230.Section 225 and 226 modify the enforcement regime available under the 1993 Act.
231.Monetary penalties may be imposed by the Regulator or the Authority for contraventions of licence conditions, franchise requirements and the provisions of orders made to secure compliance with an operating licence or passenger service franchise. In contrast with the 1993 Act, these will cover past breaches as well as those which are continuing. There are limitation periods, after which past breaches of licences may not be penalised. There is no specific limit on the penalty which may be imposed, but it must be of a reasonable amount and may not exceed 10% of the relevant operator’s turnover (with turnover being determined in accordance with an order made by statutory instrument by the Secretary of State). In calculating a penalty the appropriate authority (the Rail Regulator or the Authority) must take account of policies which it has published with regard to such penalties. Such policies may include policies of having regard to the need to secure compliance, the consequences of the breach and deterrence of other breaches. A rail operator may apply to pay in instalments.
232.There are requirements as to the procedure, including the giving of notices with prescribed information.
233.The operator may make an application to the court to question the validity of a penalty order on prescribed grounds. The requirement to pay a penalty is suspended until a case is determined. The court may cancel or reduce the penalty or extend the timescale to pay. It may also require interest to be paid on a reduced penalty.
234.The 1993 Act is amended to allow the appropriate authority, if it thinks fit, to refrain from taking action requiring compliance with a relevant licence condition or franchise requirement where an operator is taking appropriate steps to comply or where a breach would not adversely affect railway users or lead to an increase in public expenditure.
235.Section 226 reduces the period for a rail operator to make representations or objections to enforcement action from not less than 28 to not less than 21 days; it reduces the period on modifications to a compliance order from not less than 28 days to not less than 7 days; and on revocation from not less than 28 days to not less than 21 days. But the Regulator or Authority can allow more time for representations to be made where that would be appropriate. The Regulator cannot make an enforcement order against a licence holder under the 1993 Act where he considers it more appropriate to proceed under the Competition Act 1998. Section 225 extends this provision so that a penalty may not be imposed by the Authority or the Regulator for breach of an obligation under the conditions of a licence, or a closure restriction, where the Regulator is satisfied that the most appropriate way of proceeding is by using his powers under the Competition Act.
Commentary on Sections Part IV: Railways Chapter Ii: Other Provisions about Railways Sections 225 and 226: Enforcement Regime