Chapter 10
Double jeopardy


10.10Some submitters suggested a blanket ban on the possibility of double punishment by the State. Accordingly, a number thought that there should never be a pecuniary penalty where a criminal penalty has been imposed for the same conduct, and vice versa.196
10.11However, other submitters voiced three concerns about this proposition.197 Some would prefer no statutory bar, and that the risk of abuse or oppressiveness be dealt with by relying on the court’s existing power to stay or strike out the second proceedings. Adopting that approach involves accepting that there may be occasions where a second penalty (or second proceedings) would not be abusive or oppressive, or that other circumstances may outweigh the risk of abuse or oppression.

10.12The first concern was that there might be circumstances where an enforcement body should be able to seek a criminal penalty after a pecuniary penalty has been imposed. For example, it may be argued that if there is a level of moral culpability the pecuniary penalty proceedings have not addressed, the regulator should have an ability to bring subsequent criminal proceedings, for example, to seek the additional penalty/protective measure of imprisonment. The Parliamentary Counsel Office (Commercial Team) (PCO) suggested that this argument should only apply if there was a clear distinction between the elements of the civil and criminal liability provisions (such as the need for knowledge/intention for criminal liability). It was also suggested that pecuniary penalty statutes could provide that only imprisonment (and not a fine) could follow a pecuniary penalty, and that the pecuniary penalty could be taken into account by a court in subsequent sentencing.

10.13Secondly, concern was expressed that a rule requiring an enforcement body to make a decision at the outset as to which penalty to seek might have a negative impact on the way it exercises its prosecutorial discretion. PCO was concerned that if such a rule existed, regulators would be unlikely to bring pecuniary penalty proceedings first, or at all, if they have the option of a criminal prosecution. This appears to have been the experience in Australia in the early days of the Australian Securities and Investment Commission (ASIC). A 1999 study found an agency preference in ASIC for criminal prosecution wherever available.198 The study identified the reasons for this preference as ASIC’s enforcement policy and culture; resource constraints; its relationship with the Director of Public Prosecutions and the courts; and early uncertainty as to how the pecuniary penalty regime would be interpreted. Also, in instances where ASIC chose civil over criminal proceedings, it had been criticised in the media for being soft on white collar crime. A subsequent study found that while ASIC used pecuniary penalties (“civil penalties” in Australia) very rarely between 1993 and 1999, their use increased between 2000 and 2009.199 This was attributed, in part, to the 1999 reform of the Corporations Act 2001 (Cth), which removed a bar on criminal proceedings subsequent to civil penalty proceedings (even if a civil penalty has been imposed).
10.14Thirdly, there was concern that a statutory bar on double punishment by criminal offences and pecuniary penalties would delay compensation and other civil orders. The suggestion was that since regulators are likely to take criminal proceedings first, civil liability proceedings will have to be put on hold. This concern is particularly relevant to regimes that provide for the regulator to obtain a “declaration of contravention” through civil proceedings, on the basis of which a range of orders can be made including pecuniary penalties, management bans, injunctions and compensation orders. This model removes the need for individuals to pursue individual proceedings on liability. As noted elsewhere in this Report, the “declaration of contravention” model has clear benefits and can enable significant public and private cost savings.200 The model has considerable support amongst submitters.
196Bell Gully, Donald Mathieson QC, one individual, New Zealand Law Society, Federated Farmers, New Zealand Bar Association, Institute of Directors and Dr Marina Nehme.
197Commerce Commission, Financial Markets Authority, Ministry for Primary Industries, Ministry of Business, Innovation and Employment, Meredith Connell, and Parliamentary Counsel Office (Commercial Team).
198George Gilligan, Helen Bird and Ian Ramsay “Civil Penalties and the Enforcement of Directors’ Duties” [1999] 22 UNSWLJ 417.
199Michelle Welsh “The regulatory dilemma: The choice between overlapping criminal sanctions and civil penalties for contraventions of the directors’ duty provisions” (2009) 27 CSLJ 370; and Michelle Welsh “Civil penalties and responsive regulation: the gap between theory and practice” (2009) 33 Melb Uni LR 908.
200See ch 13.