Chapter 3
The nature of civil pecuniary penalties

3.1On one view, strict adherence to a criminal-civil divide is unrealistic. Indeed, it fails to reflect accurately our current justice system, where the criminal-civil dichotomy has been compromised legitimately for a variety of policy reasons. Supporters of civil pecuniary penalties argue that, while they breach the traditional divide, they are an appropriate response to certain types of contravention that are not adequately deterred by criminal offences, do not demand the moral disapprobation that accompanies criminality, or for which criminalisation is otherwise inappropriate. In particular, they are an important tool in the enforcement of regulatory regimes which have been put in place for particular policy reasons and in the public interest. Those imperatives, it is argued, warrant the use of civil pecuniary penalties.

3.2On the other hand, opponents of civil penalties argue that they wrongly prioritise the desire for efficiency in regulation over legal principle. They are “stealth sanctions” which “seek to avoid the safeguards of criminal procedure by … the pretence that they are civil debts”.60  Or a “noxious hybrid”61  that illegitimately straddles the traditional divide between criminal law and civil law. The argument is that there is a fundamental distinction between the purposes of the criminal law and the procedure by which it achieves its objectives on the one hand, and the compensatory or injunctive functions of the civil law and the procedures by which those objectives are achieved on the other.62  The purist view is that penalties should remain solely within the remit of the criminal law, with the benefit of its particular procedural safeguards.

3.3In this chapter we describe the traditional differences between the criminal and civil branches of law. We then consider the nature of civil pecuniary penalties and determine that they are a “hybrid”: that is, they display traditional features of both branches of law. We take the position that there is nothing wrong with a hybrid sanction per se, but suggest that the adoption of any such model should take place in the light of robust analysis and be guided by principle.

60See R M White “It’s Not a Criminal Offence–Or Is It? Thornton’s Analysis of ‘Penal Provisions’ and the drafting of ‘Civil Penalties’” (2011) 32(1) Statutes LR 17.
61T Greenwood “Corporate Officers–Bounden Duty and Service … and Reasonable Lively Sacrifice” (1992) 6 Butterworths Corporate Law Bulletin 61.
62Ministry of Economic Development Reform of Securities Trading Law: Volume Three: Penalties, Remedies and the Application of Securities Trading Law Discussion Document (May 2002) at [281].