When the regulator knocks, will you be ready? - Nabarro

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4 Have you undertaken training in the following areas 70% 60% 50% 40% 30% 20% 10% 10% 11%11% 68% 10% 10% 10% 70% 69% 32% 31% 22% 11% 15% 9% 11% In the last 6 months In the last year More than a year ago Never 43% 13% 10% 34% 60% 18% 10% 12% Competition Diversity Environment Health & Safety Money laundering Pensions Aside from the areas of health and safety and money laundering, in all other cases over 60% of our respondents had never trained their staff about compliance with regulatory responsibilities. This is despite potentially ruinous penalties and reputational risks posed by failure to comply with the watchdogs. To illustrate the penalties of non-compliance - and therefore the importance of getting it right - on the opposite page are a few examples of recent enforcement actions.
When the regulator knocks, will you be ready Survey 2008 ENFORCEMENT ACTION Competition The potential penalties for non-compliance with UK and EU competition laws include fines of up to 10% of annual group turnover; invalidity of agreements; damages claims; personal fines and imprisonment for individuals involved in cartels, in some cases; and company directors can be disqualified. Diversity If an employer loses an unfair dismissal case at an employment tribunal, an order can be made for re-instatement of the claimant, re-engagement on similar terms or financial compensation. Financial compensation is by far the most common, and there are no limits on the amounts that tribunals can award in cases of discrimination. Employers have been advised to strengthen anti-discrimination and equality policies following large awards. Environment The courts are taking environmental damage more seriously. In their 2006 environmental performance review the Environment Agency reported that successful prosecutions against companies totalled over £3.5 million in fines (with an average of £11,800) compared to £2.7 million in 2005 (with an average of £8,600). The biggest offender was Thames Water, which was fined £191,600 for 15 events. In all, 380 individuals were prosecuted, including 29 company directors. Six directors were fined £5,000 or more and five received other penalties, including two custodial sentences totalling 14 months. Pensions The Pensions Regulator has the power to investigate schemes, require remedial steps to be taken and act against employers who seek to sidestep their pension obligations. The watchdog has the power to take action, on behalf of a scheme, to recover unpaid contributions from the employer, freeze or wind-up a scheme, prohibit trustees from acting where considered unfit, impose fines, and prosecute certain offences in criminal courts. In particular, if the regulator believes an employer is deliberately trying to avoid its pensions obligations, it can issue Contribution notices, requiring a specified amount to be paid into the scheme; Financial support directions, which require financial support to be put in place for an underfunded scheme; or Restoration orders, which mean that if there has been a transaction at an undervalue involving the scheme’s assets, the regulator can take action to have assets restored to the scheme.
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When the regulator knocks, will you be ready? - Nabarro

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