Traditionally, both in New Zealand and cognate legal systems, the law has been divided into criminal law and civil law. Different doctrines and considerations apply to these two large subsets. Essentially, the task of the criminal law is to deter unlawful behaviour and to punish infractions of it. The essential purpose of civil law is to afford compensation or other relief to a plaintiff who has been “wronged”.
In recent years statutes that affect large subsets of human endeavour have begun to emerge. These statutes do not observe the traditional sharp distinctions between the civil and the criminal law. Amongst other things they create “pecuniary penalties”. These significant statutes have been overdue, for some little time now, for a first principles review.
Pecuniary penalties are imposed by the High Court of New Zealand under the authority of a statute for a breach of that legislation. The primary purposes of such a regime are to secure compliance with the statutory requirement and to penalise non-compliance.
The decision made by the High Court is discretionary. It can involve very large sums of money. This is done without a criminal trial or a conviction being entered. As a technique pecuniary penalties have drawn increasing attention from ministries of the State. It is attractive because it avoids the protracted and expensive litigation associated with a criminal trial, and it is a more flexible regulatory tool.
At the suggestion of the Legislation Advisory Committee, and as referred to us by the Minister of Justice, the Commission has undertaken a first principles review as to whether such penalties are desirable, how they should be formulated and applied, and in particular what safeguards should attend their employment.
These issues are fundamentally important given the widespread resort to pecuniary penalties in New Zealand statutes today. They are a valid statutory tool and the Commission anticipates that they will be included in new legislation with growing frequency.
This Report sets out the Commission’s view of the present state of the law relating to pecuniary penalties, with particular emphasis on the circumstances in which they should be used and what sort of legal framework should be devised for them.
This area of the law has been something of a “sleeper”. However, the use of these statutes is becoming more widespread and will have an impact on all levels of institutional and legal practice. The area is important also to those within government involved in the conception and design of statutory regimes where tools are required for the purposes of enforcement. The Report is therefore important on a whole-of-government basis. It should also be of benefit to courts, which have to grapple with the emerging issues in this regime.
Sir Grant Hammond