1.22We have concluded that while the intent behind pecuniary penalties is to encourage compliance with statutory regimes, they do so by threat of punishment. Their nature as a state-imposed punitive measure needs to be given adequate attention in their design. We consider that they play a valid role as one of a number of penalties and other orders that are available to lawmakers in New Zealand. We also anticipate that the number of pecuniary penalty provisions on the statute book will continue to grow, and that they will be used to deter and penalise a growing range of undesirable conduct.
1.23For the most part, at present, their design is appropriate for their purpose. However, in light of our assessment of the nature of pecuniary penalties and the potential for them to be used with greater frequency, we consider that some aspects of their current legislative design are inappropriate.
1.24More broadly, in the course of our research and analysis a number of themes have emerged. They concern the general approach that should be taken when any new or hybrid form of statutory order or penalty (including pecuniary penalties) is being considered. We highlight these themes here as “key findings” of our review. They should be given adequate attention throughout the policy design process.
- The punitive nature of an order or penalty, and its potential impact on the range of possible defendants, must be openly assessed and given adequate emphasis when that penalty is being designed. It is this nature that should dictate what safeguards are put in place.
- At the same time, there must be scope for context-specific approaches. Occasionally the safeguards will need to be adjusted or compromised to meet competing policy objectives. However, such adjustments and compromises should be made only when justified through robust and transparent analysis.
- The label “civil” is not determinative of the safeguards or procedures that should be afforded to novel forms of orders or penalties. Providing for a new form of order or penalty to be imposed through the civil courts does not neutralise the punitive effect of the order or penalty, and so does not remove responsibility from policymakers of assessing whether greater safeguards should be applied or aspects of standard civil procedure modified.
- The terms “regulation” and “regulatory law” are able to be too broadly defined. It follows that they should be relied upon to justify any particular design aspect of an order or penalty. It is not satisfactory to use those terms to explain why pecuniary penalties, strict liability offences or other options have been chosen for a new legislative scheme. Nearly any law can be labelled “regulatory”.
- Procedural safeguards should be designed with the spectrum of potential defendants in mind, from the most vulnerable to the powerful. Safeguards should not be omitted to the detriment of more vulnerable defendants.
- Existing pecuniary penalty regimes should not uncritically be relied upon as a template for new regimes. The design process should be comprehensive and robust for each new context in which pecuniary penalties are created.