MLR1PP10050 - Penalties Guidance: Behaviour based penalty reductions

There are no specific requirements in the Regulations which oblige us to give penalty reductions once an appropriate penalty has been calculated.

We believe however that allowing reductions to the starting penalty will encourage compliant behaviour and discourage future non-compliance. This is ultimately the purpose of penalties.

This means that once the penalty starting point has been calculated using the penalty framework, this will not in the vast majority of circumstances be the final financial penalty or fine.

The final penalty will depend on both the behaviours currently being demonstrated by the business and its history of compliance with the 2001, 2003 and 2007 Regulations.

Behaviours are best understood as the willingness and actions a business takes in order to become compliant and how these behaviours are demonstrated to us as supervisor. This will include how businesses respond to the advice, warning letters or penalties we have issued.

We will take all these factors into account when determining the level of any reduction to the penalty starting point which we are prepared to allow. In practice this means that within the context of both a common sense and legal understanding of what constitutes different behaviours, the onus is on a business to demonstrate to us that any breach was a result of:

• Genuine mistake or misunderstanding, rather than neglect
• Neglect rather than deliberate non-compliance