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Water Bill [HL]


Water Bill [HL]
Part 2 — New regulatory arrangements, etc

    58

 

“Financial penalties

       22A            Penalties

           (1)           Where the Authority is satisfied—

                  (a)                 in the case of any company holding an appointment under

Chapter 1 of this Part, that the company—

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                        (i)                        has contravened or is contravening any condition of the

appointment;

                        (ii)                       has caused or contributed to, or is causing or

contributing to, a contravention by a company holding

a licence under Chapter 1A of this Part of any condition

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of the licence; or

                        (iii)                      has failed or is failing to achieve any standard of

performance prescribed under section 38(2) or 95(2)

below; or

                  (b)                 in the case of any company holding a licence under Chapter 1A

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of this Part, that the company—

                        (i)                        has contravened or is contravening any condition of the

licence; or

                        (ii)                       has caused or contributed to, or is causing or

contributing to, a contravention by a company holding

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an appointment under Chapter 1 of this Part of any

condition of the appointment,

                                       the Authority may, subject to section 22C below, impose on the

company a penalty of such amount as is reasonable in all the

circumstances of the case.

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           (2)           Where the Authority, the Secretary of State or the Assembly is

satisfied—

                  (a)                 in the case of any company holding an appointment under

Chapter 1 of this Part, that the company—

                        (i)                        has contravened or is contravening any statutory or

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other requirement which is enforceable under section 18

above and in relation to which he or it is the enforcement

authority; or

                        (ii)                       has caused or contributed to, or is causing or

contributing to, a contravention by a company holding

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a licence under Chapter 1A of this Part of any such

requirement; or

                  (b)                 in the case of any company holding a licence under Chapter 1A

of this Part, that the company—

                        (i)                        has contravened or is contravening any statutory or

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other requirement which is enforceable under section 18

above and in relation to which he or it is the enforcement

authority; or

                        (ii)                       has caused or contributed to, or is causing or

contributing to, a contravention by a company holding

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an appointment under Chapter 1 of this Part of any such

requirement,

                         he or it may, subject to section 22C below, impose on the company a

penalty of such amount as is reasonable in all the circumstances of the

case.

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Water Bill [HL]
Part 2 — New regulatory arrangements, etc

    59

 

           (3)           In a case in which—

                  (a)                 subsection (1) above applies by virtue of paragraph (a)(ii) or

(b)(ii) of that subsection, or

                  (b)                 subsection (2) above applies by virtue of paragraph (a)(ii) or

(b)(ii) of that subsection,

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                         references in the following provisions of this section and sections 22B

and 22C below to a contravention include references to causing or

contributing to a contravention.

           (4)           Before imposing a penalty on a company under subsection (1) or (2)

above the Authority, the Secretary of State or the Assembly (the

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“enforcement authority”) shall give notice—

                  (a)                 stating that it proposes to impose a penalty and the amount of

the penalty proposed to be imposed;

                  (b)                 setting out the condition, requirement or standard of

performance in question;

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                  (c)                 specifying the acts or omissions which, in the opinion of the

enforcement authority, constitute the contravention or failure in

question and the other facts which, in the opinion of the

enforcement authority, justify the imposition of a penalty and

the amount of the penalty proposed; and

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                  (d)                 specifying the period (not being less than twenty-one days from

the date of publication of the notice) within which

representations or objections with respect to the proposed

penalty may be made,

                                       and shall consider any representations or objections which are duly

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made and not withdrawn.

           (5)           Before varying any proposal stated in a notice under subsection (4)(a)

above the enforcement authority shall give notice—

                  (a)                 setting out the proposed variation and the reasons for it; and

                  (b)                 specifying the period (not being less than twenty-one days from

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the date of publication of the notice) within which

representations or objections with respect to the proposed

variation may be made,

                                       and shall consider any representations or objections which are duly

made and not withdrawn.

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           (6)           As soon as practicable after imposing a penalty, the enforcement

authority shall give notice—

                  (a)                 stating that he or it has imposed a penalty on the company and

its amount;

                  (b)                 setting out the condition, requirement or standard of

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performance in question;

                  (c)                 specifying the acts or omissions which, in the opinion of the

enforcement authority, constitute the contravention or failure in

question and the other facts which, in the opinion of the

enforcement authority, justify the imposition of the penalty and

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its amount; and

                  (d)                 specifying a date, no earlier than the end of the period of forty-

two days from the date of service of the notice on the company,

by which the penalty is required to be paid.

 

 

Water Bill [HL]
Part 2 — New regulatory arrangements, etc

    60

 

           (7)           The company may, within twenty-one days of the date of service on it

of a notice under subsection (6) above, make an application to the

enforcement authority for him or it to specify different dates by which

different portions of the penalty are to be paid.

           (8)           Any notice required to be given under this section shall be given—

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                  (a)                 by publishing the notice in such manner as the enforcement

authority considers appropriate for the purpose of bringing the

matters to which the notice relates to the attention of persons

likely to be affected by them;

                  (b)                 by serving a copy of the notice on the company;

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                  (c)                 by serving a copy of the notice on the Council; and

                  (d)                 where the notice is given by the Secretary of State or the

Assembly, by serving a copy of the notice on the Authority.

