The Law Commission Consultation Paper No 195 CRIMINAL LIABILITY IN REGULATORY CONTEXTS A Consultation Paper ii THE LAW COMMISSION – HOW WE CONSULT About the Law Commission The Law Commission was set up by section 1 of the Law Commissions Act 1965 for the purpose of promoting the reform of the law. The Law Commissioners are: The Rt Hon Lord Justice Munby (Chairman), Professor Elizabeth Cooke, Mr David Hertzell, Professor Jeremy Horder and Miss Frances Patterson QC. The Chief Executive is: Mr Mark Ormerod CB. Address for correspondence: Steel House, 11 Tothill Street, London SW1H 9LJ. Topic of this consultation This consultation paper deals with the use of the criminal law in regulatory contexts, and with some aspects of corporate criminal liability. A summary of the main points can be found in Part 1. Scope of this consultation The purpose of this consultation is to generate responses to our provisional proposals. Geographical scope The contents of this consultation paper refer to the law of England and Wales. Impact assessment An impact assessment is included. Previous engagement N/A. Duration of the consultation We invite responses to our provisional proposals and questions from 25 August 2010 to 25 November 2010. How to respond Send your responses either – By email to: [email protected] OR By post to: address above. Tel: 020-3334-0271 / Fax: 020-3334-0201 If you send your comments by post, it would be helpful if, whenever possible, you could send them to us electronically as well (for example, on CD or by email to the above address, in any commonly used format). After the consultation In the light of the responses we receive, we will decide our final recommendations and we will present them to Parliament. We hope to publish our report by Spring 2012. It will be for Parliament to decide whether to approve any changes to the law. Code of Practice We are a signatory to the Government’s Code of Practice on Consultation and carry out our consultations in accordance with the Code criteria (set out on the next page). Freedom of information We will treat all responses as public documents in accordance with the Freedom of Information Act and we may attribute comments and include a list of all respondents' names in any final report we publish. If you wish to submit a confidential response, you should contact us before sending the response. PLEASE NOTE – We will disregard automatic confidentiality statements generated by an IT system. Availability of this consultation paper You can view/download it free of charge on our website at: http://www.lawcom.gov.uk/docs/cp195.pdf. iii CODE OF PRACTICE ON CONSULTATION THE SEVEN CONSULTATION CRITERIA Criterion 1: When to consult Formal consultation should take place at a stage when there is scope to influence the policy outcome. Criterion 2: Duration of consultation exercise Consultations should normally last for at least 12 weeks with consideration given to longer timescales where feasible and sensible Criterion 3: Clarity and scope of impact Consultation documents should be clear about the consultation process, what is being proposed, the scope to influence and the expected costs and benefits of the proposals. Criterion 4: Accessibility of consultation exercises Consultation exercises should be designed to be accessible to, and clearly targeted at, those people the exercise is intended to reach. Criterion 5: The burden of consultation Keeping the burden of consultation to a minimum is essential if consultations are to be effective and if consultees’ buy-in to the process is to be obtained. Criterion 6: Responsiveness of consultation exercises Consultation responses should be analysed carefully and clear feedback should be provided to participants following the consultation. Criterion 7: Capacity to consult Officials running consultations should seek guidance in how to run an effective consultation exercise and share what they have learned from the experience. CONSULTATION CO-ORDINATOR The Law Commission’s Consultation Co-ordinator is Phil Hodgson. You are invited to send comments to the Consultation Co-ordinator about the extent to which the criteria have been observed and any ways of improving the consultation process. Contact: Phil Hodgson, Consultation Co-ordinator, Law Commission, Steel House, 11 Tothill Street, London SW1H 9LJ – Email: [email protected] Full details of the Government’s Code of Practice on Consultation are available on the BIS website at http://www.bis.gov.uk/policies/better-regulation/consultation-guidance. iv THE LAW COMMISSION CRIMINAL LIABILITY IN REGULATORY CONTEXTS CONTENTS Paragraph Page 1.1 1 PART 1: REGULATION, BUSINESSES AND CRIMINAL LIABILITY 1.1 1 Our terms of reference 1.3 2 What our terms of reference mean for this project The