Litigation and Insurance

2. Law Enforcement

Government organisations with responsibility for enforcing legislation have a duty to bring cases against businesses which break the law.

Below are some of the main problem areas:

2.1 HMRC is particularly active.

• The average settlement of a business tax investigation is about £5,000 (including tax, interest and penalties). Accountancy and legal fees can add significantly to these costs.

2.2 The Department for Work and Pensions pursues businesses for non-payment or incorrect payment of National Insurance contributions.

2.3 The Health & Safety Executive makes over 1,100 successful prosecutions a year.

• About 5,500 businesses are served improvement notices or prevented from operating by prohibition notices.

2.4 Trading Standards prosecutes several thousand businesses each year.

• The most common prosecution is for false trade descriptions. For example, when a business misleads a customer about the quantity, quality, or price of a product.

2.5 Companies House prosecutes over 1,600 directors each year for failing to submit accounts and returns on time.

2.6 Various environmental authorities prosecute businesses which cause pollution, including noise pollution.