           (9)           Any sums received by the enforcement authority by way of penalty

under this section shall be paid into the Consolidated Fund.

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           (10)          The power of the enforcement authority to impose a penalty under this

section is not exercisable in respect of any contravention or failure

before the commencement of this section.

           (11)          No penalty imposed by an enforcement authority under this section

may exceed 10% of the turnover of the company (determined in

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accordance with provisions specified in an order made, after consulting

the Assembly, by the Secretary of State).

           (12)          An enforcement authority shall not impose a penalty under this section

where it is satisfied that the most appropriate way of proceeding is

under the Competition Act 1998.

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       22B            Statement of policy with respect to penalties

           (1)           Each enforcement authority shall prepare and publish a statement of

policy with respect to the imposition of penalties and the determination

of their amount.

           (2)           In deciding whether to impose a penalty, and in determining the

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amount of any penalty, in respect of a contravention or failure an

enforcement authority shall have regard to his or its statement of policy

most recently published at the time when the contravention or failure

occurred.

           (3)           An enforcement authority may revise his or its statement of policy and

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where he or it does so shall publish the revised statement.

           (4)           Publication under this section shall be in such manner as the

enforcement authority considers appropriate for the purpose of

bringing the matters contained in the statement of policy to the

attention of persons likely to be affected by them.

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           (5)           An enforcement authority shall undertake such consultation as he or it

considers appropriate when preparing or revising his or its statement

of policy.

 

 

Water Bill [HL]
Part 2 — New regulatory arrangements, etc

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       22C            Time limits on the imposition of financial penalties

           (1)           Where no final or provisional order has been made in relation to a

contravention or failure, an enforcement authority may not impose a

penalty in respect of the contravention or failure later than the end of

the period of twelve months from the time of the contravention or

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failure, unless before the end of that period—

                  (a)                 the notice under section 22A(4) above relating to the penalty is

served on the company under section 22A(8) above; or

                  (b)                 a notice relating to the contravention or failure is served on the

company under section 203(2) below.

10

           (2)           Where a final or provisional order has been made in relation to a

contravention or failure, an enforcement authority may not impose a

penalty in respect of the contravention or failure unless the notice

relating to the penalty under section 22A(4) above was served on the

company under section 22A(8) above—

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                  (a)                 within three months from the confirmation of the provisional

order or the making of the final order; or

                  (b)                 where the provisional order is not confirmed, within six months

from the making of the provisional order.

       22D            Interest and payment of instalments

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           (1)           If the whole or any part of a penalty is not paid by the date by which it

is required to be paid, the unpaid balance from time to time shall carry

interest at the rate for the time being specified in section 17 of the

Judgments Act 1838.

           (2)           If an application is made under subsection (7) of section 22A above in

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relation to a penalty, the penalty is not required to be paid until the

application has been determined.

           (3)           If the enforcement authority grants an application under that

subsection in relation to a penalty but any portion of the penalty is not

paid by the date specified in relation to it by the enforcement authority

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under that subsection, the enforcement authority may where he or it

considers it appropriate require so much of the penalty as has not

already been paid to be paid immediately.

       22E            Appeals

           (1)           If the company on which a penalty is imposed is aggrieved by—

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                  (a)                 the imposition of the penalty;

                  (b)                 the amount of the penalty; or

                  (c)                 the date by which the penalty is required to be paid, or the

different dates by which different portions of the penalty are

required to be paid,

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                                       the company may make an application to the court under this section.

           (2)           An application under subsection (1) above must be made—

                  (a)                 within forty-two days from the date of service on the company

of a notice under section 22A(6) above, or

                  (b)                 where the application relates to a decision of an enforcement

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authority on an application by the company under section

 

 

Water Bill [HL]
Part 2 — New regulatory arrangements, etc

    62

 

                  (b)                 22A(7) above, within forty-two days from the date the company

is notified of the decision.

           (3)           On any such application, where the court considers it appropriate to do

so in all the circumstances of the case and is satisfied of one or more of

the grounds falling within subsection (4) below, the court—

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                  (a)                 may quash the penalty;

                  (b)                 may substitute a penalty of such lesser amount as the court

considers appropriate in all the circumstances of the case; or

                  (c)                 in the case of an application under subsection (1)(c) above, may

substitute for the date or dates imposed by the enforcement

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authority an alternative date or dates.

           (4)           The grounds falling within this subsection are—

                  (a)                 that the imposition of the penalty was not within the power of

the enforcement authority under section 22A above;

                  (b)                 that any of the requirements of subsections (4) to (6) or (8) of

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section 22A above have not been complied with in relation to

the imposition of the penalty and the interests of the company

have been substantially prejudiced by the non-compliance; or

                  (c)                 that it was unreasonable of the enforcement authority to require

the penalty imposed, or any portion of it, to be paid by the date

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or dates by which it was required to be paid.

           (5)           If an application is made under this section in relation to a penalty, the

penalty is not required to be paid until the application has been

determined.

           (6)           Where the court substitutes a penalty of a lesser amount it may require

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the payment of interest on the substituted penalty at such rate, and

from such date, as it considers just and equitable.