origins of the project 1.3 2 Regulation and criminal liability 1.9 3 The background to the main part of the project 1.17 5 Increasing numbers of criminal offences 1.17 5 Bureaucratic bodies and criminal law-making 1.19 5 Criminal laws created, but then little used 1.25 7 Our provisional proposals and questions 1.28 8 General principles: the limits of criminalisation 1.28 8 General principles: avoiding pointless overlaps between 1.38 10 offences General principles: structure and process 1.44 11 General principles: fault in offences supporting a 1.52 13 regulatory structure Doctrines of criminal liability applicable to businesses 1.60 14 The doctrine of identification 1.62 14 A general defence of due diligence 1.68 15 The consent and connivance doctrine 1.81 17 The delegation doctrine 1.88 18 2.1 20 PART 2: REGULATION AND PUBLIC INTEREST OFFENCES Criminal law and regulation 2.1 20 The role of public interest offences 2.3 20 Regulation and public interest offences 2.3 20 Comparing driving and car ownership, and 2.10 22 cycling and bicycle ownership The example of knife crime 2.21 25 Conclusion on public interest offences 2.24 26 v Paragraph Page 3.1 27 PART 3: CRIMINAL WRONGDOING AND REGULATION Introduction: is there simply too much criminal law? 3.1 27 Our approach in brief 3.2 27 Two quick fixes assessed 3.16 29 Is it simply a question of numbers? 3.16 29 A general category of administrative offence? 3.21 31 Against a general administrative offence 3.28 32 regime Criminal proceedings and regulatory law 3.38 35 A procedural understanding of criminal offences 3.38 35 Should criminal offences and regulatory offences be 3.43 36 distinguished? The use of the criminal law in regulatory contexts 3.52 39 Context 1: truancy and the Education Act 1996 3.53 39 The regulatory element 3.54 39 The statutory offences 3.56 40 The relationship of the regulatory element to the 3.67 42 statutory offences Our analysis 3.70 43 Context 2: illegal use of migrant workers 3.72 44 The traditional single offence approach 3.73 44 The modified approach 3.77 45 Our analysis 3.82 46 Context 3: promoting product safety 3.83 46 Offences and defences in the Consumer 3.84 47 Protection Act 1987 Regulatory intervention under the Consumer 3.89 48 Protection Act 1987 Two approaches to relating regulation to criminal 3.97 50 law The compliance argument, in relation to 3.103 52 European law Our analysis 3.109 53 Overlapping, duplication and placement of offences 3.113 54 Attempts to commit crimes 3.115 54 Assisting and encouraging crime 3.121 55 Fraud and fraud-like offences 3.123 56 Inappropriate placement of offences 3.129 58 Lessons from the examples 3.136 59 General principles: the limits of criminalisation 3.137 59 General principles: avoiding pointless overlaps between 3.140 60 offences General principles: structure and process 3.142 60 The limits of criminalisation: when, and by whom, should criminal 3.144 60 offences be created? Appearance and reality 3.146 61 vi Paragraph Page Conclusion 3.155 62 Appealing against regulatory measures 3.159 63 4.1 67 PART 4: CONSISTENCY AND PRINCIPLE IN USING FAULT ELEMENTS Fault and the role of the criminal law in regulation 4.1 67 Moral wrongdoing and harm 4.6 68 Criminal wrongdoing and moral wrongdoing 4.6 68 Criminal wrongdoing and harm 4.19 70 General considerations 4.19 70 Is it crucial how much harm, or risk of harm, was 4.26 71 involved? Risk-based offences 4.33 73 How useful really is the harm principle? 4.39 74 The element of moral wrongdoing in criminal wrongdoing 4.41 74 Fault requirements that reflect moral wrongdoing 4.41 74 Proportionate fault elements and criminalisation 4.57 78 Proportionality illustrated: (not) providing information 4.62 79 The significance of the issue 4.62 79 A principled approach 4.67 80 The Pensions Act 2004 4.69 80 The Local Transport Act 2008 4.70 81 The Medicines Act 1968 4.72 81 The Eggs and Chicks Regulations 2008 4.74 82 The Education and Skills Act 2008 4.78 83 Conclusion 4.81 84 Securing consistency in all regulatory contexts 4.82 84 5.1 86 PART 5: STATUTORY INTERPRETATION AND THE STATUS OF THE IDENTIFICATION DOCTRINE Introduction 5.1 86 The identification doctrine 5.8 88 The emergence of the identification doctrine in common law 5.13 89 Liability for mens rea offences: before the identification 5.14 89 doctrine Origins of the identification doctrine 5.14 89 The 1944 cases: personal criminal liability for companies 5.16 89 Director of Public Prosecutions v Kent & Sussex 5.17 90 Contractors Ltd R v ICR Haulage Ltd 5.21 90 Moore v I Bresler Ltd 5.25 91 Development of the doctrine 5.30 92 Tesco Supermarkets Ltd v Nattrass 5.34 93 The facts 5.35 94 vii Paragraph Page The decision 5.38 94 Commentary 5.45 96 After Nattrass 5.48 96 R v Andrews Weatherfoil