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  3. 2023 Consultation on proposed changes related to financial penalties: Consultation Response

Consultation response

2023 Consultation on proposed changes related to financial penalties: Consultation Response

This response sets out our position in relation to the consultation on the proposed changes to the Statement of Principles for Determining Financial Penalties.

Published
10 July 2025

Last updated
10 July 2025 - Changes

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Contents

Annex 2 - Questions asked in the Winter 2023 consultation on proposed changes to the Statement of Principles for Determining Financial Penalties

These questions were asked in the Winter 2023 consultation on proposed changes to the Statement of Principles for Determining Financial Penalties (SoPfDFP), which ran between December 2023 and March 2024.

Questions 1 to 10 were introductory questions about the respondent. They did not concern the SoPfDFP and are not recited here.

1. Introduction

The purpose of the statement of principles for determining financial penalties

Question 11: To what extent do you agree that the wording in paragraphs 1.1 to 1.2 adequately describes the purpose of this statement of principles for determining financial penalties?

The framework of policies and procedures

Question 12: To what extent do you agree that the wording in paragraph 1.3 adequately describes the framework of policies and procedures that the statement of principles for determining financial penalties should be read in conjunction with?

Question 13: To what extent do you agree that the wording in paragraph 1.4 adequately describes the legal framework within which the statement of principles for determining financial penalties sits?

The scope of this document

Question 14: To what extent do you agree that the wording in paragraph 1.5 adequately describes the scope of the document?

Question 15: To what extent do you agree with the proposal to remove paragraph 1.6 – key considerations – to avoid duplication of content that appears later in the proposed document?

Question 16: Are there any other references, documents or content the Commission should consider including, or take account of, in this section of the SoPfDFP?

2. Applicable principles

The purpose of imposing a financial penalty

Question 17: To what extent do you agree with the proposed wording at paragraph 2.1 and in particular the primary aims of financial penalties?

Question 18: To what extent do you agree with the principles set out in paragraph 2.2 which underpin the detailed proposed amendments set out in this consultation?

Criteria for the imposition of a financial penalty

Question 19: To what extent do you agree with the proposed list of factors the Commission may have regard to when considering the imposition of a financial penalty, as set out in paragraph 2.4?

Question 20: To what extent do you agree with the proposed circumstances in which a financial penalty would not normally be imposed, as set out in paragraph 2.5?

Criteria for determining the quantum of a financial penalty

Question 21: To what extent do you agree with the overall proposal to move to a clearly defined six step approach?

Question 22: To what extent do you agree with the proposal set out in paragraph 2.7, to separate the calculation of the disgorgement element of the fine from the calculation of the penal element, with these added together at Step 6?

Question 23: To what extent do you agree with the steps proposed and the sequencing of these steps as set out in paragraph 2.8?

Question 24: Do you have any further comments on this section that the Commission should take into account?

Step 1: Detriment to consumers and/or financial gain to the Licensee

Question 25: To what extent do you agree with the proposal for the Commission to attempt to identify the amount of detriment to consumers and/or financial gain to the Licensee as a direct result of the breach as the first distinct step in the process?

Question 26: To what extent do you agree with the proposal that the amount of detriment to consumers and/or financial gain to the Licensee as a direct result of the breach should constitute the “disgorgement” sum added to the penal element of the fine?

Question 27: To what extent do you agree with the proposal that if the level of detriment to consumers and/or financial gain to the Licensee cannot be calculated at Step 1, this should be considered as a relevant factor in assessing seriousness under Step 2?

Question 28: Do you have anything further to add in relation to this section, for the Commission to take into account?

Step 2: The seriousness of the breach to determine the starting point of the penal element

Step 2(a): Determining the seriousness of the breach

Question 29: To what extent do you agree with the list of factors proposed under paragraph 2.11 that the Commission would consider in order to determine the seriousness of the breach?

Question 30: To what extent do you agree with the proposal for consideration of those factors to inform categorisation of the seriousness of the breach using a five-point scale?

Question 31: To what extent do you agree with the factors and descriptions proposed at paragraph 2.14 to determine the levels of seriousness of the breach?

Question 32: Do you have anything further to add in relation to this section, for the Commission to take into account?

Step 2(b): Determining the starting point of the penal element of the fine

Question 33: To what extent do you agree with the proposal to use GGY generated during the period of the breach (rounded to the nearest month) as the starting point for determining the level of the financial penalty?

