because the accused would have the opportunity to opt for court and thus for an independent judgment if desired.