What form should our recommendations take?
8.8In addition, there is a question as to whether there is a need for a legislative framework for civil pecuniary penalties. Two matters may justify enacting legislation.
8.9First, our recommendations about design and procedural rules will differ from some existing civil pecuniary penalty provisions. This is inevitable because of the inconsistent approaches taken in the existing legislation. There may be a need for legislation to remedy those inconsistencies. Non-material variations – those that, in practice, will have little or no impact on rights and interests – are unlikely to warrant a legislative response. However, if we determine that an existing provision conflicts with principle to such an extent that it may infringe upon rights and interests, legislation might well be warranted. The position that some existing statutes take on double jeopardy could fall into this category. Similarly if we were to recommend that defendants should benefit from some form of protection on the grounds of a privilege against self-exposure to a non-criminal penalty in civil pecuniary penalty proceedings, amendments to all but perhaps one of the existing Acts may be desirable.
8.10Secondly, a more comprehensive legislative response may be warranted if there is sufficient concern that the combination of the novel and hybrid nature of civil pecuniary penalties, and the inconsistencies that currently feature, give rise to the risk of otherwise avoidable litigation. In those circumstances, might there be an argument for a civil pecuniary penalty statute such as that proposed in Australia? Such a statute could contain generic provisions which apply to each civil pecuniary penalty regime.
8.11In 2002, after its review of federal civil and administrative penalties, the Australian Law Reform Commission (ALRC) recommended the enactment of a Regulatory Contraventions Statute. It was proposed that the statute would deal with the law and procedure governing a range of non-criminal contraventions. The ALRC’s recommendations included proposed provisions about, among other things, fault requirements, corporate responsibility and liability, the exercise of regulator discretion, double jeopardy, various aspects of procedural fairness, protection against self-exposure to a non-criminal penalty and the setting of monetary penalties both in legislation and by the court.
8.12There has been no formal response to the ALRC’s report from the Commonwealth Government. The ALRC website notes, however, that the report has been influential in a number of developments. Most notably, in April 2004, the Attorney-General’s Department published on its website A Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers. The Guide was a resource to assist in the framing of proposed criminal offences, civil penalties and certain other enforcement provisions that are intended to become part of Commonwealth law. Many of the provisions in the Guide are based on principles discussed in the ALRC’s report and in many circumstances it refers users directly to the ALRC report. We note, however, that the Guide has since been amended and the material on civil penalties has been removed, to better reflect the scrutiny role that is undertaken by the Criminal Law and Law Enforcement Branch of the Attorney-General’s department.
8.13In addition, a number of Australian academics have proposed a “uniform code” of procedural provisions for civil pecuniary penalties. This argument is grounded in concerns that silence in civil pecuniary penalty statutes, or room for different interpretations of their terms, has meant that courts have been free to introduce protections into civil pecuniary penalty proceedings that were not intended by Parliament. As Middleton notes, courts understandably may be concerned to do so because of the punitive nature of civil pecuniary penalties and to protect defendants from the excessive exercise of State power. And Spender acknowledges that a hybrid such as civil pecuniary penalties necessarily involves a balance of civil and criminal procedure. She suggest that it is the methodology of the case by case development of such a balance which is problematic, to the extent that the courts’ approach is limiting the very benefits that civil pecuniary penalties are supposed to offer.
8.14Quoting Spender, Comino describes the problem as follows:
… negotiating an effective civil penalty procedure on a case-by-case basis is problematic and carries the danger of ‘lead[ing] to indeterminacy or default to criminal procedure’, … This occurs to some extent because ‘it is endemic to the judicial power and function to be zealous about fair procedure’, and ‘[z]ealousness about fair procedure has led to the development of a gold standard which belongs to the criminal law rather than the negotiated standard’ which characterises civil proceedings.
8.15The flexibility offered by Australian provisions has given judges the freedom to make a number of decisions or statements favouring the imposition of certain procedural protections, including:
- That those defending civil proceedings for a management ban can rely on the common law privilege against self-exposure to a penalty and so can limit their disclosure accordingly;
- Implying a duty of “prosecutorial fairness” on the enforcement body in its pursuit of civil pecuniary penalties;
- Inhibiting the enforcement body’s ability to combat limits on defence disclosure by taking a “quasi-criminal” approach to whether it can adduce additional evidence after its case is closed.
