Burden of proof
Ways of reversing the burden of proof
8.34Below, we give examples of ways that the burden of proof may be placed on a defendant, reiterating our principled position that any proposal to do so must be robustly justified and referring to the points made at [8.28] to [8.30].
8.35One way in which a burden is imposed on a defendant is through including a matter in a statutory defence, instead of requiring the person bringing the proceedings to prove the matter as part of their case. Here, the defendant bears the burden of raising the matter to bring it into evidence (an evidential burden), or positively establishing that the defence is made out (a legal burden). There may be times where it is appropriate for the defendant to carry the legal burden for a statutory defence. But that should always be made clear and should be carefully justified in the particular policy context.
8.36In Australia, the Regulatory Powers (Standard Provisions) Bill 2014 (Cth), which is before the House of Representatives at the time of writing, will create a general rule that wherever the defendant wishes to rely on a statutory defence created by a penalty provision, the defendant bears only the evidential burden; that is, the burden to raise the defence. The enforcement agency would then have to show the defence did not apply. We do not go so far as recommending a general rule to this effect. However, we do recommend that every statutory defence makes it clear whether it places a legal or an evidential burden on the defendant. This will determine whether the defendant merely has to raise evidence that puts the defence in issue, or whether he or she must convince the court that the defence is made out. Section 9 of the Unsolicited Electronic Messages Act provides a good example of a provision that clearly specifies that the legal burden of establishing the statutory defence is on the defendant.
8.37Another way of placing the burden of proving a particular matter on a defendant is by way of statutory presumption. In this context, a statutory presumption means that if the enforcement agency proves fact A, then fact B arises by way of presumption, which can only be rebutted by the defendant convincing the court of the alternative. There are a small number of examples of such statutory presumptions in existing pecuniary penalty regimes. There are a number of reasons why such presumptions may be used within a penalty regime, including to overcome evidential difficulties that would otherwise make it impossible to assign liability to certain parties.
8.38Wherever they are used, statutory presumptions should make it clear whether they can be rebutted merely by raising evidence to the contrary (an evidential burden of proof), or whether the defendant bears the burden of convincing the court of the alternative (a legal burden of proof). Not all existing penalty provisions do this. Again, section 9 of the Unsolicited Electronic Messages Act provides a useful example of a provision that makes such matters clear. Under section 9(2), evidence that the recipient of the message used the unsubscribe facility creates a presumption that he or she withdrew consent. The legal burden of rebutting that presumption, and establishing that there was in fact consent to receive the message, is on the defendant, as is made clear by section 9(3).
8.39Statutory presumptions (and deemed liability provisions, discussed below) may be desired to achieve regulatory objectives efficiently. However, as noted in the Australian Law Reform Commission’s report on civil penalties:
… legislators must always balance efficacy arguments for reversing the onus of proof against fairness issues such as the harshness of the penalty and the impact on the segment of the regulated community that is likely to be subject to the deeming provision.
8.40We note that Australian guidelines recommend that the use of presumptions should be kept to a minimum.
Deemed liability provisionsTop
8.41Deemed liability provisions also have the effect of imposing a burden of proof on defendants. Deemed liability means that, if the enforcement agency establishes the liability of person A, the liability of person B is deemed also to have been established. The burden is on person B to exonerate him or herself (or itself) from liability. For instance, a company may be deemed liable where the liability of the directors is made out, or vice versa.
8.42Again, deemed liability provisions require robust policy justification and a balancing of regulatory efficiency with fairness. This is even more important because deemed liability provisions reverse the burden of proof for the defendant’s entire liability for the penalty, not just one element of the defendant’s liability.
8.43The final matter for discussion is who has the burden of proving contested facts relevant to penalty quantum. In the criminal sphere, if facts relevant to sentencing are disputed, the Sentencing Act 2002 provides that the prosecutor must prove the existence of disputed aggravating facts and must disprove any disputed mitigating facts raised by the defendant. The burden of proving contested facts relevant to sentencing is therefore clearly on the prosecution.
8.44The courts have essentially applied a criminal sentencing framework to pecuniary penalties: the court determines a starting figure and then takes mitigating and aggravating factors into account. But the question of who has the burden of proving or disproving the mitigating or aggravating factors in question does not appear to have been considered.
8.45Arguments about penalty quantum may be particularly likely where courts are trying to determine the extent of financial damage or gain caused by the defendant’s conduct. Both sides may put forward competing expert analysis of complex evidence – for example, the extent to which the defendant’s conduct lessened competition in a market. That is likely to be contested, particularly if large sums are involved.
8.46We suggest that policymakers consider whether to address these matters by imposing the burden of establishing disputed facts on the enforcement agency. That will depend on the particular regulatory regime. Such an approach may not be appropriate for penalty regimes involving large corporate entities and where a policy decision has been made to allow penalty quantum to be set as a percentage of company turnover, expressly to deal with situations where commercial gain cannot be readily ascertained.
G5 The burden of proving all the elements of a contravention that results in a pecuniary penalty should usually be on the enforcement agency bringing proceedings
A pecuniary penalty provision should only place the burden of proving a matter in issue on a defendant where doing so is reasonable and can be demonstrably justified. This might include where:
- the person bringing proceedings would face serious difficulty in proving the matter, and the defendant has peculiar knowledge of the relevant facts; or
- it would be extremely difficult or expensive to require the person bringing proceedings to provide proof, and that proof could be provided readily by the defendant; or
- a policy decision has been made that it is appropriate, in the particular circumstances, for the regulated community to be encouraged to comply with certain standards or take certain precautions, having regard to wider considerations of justice and fairness.
Where it is justifiable to impose a burden of proof on a defendant, this should generally be an evidential rather than legal burden. A legal burden should only be imposed on a defendant if it is clear that the desired regulatory outcome cannot be achieved by imposing only an evidential burden.
Pecuniary penalty provisions should be drafted to minimise any ambiguity as to:
- who has the burden of proving all matters in issue, including the elements of the breach, defences, and matters relating to penalty quantum; and
- whether a burden is an evidential or legal one.