MLR1PP8840 - Penalties Guidance: Step 3(5): Calculating the additional starting penalty: Stage 4
The fourth stage is to establish the number of relevant clients who were subject to the breaches. In other words these are the relevant clients who were not monitored as a consequence of the breaches.
This is the number of clients subject to the cumulative scale charge. This is explained fully in MLR1PP8950 of this guidance. It is important to note that the cumulative scale charge must not be applied to the total number of relevant clients which may include some clients to whom the Regulations were correctly applied.
Another important point to note is that the application of the scale charge should not be confused with the application of the additional scale charge. The additional scale charge is applied to the total number of relevant clients, not just those clients who were subject to the breaches. See MLR1PP8850 for guidance about identifying relevant clients.