Clause 54

Part of Regulatory Enforcement and Sanctions Bill [Lords] – in a Public Bill Committee at 9:30 am on 19 June 2008.

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Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee 9:30, 19 June 2008

It is important to pause on clause 54 because much reference was made during our debates here, but also in the other place, to the judicial protections for people who are subject to the regulations. Clause 54 requires that appeals under part 3 of the Bill must be heard by either the first-tier tribunal or another statutory tribunal specified by the Minister in the order made under that part. An appeal to such tribunals provides an important safeguard for businesses against the misuse of the civil sanctions. These tribunals are independent, impartial and highly qualified to review a regulator’s sanctioning decision.

Professor Macrory, to whom I have referred a lot, found in his report a number of advantages in routing appeals against the new sanctions to a specialist, expert tribunal, rather than to the courts. First, that will allow the criminal courts to concentrate on those issues that warrant prosecution rather than adjudicating on civil appeals. Secondly, tribunals can comprise members with legal and specialist expertise in the subject matter before the tribunal, thereby providing the tribunal on some occasions with a fuller understanding of the regulatory issues. In another part of my work, I am the Minister for employment relations, and have contact with the employment tribunals, where the role of these wing members, as they are sometimes referred to, or expert members, is often highly valuable. Regulatory cases could be concentrated through one tribunal under the first-tier tribunals heading as well, enabling expertise to be built up over time. For example, in the cases of regulatory non-compliance in magistrates courts, they make up less than 1 per cent. of all the cases, so it is difficult to provide specific training to magistrates and legal advisers for a field of law that, in percentage terms, is a small part of their work. This gives us the capacity to build up over time significant concentrated expertise.

We have talked about small businesses, and it is also the case that tribunals rather than courts may often encourage small businesses to exercise their rights of appeal without the need for expensive legal representation.  As I said, our preferred venue for such appeals is the first tier of a tribunal, which is created by the Tribunals, Courts and Enforcement Act 2007. The first-tier tribunal will be launched later this year, and most existing tribunal jurisdictions, such as the transport tribunal, the information tribunal and the gambling appeals tribunal, will eventually transfer across to become part of this. These jurisdictions will be grouped together to form different chambers, and it is expected that a regulatory chamber will hear appeals against sanctions for regulatory non-compliance.

Most of the detail concerning composition, functions, procedures and powers and so on is contained in the 2007 Act rather than in this Bill, but I want to make it clear to the Committee that this is the vehicle that we see as dealing with appeals. The tribunal will have legal members who are professionally qualified in appropriate fields, and other experts. The composition of a tribunal for a particular field will be determined partly by statutory orders to be made by the Lord Chancellor, specifying qualifications and numbers, and partly by the senior president of tribunals and other judicial leaders. I should stress that regulators and their sponsoring Departments will not have any influence in such matters: the independence of the tribunal panel is further guaranteed by section (1) of the 2007 Act, which extends the courts’ statutory guarantee of independence under the Constitutional Reform Act 2005 to the tribunals.

There is an exception to all this in clause 54 (1)(b), which says that the appeal could be held by

“another tribunal created under an enactment.”

That is to take account of the fact that a number of statutory tribunals will not be transferring. The employment tribunals are a good example of that. They currently hear, for example, some health and safety appeals, so that is covered by subsection (1)(b). However, they have similar characteristics and safeguards to the first-tier tribunal.

Subsection (2) makes it clear that statutory tribunals only, not ordinary courts of law, can be specified. However, they have similar characteristics and safeguards to a first-tier tribunal. Subsection (3)(a) allows the Minister, when setting out the power, to make provision for the suspension of the effect of a fixed penalty or other requirement during an appeal. A person could apply for a stop notice to be suspended pending the result of an appeal. If that application is unsuccessful, the notice will remain in force during the appeal. However, should the person appeal, the effect of the stop notice can be automatically suspended until the result is known.

Subsection (3)(b) enables the Minister to make provision about the powers of the tribunal. Examples of those powers are set out in subsection (4), which details that the tribunal may

“withdraw the requirement or notice...confirm the requirement or notice...take such steps as the regulator could take in relation to the act” or

“remit the decision...to the regulator”.

The Bill is not prescriptive about the powers of the tribunal, because a tribunal may have existing powers. Detailed rules governing the exercise of the powers will be provided in the tribunal procedural rules that will be  made under existing provisions of other Acts—I have mentioned the Act that establishes such things.

The clause is an important part of the machinery. We have talked a lot in our debates on this part of the Bill about the different enforcement options available to regulators, such as fixed monetary penalties, variable monetary penalties, stop notices, restoration acts, restoration notices and so on. The rights of appeal that we are talking about to deal with the problem of judge and jury being one are set out in the clause.

I hope that is helpful in assuring members of the Committee that the measure is a robust and important part of the enforcement mechanism.