           (7)           Where the court specifies as a date by which the penalty, or a portion of

the penalty, is to be paid a date before the determination of the

application under this section it may require the payment of interest on

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the penalty, or portion, from that date at such rate as it considers just

and equitable.

           (8)           Except as provided by this section, the validity of a penalty shall not be

questioned by any legal proceedings whatever.

           (9)           In this section “the court” means the High Court.

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       22F            Recovery of penalties

      Where a penalty imposed under section 22A(1) or (2) above, or any

portion of it, has not been paid by the date on which it is required to be

paid and—

                  (a)                 no application relating to the penalty has been made under

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section 22E above during the period within which such an

application can be made; or

                  (b)                 an application has been made under that section and

determined,

                  the enforcement authority may recover from the company, as a civil

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debt due to him or it, any of the penalty and any interest which has not

been paid.”

 

 

Water Bill [HL]
Part 2 — New regulatory arrangements, etc

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     (2)    In section 195 of the WIA (keeping of a register), in subsection (2), the “and” at

the end of paragraph (d) is omitted, and after paragraph (e) there is inserted—

                  “(f)                    every penalty imposed under section 22A(1) or (2) above and

every notice under section 22A(6) above;”.

 48    Enforcement of certain provisions

5

     (1)    The WIA is amended as follows.

     (2)    In section 18 (orders for securing compliance with certain provisions of the

Act)—

           (a)           in subsection (1)(b), for “has contravened any such condition or

requirement and is likely to do so again” there is substituted “is likely

10

to contravene any such condition or requirement”;

           (b)           for subsection (4)(a)(ii) there is substituted—

                               “(ii)                                 is likely to contravene any such condition or

requirement;”.

     (3)    In section 20 (procedure for orders made under section 18), in subsections (1)(c)

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and (4)(b), for “twenty-eight” there is substituted “twenty-one”.

     (4)    Subsection (3) does not have effect in relation to—

           (a)           a provisional order which has been made before the commencement of

that subsection; or

           (b)           a final order in respect of which notice has been given under section

20

20(1) of the WIA before the commencement of that subsection.

Remuneration and standards of performance

 49    Links between directors’ pay and standards of performance

After section 35 of the WIA there is inserted—

“Disclosure of arrangements for remuneration

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       35A            Remuneration and standards of performance

           (1)           This section applies to any company holding an appointment under

Chapter 1 of this Part.

           (2)           As soon as reasonably practicable after the end of each financial year of

the company it must make a statement to the Authority—

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                  (a)                 disclosing whether or not remuneration has been paid or

become due during that financial year to the directors of the

company as a result of arrangements falling within subsection

(3) below; and

                  (b)                 where such remuneration has been paid or become due,

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describing the arrangements and the remuneration.

           (3)           Arrangements fall within this subsection if they are arrangements for

linking the remuneration of the directors of the company to standards

of performance in connection with the carrying out by the company of

the functions of a relevant undertaker.

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Water Bill [HL]
Part 2 — New regulatory arrangements, etc

    64

 

           (4)           A description under subsection (2)(b) above must include in

particular—

                  (a)                 a statement of when the arrangements were made;

                  (b)                 a description of the standards of performance in question;

                  (c)                 an explanation of the means by which the standards of

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performance are assessed; and

                  (d)                 an explanation of how the remuneration was calculated.

           (5)           The statement required by subsection (2) above must also state—

                  (a)                 whether or not there are in force in respect of the financial year

during which the statement is made arrangements falling

10

within subsection (3) above; or

                  (b)                 if not, whether the company intends that such arrangements

will be in force at some time during that financial year,

                                       and if there are, or it is intended that there will be, such arrangements

in force the statement must describe those arrangements.

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           (6)           A description under subsection (5) above must—

                  (a)                 include in particular the matters listed in subsection (4)(a), (b)

and (c) above; and

                  (b)                 where the arrangements described are different from any

arrangements described under subsection (2)(b) above, state the

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likely effect of those differences on the remuneration of each

director of the company.

           (7)           The statement required by subsection (2) above must be made to the

Authority in such manner as may be required by the Authority.

           (8)           The statement required by subsection (2) above—

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                  (a)                 must be published by the company making the statement in

such manner as it reasonably considers will secure adequate

publicity for it; and

                  (b)                 may be published by the Authority in such manner as it may

consider appropriate.

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           (9)           The duty of a company under this section applies in respect of any

person who has at any time been a director of the company.

           (10)          In this section—

                                  “remuneration” in relation to a director of a company—

                        (a)                        means any form of payment, consideration or other

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benefit (including pension benefit), paid or due to or in

respect of the director; and

                        (b)                        includes remuneration in respect of any of his services

while a director of the company;

                                  “standards of performance” in relation to any company, include

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any standards which are—

                        (a)                        set by or under any conditions of the company’s

appointment under Chapter 1 of this Part;

                        (b)                        contained in or prescribed by regulations made under

section 38(1)(b) or (2) or section 95(1)(b) or (2) below; or

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                        (c)                        set or agreed to by the company.

 

 

 
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Revised 20 February 2003