Instigation of proceedings
13.36Pecuniary penalty proceedings may be instigated only by the relevant enforcement body or agency. In this regard, they differ from certain other statutory, “civil” remedies. Any aggrieved person may apply for a compensatory order, and any “entitled person” may apply for a management ban, under the Securities Markets Act 1988. Similarly, a range of persons (and any person with leave of the court) can apply for civil remedy orders, injunctions and compensatory orders under the Takeovers Act 1993, but only the Takeovers Panel can commence pecuniary penalty proceedings.
13.37The position differs for criminal offences, as any person may commence a criminal proceeding. The right to private prosecution has a long history in common law jurisdictions and is justified on the grounds that:
- it provides protection where a public prosecutor fails, for whatever reason, to exercise his or her discretion to prosecute: it plays a role, then, in the protection against the abuse of public power; and
- it provides an outlet for an individual’s need for vindication of a personal grievance.
13.38The Criminal Procedure Act 2011 places constraints on the exercise of the right by providing that a District Court judge may require a private prosecutor to establish a prima facie case before accepting a charging document, or may refuse to accept it if it is otherwise an abuse of process. This requirement is aimed at preventing vexatious and unprincipled private prosecutions from going ahead.
13.39In the Issues Paper, we stated that we could see no strong argument for allowing persons other than enforcement bodies to commence pecuniary penalty proceedings. This is particularly so because pecuniary penalties are not designed with compensation or the redress of harm in mind. Other routes such as private prosecutions and standard civil proceedings appear adequate for the vindication of any personal grievances.
13.40We also noted that pecuniary penalties often feature where a public body has the purpose of overseeing and enforcing a statutory regime, and is resourced to do so. No submitters considered that anyone other than an enforcement agency should be able to commence pecuniary penalty proceedings. Indeed, submitters expressed some concern about the risk of abuse if others were able to commence such actions. We agree.