From 4 January 2011, for some offences in area of waste,
including waste packaging, the main environmental regulator in
England and Wales, the Environment Agency ("the Agency")
has announced that it may use civil sanctions to deal with breaches
of environment law. Whilst supplementing rather than replacing
existing enforcement options such as criminal prosecution and
introducing more flexibility, uncertainty and challenge may arise
during the introductory period as and when the new sanctions are
applied. It is anticipated that environmental permitting will be
brought into the civil sanction regime after April 2011.
The Regulatory Enforcement and Sanctions Act 2008 (the "RES
Act") introduced alternative civil sanctions that could under
certain conditions be provided to regulators. Having met the
conditions, in 2010 the Agency were granted the powers pursuant to
separate Orders in England and in Wales. In order to provide some
certainty and clarity in approach, following consultation (see
earlier
Law-Now) the Agency published a revised statement on
Enforcement and Sanctions, guidance (the "Guidance") and
offence response options which also came into force for enforcement
decisions on 4 January 2011.
Click here for links to the documents.
The Agency statement identifies that the aim is to use civil and
criminal sanctions in a manner appropriate to the precise offence
and as set out in the Guidance. As RES Act civil sanctions are not
available for all environment related offences and where they
apply, not all of the sanctions may be available, the
available sanction for each offence is listed in the offence
options response document.
The Agency has indicated that the sanctions will initially mainly
be used in the hazardous waste, waste resources and waste packaging
sectors for offences committed in England after 6 April 2010 and in
Wales after 15 July 2010 (when the Orders came into force).
Recap of the RES Act civil sanctions
Fixed Monetary Penalties (FMPs)
These are fixed penalties which the Agency consider suitable for offences with minor or no direct environmental impact such as paperwork or administration offences. FMPs are set at £300 for business and £100 for individuals with discounts for early payment.
Variable Monetary Penalties (VMPs)
These are monetary penalties which may be imposed for more serious offences. The Agency has published methodology to set the level of VMP. VMPs may be used instead of criminal sanctions (i.e. avoiding a conviction) where the Agency considers that a financial penalty may change offender behaviour or will remove a financial gain or saving resulting from the non-compliance. The Guidance notes that where an offence is classed as a Category 2 CCS (compliance classification scheme) incident a prosecution, formal caution or VMP would normally be considered. Large VMPs are likely to be promptly challenged (VMPs may be as high as £250,000) in relation to the size of the penalty and the standard of proof required. Further detail is provided in Annex 1 of the Guidance.
Compliance Notices
These may be used where a party is not considered to be meeting their legal obligations and a formal notice is required to secure compliance. Compliance Notices can be combined with a VMP and a Restoration Notice.
Restoration Notices
These require the offender to take steps to put right any damage caused as a result of the non-compliance and to address any harm. They can be deployed where damage has been caused and the action required to address the damage has been identified. They can be combined with a VMP and a Compliance Notice.
Stop Notices
A Stop Notice may be used:-
a) to immediately stop an activity that is causing or presents a
significant risk of causing serious harm to human health and the
environment and where a specified offence is being or is likely to
be committed;
b) to immediately stop an activity that is likely to be carried on
that will cause or will present a significant risk of causing
serious harm to human health or the environment and the activity
likely to be carried on involves or will be likely to involve a
specified offence being committed.
There is a fast track procedure for the appeal of Stop Notices. In
certain circumstances where a Stop Notice has been served and
subsequently withdrawn, the Agency must compensate a person, if as
a result of the service of the notice or the refusal of a
completion certificate, that person has suffered loss. Notices
could be withdrawn, for example, because the decision to serve the
notice was unreasonable or any step specified was unreasonable; if
the Agency was in breach of statutory obligations; or if the notice
is successfully appealed and the First Tier Tribunal finds that the
service was unreasonable or the refusal of a completion certificate
is appealed and the First Tier Tribunal finds that the refusal was
unreasonable.
Enforcement Undertakings
This type of undertaking is a legally binding voluntary agreement offered by those who may have committed an offence which is accepted by the Agency. Enforcement undertakings can only be accepted where the Agency has reasonable grounds to suspect that a specified offence has been committed and if there is sufficient confidence that the undertaking will be fulfilled. The Guidance states that the Agency will be unlikely to accept them where it has been decided that a prosecution is required or if they are already in discussion as to the level of a VMP in a particular case. Clauses denying liability will not be permitted. It is expected that the terms of an undertaking will normally contain an element of restoration together with steps to ensure future compliance. An example form has been prepared by the Agency alongside additional related guidance. Once the terms have been complied with, a party may apply to the Agency for a completion certificate evidencing that the undertaking has been completed. Further detail is at Annex 2 of the Guidance.
Procedure for the application of the sanctions
The requirements and procedures for the application of the RES Act civil sanctions are supplemented by the Environmental Civil Sanctions (England) Order 2010 and the Environmental Civil Sanctions (Wales) Order 2010 and amending regulations. The Agency has stated that it "will adopt high levels of propriety throughout our procedures in respect of the use of civil sanctions" which includes ensuring that an offender who receives a Notice of Intent for a civil sanction has similar safeguards to an offender who is prosecuted such as disclosure of the facts behind the proposed sanction, disclosure of unused material and consideration of representations. Representations may be made to the Agency within specified time periods following which the proposed sanction may be imposed (and subsequently appealed to the First Tier Tribunal) or varied or not imposed as appropriate.
Enforcement Cost Recovery Notices (ECRN)
The Agency may serve ECRNs requiring payment of their costs up to the time of imposition of most civil sanctions and there is a right of appeal. However, an ECRN may not be served where a FMP is imposed. Where an Enforcement Undertaking is offered the Agency are not entitled to recover costs but have stated that they will look more favourably on those which offer a contribution towards costs.
Non–Compliance Penalties (NCP)
Where an offender fails to comply with a Compliance Notice, Restoration Notice or Third Party Undertaking (a more limited type of undertaking used to make an offer to compensate someone who has been affected by the offence) the Agency may impose a NCP. The NCP will be based on the assessment of the costs of complying with the original sanction or Third Party Undertaking with a percentage deducted or added depending on the reasons for the non compliance. Further, the Agency may choose to either serve a NCP or prosecute for failure to comply with a Compliance or Restoration Notice. There is a right of appeal against the imposition of a NCP.
Appeals
The Guidance clarifies that the RES Act sanctions cannot be imposed where:
- the offence is not specified as having a RES Act sanction available;
- the offence does not have a particular sanction available;
- no offence has been committed;
- it is not possible for the offence to be proved beyond reasonable doubt; or
- representations indicate a defence is available.
Where a sanction can be imposed the grounds of appeal include:
- the decision was based on an error of fact;
- the decision was wrong in law;
- the decision was unreasonable; the amount is unreasonable; or
- any other reason (or in Wales, any similar reason).
The General Regulatory Chamber of the First Tier Tribunal deals with the above appeals. The Tribunal has issued forms and guidance.
Implications
Whilst the range of offences to which the sanctions may presently be applied is limited, following a bedding in period it is likely that the use of sanctions will grow in order to assist the proposed "outcome focused" regulation. Consistency in approach across different geographical areas may become subject to scrutiny and sectors that may be affected should keep abreast of developments in operational practice to assess both the exposure and the benefits the potential use of civil sanctions may bring.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 07/01/2011.
