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Civil financial penalties – how much is too much?

Howard Lederman considers the principles which apply to the amount of penalties local housing authorities can impose for relevant housing offences, following recent guidance by the Upper Tribunal.

Since 2017 local housing authorities in England have been able to impose financial penalties on a person (often an owner or person having control of residential property) if satisfied, beyond reasonable doubt, that conductamounts to a “relevant housing offence” (including a breach of improvement notice, breach of selective licence or HMO licence). 

After service of a notice of intent, the authority serves a notice imposing the penalty. The final notice may be appealed to the First-tier Tribunal (“the FTT”). The appeal may reconsider the decision to impose the penalty, or the amount of the penalty afresh, as it is a re-hearing.

The amount of any financial penalty is initially determined by the authority subject to a maximum of £30,000. The penalty is an alternative to prosecution for a housing offence and may not be imposed where the person has been convicted of the offence,  or where criminal proceedings have been instituted and not yet concluded. The person who is the subject of the penalty may appeal to the FTT against the imposition of the penalty and the amount. The FTT has jurisdiction to reconsider both issues. The appeal takes the form of a re-hearing. The FTT may consider facts of which the authority were unaware.

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This article focuses upon the principles which apply to the amount of penalties imposed, following recent guidance by the Upper Tribunal in Sutton v Norwich CC [2020] UKUT 0090 and Waltham Forest v Marshall [2020] UKUT 0081.

When deciding the amount of penalty, the authority is required to have regard to  the “Guidance for Local Housing Authorities” (2018). This identifies factors to be taken into account when considering the penalty to be imposed for offence as:

  1. the severity of the offence
  2. the culpability and track record of the offender
  3. the harm caused to the tenant (including the potential for harm)
  4. punishment of the offender
  5. deterrence of the offender from repeating the offence
  6. deterrence of others from committing similar offences
  7. removing any financial benefit the offender may have obtained as a result of committing the offence.

Many authorities have published policies on the appropriate level of civil penalty which set out a matrix of bands and aggravating or mitigating features of the conduct complained of.

The Upper Tribunal in Marshall held the FTT’s starting point when considering the level of penalty should normally be to apply the authority’s policy as though it were standing in the authority’s shoes. The FTT should not lightly reverse the authority’s decision on this issue, according to Marshall.

The Upper Tribunal in Sutton endorsed this approach but recognised it could give rise to inconsistencies between penalties imposed for similar offences by different local authorities. In Sutton it was held that “consistency within a local authority area is more important than consistency between authorities” and the FTT should be “slow to rely on the approach taken by a different authority, or on decisions on appeals in different areas, as justifying a departure from the policy”. It remains to be seen how whether this approach will survive challenge if wide variations in policies become apparent. Local authorities would be well advised to adopt policies similar to others to avoid the inevitable challenge until a higher Court gives guidance whether on appeal from the FTT or upon judicial review.

Howard Lederman is a barrister at 42 Bedford Row. He can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it.

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