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Improving Compliance among Businesses

In 2006, Richard Macrory, a barrister and professor of environmental law, was asked to look at what could be done to improve compliance among UK businesses.

The majority of businesses in the UK comply with any regulations that apply to their organisation, but too many don’t. The Macrory Review looked at the main reasons businesses were not compliant, and what could be done to address the situation.

Macrory’s final report (PDF) was published in November 2006 and made nine recommendations. These aimed to ensure regulators had a set of modern and flexible sanctions to use that were proportionate and appropriate to the risks faced.

What does the report recommend?

Macrory recommended:

  • that the Government review the drafting and formulation of any criminal offences relating to regulatory non-compliance
  • the design of sanctions in line with the penalty principles and characteristics outlined in the review
  • giving criminal courts new powers to punish regulatory offences
  • introducing new financial penalties as an intermediate sanction
  • improving the system of statutory notices
  • introducing a new type of sanction: enforceable undertakings and undertakings plus
  • considering pilot schemes to gain restorative justice for regulatory non-compliance
  • making available alternative sentencing options in criminal courts
  • introducing new measures to improve transparency and accountability, including:
  • a working group of regulators to share best practice
  • publishing enforcement activities on a regular basis

The Government accepted the report’s nine recommendations in full, some of which are being taken forward by the Regulatory Enforcement and Sanctions Act 2008:

  • fixed monetary penalties
  • discretionary requirements including:
  • variable monetary penalties
  • compliance notices
  • restoration notices
  • variable monetary penalties with voluntary undertakings
  • stop notices
  • enforcement undertakings

Call for evidence

As part of the review, Macrory issued a call for evidence on 7 December 2005 and published a consultation document ‘Regulatory Justice: Sanctioning in a Post Hampton World (PDF)’ in May 2006 based on the responses. This paper offered initial analysis of UK penalties practice, and proposed options for reform.