ENVIRONMENTALCIVIL PENALTIES A More Proportionate Response to Regulatory Breach

Michael WoodsSenior AssociateStephenson Harwoodmichael.woods@shlegal.comwww.ucl.ac.uk/laws/environment/civil-penalty/

What is a Civil Penalty?• The traditional civil/criminal distinction

• Crime and punishment

• “A middle system of law”

• What it is not...

CivilPenalty

A discretionary monetary sum, imposed flexibly under civil law, achieving deterrence and reparation

Regulatory Difficulties

• Over-reliance on criminal prosecution and strict liability

• Trivialisation of offences and inadequate fines

• Regulator reluctance to enforce?

Current

Optimal A more proportionate and responsive approach to regulation

Compliance through discretion and consensus, but…

Current Use of Civil Penalties Abroad

•“Second order violations”

• Benefits recapture

• BEN and SEPs

Germany

•“Inflation” of the criminal law• Ordnungswidrigkeiten• The Öztürk case

USA

Current Use of Civil Penalties in the UK

• Variety of models – growing interest

• Limitations of fixed penalties – inflexible

• OFT – CA 1988 and CAT

• Human Rights – Article 6 “criminal charges”

Benefits from Environmental Civil Penalties

• Preserves the value of the criminal law• Relieves pressure on regulators’ resources• Improved understanding and compliance• Ability to target financial gains and losses• Addresses increased public expectations

Greater Flexibility

Better match between the sanction and moral/financial costs of the offence,leading to improved compliance

Result

A Possible Model

• Environment Agency

When?

How?

What?

Who?

• IPPC, waste and water

• Discretion • Appeals

• Initial limited use• Later review and extension

Report Conclusion

Outcome

• Current system: room for improvement

• Experience of civil penalties: pragmatic and effective

• Regulators and regulated: potentially favourable

Better regulation and a better environment

Reactions

• Environment Agency • Environmental Audit Committee• Government (BRTF)

• Defra• Hampton Report • New legislation - Clean Neighbourhoods and Water Industry

UKELA? Model? Industry/NGO/public feedback? Lobbying?

Issues for Discussion• Regulatory fit – alternative or replacement?

• Type of offences – low-level and/or high level?

• Which regulator(s) – EA, EN, local authorities • Assessing penalty – standard tariff and/or discretionary factors?

• Limits on discretion – statutory cap? not > criminal fine?

• Means of appeal – Magistrates, SoS, ET? plus limited JR?

• Which parties liable – companies, individuals, directors?

• Resources – additional funding and/or hypothecation?

On the principle? On the detail?Consensus?

ENVIRONMENTALCIVIL PENALTIES A More Proportionate Response to Regulatory Breach

Michael WoodsSenior AssociateStephenson Harwoodmichael.woods@shlegal.comwww.ucl.ac.uk/laws/environment/civil-penalty/