Question 34: In the case of one-off or events lasting short time periods, to what extent do you agree with the proposal that GGY derived during the quarter preceding the end of the breach should be considered the starting point for determining the level of the financial penalty?

Question 35: In the case of multiple breaches of varying duration, to what extent do you agree with the proposal to use the aggregated breach period, taking account of different levels of seriousness within that breach period, or if this is not appropriate, for the Commission to use judgement to reach a fair and proportionate period?

Question 36: To what extent do you agree with the proposal that the starting point for the financial penalty will be calculated by adopting a percentage of GGY derived during the period of the breach, where this percentage is set by reference to the level of seriousness of the breach?

Question 37: To what extent do you agree with the percentage ranges proposed to inform the starting point of the penal element, associated with the level of seriousness of the breach?

Question 38: To what extent do you agree with the proposal for the Commission to reserve the right to impose a percentage of GGY in excess of 15% in exceptional circumstances for the most serious breaches?

Question 39: Do you have any comments on the circumstances in which it would not be appropriate to use GGY as the starting point for this calculation? Please include here any other examples we should consider adding to paragraph 2.20.

Question 40: Do you have any further comments to add on the proposals for Step 2(b) Determining the starting point of the penal element of the fine?

Step 3: Mitigating and aggravating factors

Question 41: To what extent do you agree with the proposed approach to provide clarity and transparency on the factors which may contribute to increasing or decreasing the sum of the financial penalty?

Question 42: To what extent do you agree that this step [Step 3: Mitigating and aggravating factors] should be separate from the process for determining the starting point for the penalty at Step 2?

Question 43: Do you have anything further to add in relation to this section, for the Commission to take into account?

Step 4: Adjustment for deterrence

Question 44: To what extent do you agree with the proposal that any adjustment for deterrence should be separate from the process for determining the starting point for the penalty at Step 2?

Question 45: To what extent do you agree with the proposal that any adjustment for deterrence should be applied after Step 3: Mitigating and aggravating factors?

Question 46: Do you have anything further to add in relation to this section, for the Commission to take into account?

Step 5: Discount for early resolution

Question 47: To what extent do you agree with the proposed approach to provide transparency around the application of any discount for early resolution?

Question 48: To what extent do you agree that this step should be separate from the process for determining the starting point for the penalty at Step 2?

Question 49: To what extent do you agree with the proposal that any discount for early resolution should be applied after Step 4 – Adjustment for deterrence?

Question 50: Do you have any comments on the proposed percentage range which may be applied to determine the level of the discount?

Question 51: Do you have anything further to add in relation to this section, for the Commission to take into account?

Question 52: To what extent do you agree with the proposal that the final penalty amount will be the sum of the amount calculated at Step 1 (disgorgement, where it has been possible to identify) and that at the end of Step 5?

Step 6: Affordability

Question 53: To what extent do you agree with the proposal to take affordability into account, and to mitigate against financial hardship?

Question 54: To what extent do you agree that when considering affordability, the Commission should take into account the financial resources of any parent or group or ultimate beneficial owner, in addition to the Licensee’s own resources?

Question 55: To what extent do you agree the Commission should also publish the level of financial penalty prior to any reduction applied at Step 6 in any publications regarding the case?

Question 56: Do you have anything further to add in relation to this section, for the Commission to take into account?

Procedural matters, payment plans, time limits and payments in lieu of financial penalties

Question 57: To what extent do you agree with the inclusion of the sections on Procedural matters, Time limits and Payments in lieu of financial penalties as part of the proposed new SoPfDFP, as was the case in the existing SoPfDFP?

Question 58: To what extent do you agree the Commission should only consider payment plans in exceptional circumstances?

Question 59: If you have any other comments on the proposed new SoPfDFP that have not been addressed individually within this document, please state them here, using paragraph numbers for reference.

Indicative sanctions guidance

Question 60: To what extent do you agree that the amendments proposed to the Indicative sanctions guidance reflect the proposed Statement of principles for determining financial penalties as set out in this consultation?

Equality Act

Question 61: Do you have any evidence or information which might assist the Commission in considering any equalities impacts, within the meaning of section 149 of the Equality Act 2010, in the context of any proposal considered in this consultation?

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Annex 1 - List of organisations that responded and consented to the publication of their name
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