- Civil penalties and the tension between companies and their directors (Sutton v Norwich City Council)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Local Government analysis: This was the first opportunity for the Court of Appeal to look at the new civil penalties under section 249A of the Housing Act 2004 (HA 2004) which came into force in 2017. This appeal was only concerned with the extent of the penalties confirmed at first instance, but it is important as it went further in considering the natural tension that exists in any proceedings in which a penalty or fine is levied simultaneously on both a company and its directors. The Court of Appeal clarified the methodology for approaching such penalties or fines, including whether when applying principles of totality, a court or tribunal was bound by a total figure, and whether it was then required to apportion this among the parties when a director is substantially the same loser if they are the principal shareholder in a small business, per the hitherto understanding of Lord Bingham’s judgment in Rollco. Written by Marcus Croskell, barrister at East Anglian Chambers.
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