Part 3: Enforcement of consumer protection law Chapter 6: Investigatory Powers Schedule 17: Investigatory powers Paragraph 2: Penalties for non-compliance with information notices
Paragraph 15 of Schedule 5 to the Consumer Rights Act 2015 sets out the procedure and required content of an information notice issued under paragraph 14 of Schedule 5 to the Consumer Rights Act. Paragraph 2 makes limited amendments to Schedule 5 of the Consumer Rights Act so that an information notice has to specify the circumstances in which non-compliance with the information notice could result in the imposition of a monetary penalty (subparagraph (2)).
	Subparagraph (3) inserts a new paragraph 16A into Schedule 5 to the Consumer Rights Act, which will give the court the power to impose a civil monetary penalty where the court finds that there has been a failure to comply with an information notice without reasonable excuse (paragraph 16A, subparagraph (3)). "Without reasonable excuse" means, for example, that the recipient of an information notice may not be subject to a penalty if they can provide evidence of an externally verifiable and unforeseen factor, outside of their reasonable control, that resulted in non-compliance with the information notice.
	The new paragraph 16A is in addition to the existing power of the court under paragraph 16 of Schedule 5 to the Consumer Rights Act to make an order requiring the recipient of the information notice to do anything that the court thinks is reasonable for them to do to ensure compliance with the information notice as well as ordering the recipient of the notice to pay the costs or expenses of the enforcer’s application. Paragraph 16A, subparagraph (9) enables enforcers to combine an application for an order under paragraph 16 and an application for the imposition of a monetary penalty under paragraph 16A of Schedule 5 to the Consumer Rights Act, or to apply for one instead of the other.
	The Government considers that the provision of false or misleading information in response to an information notice constitutes a failure to comply with the information notice. Similarly, the destruction, disposal, concealment or falsification of requested information (e.g. destruction of a document or part of a document which contains the required information) also constitutes a failure to comply with the information notice.
	Paragraph 16A, subparagraph (4) covers the nature of the penalty that a court may impose where it finds that there has been a failure to comply with an information notice, without reasonable excuse. It specifies that the court may impose a fixed amount penalty or a penalty calculated by reference to a daily rate, or a combination of both. The court has discretion to impose such a monetary penalty as it considers appropriate, subject to the statutory maxima set out in paragraph 16A, subparagraph (5).
	The policy rationale for providing for a penalty of up to the higher of a fixed amount or a percentage of turnover is because:
a penalty of up to only a fixed amount might not act as a meaningful deterrent for large companies with substantial turnover,
conversely, there may be smaller companies (such as a new start up) which have a low or negligible turnover, so a penalty of up to only the relevant percentage of turnover might not act as a meaningful deterrent, and
some individuals in scope of the penalty powers, such as a company director who consents or connives in the infringing practice (as an accessory) will not have a turnover and therefore the higher penalty will necessarily be a penalty of up to the fixed amount.
	Where the recipient of the information notice has a turnover that can be determined, a fixed amount penalty must not exceed £30,000 or, if higher, 1% of the total value of their turnover. Paragraph 16H concerns calculation of turnover for these purposes. Where the recipient of the notice does not have a turnover, the fixed penalty must not exceed £30,000 (paragraph 16A, subparagraph (5) (a)).
	Where the recipient of the information notice has a turnover that can be determined, a daily penalty must not exceed £15,000 per day or, if higher, 5% of the total value of their daily turnover. Where the recipient of the information notice does not have a turnover, the daily penalty must not exceed £15,000 (paragraph 16A, subparagraph (5) (b)).
	Paragraph 16A, subparagraph (6),(a) means that a daily penalty imposed by the court can only begin to accrue after the enforcer has served the court application on the recipient of the information notice, i.e. the point when they are clearly made aware of their failure to comply with the requirements of the information notice. A daily penalty stops accruing when the requirements of the information notice are met unless the court determines an earlier date (paragraph 16A, subparagraph (6) (b)).
	Paragraph 16A, subparagraph (7) sets out the information that must be included in a court order, or a notice accompanying service of the court order, that requires payment of a monetary penalty, including the type, amount and grounds for imposition of the penalty, the process and timing for its payment, and relevant rights to apply to change a payment date or to appeal against the penalty in the relevant jurisdiction.
	Paragraph 16A, subparagraphs (8) and (10) set out applicable rights for the recipient of the penalty to seek an amended payment schedule for, or to bring an appeal against, a penalty. A person who is required to pay a monetary penalty has a right to appeal the decision to impose a penalty, its nature or amount "on the merits", in addition to their existing appeal rights.
	Where the recipient of the information notice applies to appeal the penalty, its payment cannot be required before this application is decided (paragraph 16A, subparagraph (11)).
	Paragraph 16A, subparagraph (12) extends the court’s powers under paragraph 16(4) and (5) to require payment of costs to its order-making powers under paragraph 16A.
	Paragraph 16A, subparagraph (13) clarifies that, in Scotland, the references to an order being served (in subparagraphs (7) and (8) of Paragraph 16A) includes service of an extract order in execution of or diligence on the order.