8.16Critics of these decisions suggest that they are diminishing the ability of civil pecuniary penalties to be a “swift and inexpensive enforcement option”. Critics also suggest that the courts are treating civil pecuniary penalty proceedings in at least a quasi-criminal manner and so are undermining Parliament’s aim in introducing the regime in the first place. This view was echoed by Kirby J in his dissenting opinion in Rich v ASIC, where he described the national and global regulatory context for the Corporations Act 2001 (Cth) and cited the need for an “appreciation of [the] major debates about economic and social regulation and differentiated legislative responses”.
8.17The solution which has been proposed is a set of uniform procedural rules, in the form of a statute, code or court rules, which would set out the “law and procedure” for civil pecuniary penalty proceedings. As noted in chapter 6, Middleton suggests that the “code” should deal with matters such as:
- The standard of proof;
- The operation of the privilege against self-incrimination, the penalty privilege and any associated evidential immunities;
- The general principles on the availability (or otherwise) and scope of cross-examination in civil proceedings under the Corporations Act 2001 (Cth) where there may be subsequent criminal proceedings;
- Whether the concept of “prosecutorial fairness” applies in civil pecuniary penalty proceedings, and provision as to matters such as the appropriate rules of disclosure.
A set of procedural rules for New Zealand civil pecuniary penalties?
8.18The use of the term “uniform code” is inappropriate in a New Zealand setting. What might instead be envisaged is a set of standard provisions for all civil pecuniary penalties, which could be departed from by express provision in individual statutes. The standard provisions could be considered akin to s 21 of the Summary Proceedings Act 1957 which, in 25 subsections, sets out the procedure for the imposition of infringement offences. The procedure in s 21 applies to all offences that are expressed to be infringement offences, although minor departures exist. Adopting this model, then, whenever a statute included a “civil pecuniary penalty” the standard civil pecuniary penalty procedural provisions would apply.
8.19Whether such a statute would reduce the risk of costly litigation is a moot point: it would depend on the drafting of its provisions. And clearly legislation would not remove the possibility of procedural or rights-based review. However, reducing the risk of litigation should be an aim of such a statute. The statute would serve three additional purposes. It would have the effect of making a clear statement of principle about each procedural rule for civil pecuniary penalties. It would also ensure consistency across the range of civil pecuniary penalty provisions. This would assist in enabling the public to access and understand the law, and to understand their potential liabilities. This in turn can bring with it efficiencies and confidence for the regulated community. It would also remove the need for policy makers to revisit the design of civil pecuniary penalties for each new statute.
8.20Although Parliament would be free to introduce variations to the standard model in individual Acts, the existence of the standard model would suggest that additional consideration would need to be given to any such policy proposal and that the departure would need to be justified.
8.21If submissions to this Issues Paper favoured a standardised legislative framework for civil pecuniary penalties, consideration would need to be given to the appropriate home for the provisions. One option would be a stand-alone statute. Such a statute would give substantial recognition to the civil pecuniary penalty.
8.22Another option may be for the provisions to be contained in the High Court rules. These contain the general rules of civil procedure for the High Court and are made under the authority of s 51 of the Judicature Act 1908. Section 51 authorises the making of rules “regulating the practice and procedure of the High Court” in all civil proceedings. The content of the rules must not extend beyond regulating the practice and procedure of the High Court (that is, they must not extend beyond the scope of s 51). There is therefore a question as to whether provisions relating to the procedure for civil pecuniary penalties are appropriate for the High Court rules. If it were thought that they were appropriate, there would be a need for an enabling provision in primary legislation.
Q43 Should we recommend the addition to the Legislation Advisory Committee Guidelines of a chapter relating to civil pecuniary penalties? Are there any other forms of guidance that would assist?
Q44 Is there a need for (a) legislation to amend existing civil pecuniary penalty regimes to ensure that they are principled and consistent; and/or (b) a set of standard civil pecuniary penalty statutory provisions?