1. ENVIRONMENTAL CIVIL PENALTIES A More Proportionate Response to Regulatory Breach Michael Woods Senior Associate Stephenson Harwood michael.woods@shlegal.com www.ucl.ac.uk/laws/environment/civil-penalty/

2. What is a Civil Penalty? The traditional civil/criminal distinction Crime and punishment “A middle system of law” What it is not... Civil Penalty A discretionary monetary sum, imposed flexibly under civil law, achieving deterrence and reparation

3. 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…

4. 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

5. 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”

6. 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

7. A Possible Model Environment Agency When? How? What? Who? IPPC, waste and water Discretion Appeals Initial limited use Later review and extension

8. 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

9. 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?

10. 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?

11. ENVIRONMENTAL CIVIL PENALTIES A More Proportionate Response to Regulatory Breach Michael Woods Senior Associate Stephenson Harwood michael.woods@shlegal.com www.ucl.ac.uk/laws/environment/civil-penalty/