The study was carried out by Michael Woods and Professor Richard Macrory of the Centre for Law and the Environment at University College London. It is one of a series of DEFRA-sponsored projects which have examined the case for reforming the structures and processes of environmental law and providing better access to environmental justice. One, by the same team, has already made important proposals for an environmental tribunal (ENDS Report 341, pp 3-4 ).
The new study also fits with the Government's drive for "better regulation" and its emphasis on proportionality. At present, environmental regulators responding to an offence can either serve an enforcement notice or initiate a criminal prosecution - but there is nothing in between to deal with offences which merit more than a notice but something less than criminal sanctions.
The study argues that the current heavy dependence on prosecution is not without its drawbacks. Prosecutions are "frequently difficult and time-consuming, in particular for the regulators with limited resources and for the regulated with their reputation to defend. Using the criminal law entails procedural safeguards and outcomes which can seem inappropriate and heavy-handed where the harm caused is not truly 'criminal' in intent. The end result may often be a fine that takes little account of the costs of rectifying the environmental damage which has been caused."
This is where civil penalties come in. They can be imposed directly by the regulator, working to pre-set limits and guidance on how the individual circumstances of an offence - including the profits made by unlawful actions - should be taken into account. They impose a lesser burden on both parties and imply a lower degree of moral censure than a criminal prosecution. And for the regulator, a major benefit is the lowering of the standard of proof from "beyond reasonable doubt" to "the balance of probabilities".
Civil environmental penalties are used quite widely in several European countries and Australia, with criminal enforcement being reserved for deliberate non-compliance.
The US is best known for its use of civil penalties - mainly because they can reach very high levels. The record was set this year when a pipeline business was hit with a penalty of $34 million, plus upgrading costs of $30 million, following a major oil spill.
A big factor behind the sharp increase in civil penalties in the US after the mid-1980s was the introduction of a computer model which enabled the Environmental Protection Agency to make robust calculations of the economic savings made by polluters by avoiding or deferring spending on pollution control. This made the penalties predictable to all parties and made it easier to settle cases.
The UK already has some experience of civil penalties in areas such as pensions, competition and VAT law. The regulatory bodies usually have discretion as to the level of penalty, albeit often within an absolute or turnover-related ceiling, and with explicit defences or mitigating factors being taken into account in determining the penalty. Appeals against penalties can sometimes be reviewed by a specialist tribunal, but in other cases the only recourse is judicial review.
One body operating such a system is the Occupational Pensions Regulatory Authority, which can impose penalties of up to £50,000 on companies and £5,000 on individuals. It has published guidance which explains what factors it takes into account in determining the level of penalties, including an offender's history of breaches, steps taken to prevent further breaches, any mitigating factors, co-operation with investigations, ability to pay, and so on.
OPRA's procedure after detecting a breach begins with a "statement of facts" which is sent to the offender for comment. A committee of three board members then determines the penalty. The offender may request a review of the penalty by OPRA's board.
OPRA officials interviewed for the study said that their experience with this system had been very positive. "They considered the use of civil penalties to be less resource-intensive and time-pressured than criminal penalties; the co-operation of offending parties was facilitated because the procedure is civil rather than criminal; and the low penalties applied by criminal courts (which had tended not to consider the regulatory breaches as particularly serious) were avoided."
The study puts forward a model for a civil penalty system in the environmental field. It suggests this should: