The Australian Civil Penalties Regime

We are happy to confirm the attendance of solicitors for CPD purposes on their individual CPD records.

In 1993, the law relating to enforcement of the statutory duties of company officers in Australia was fundamentally reformed when the civil penalty regime, currently contained in Pt 9.4B of the Corporations Act 2001 (Cth), was introduced. The reforms were designed to enable Australia’s ‘company law watchdog’– the Australian Securities and Investments Commission (ASIC) – to deal with corporate misconduct more effectively than under the previous criminal law regime by providing it with a regime that relied on ‘strategic regulation theory’ and the ‘pyramid of enforcement’ model.

This theory holds that enforcement actions should be backed up by a framework of sanctions pyramidal in shape. Regulators should escalate the sanctions in the pyramid as contraventions of the law become more serious, with criminal liability at the apex only for continued non-compliance or the most serious contraventions. ASIC has enjoyed some success in using the civil penalty regime against directors in high profile cases. Nevertheless, it is contended that ASIC’s ability continue to use the regime effectively is being undermined by a number of factors. Principal amongst them is the courts’ treatment of civil penalties as quasi-criminal offences.  

This has given rise to evidential, procedural and enforcement problems for ASIC in civil penalty proceedings, which will be the focus of this seminar and which are clearly demonstrated in the notorious James Hardie asbestos case. In its consideration of developments in Australia, this seminar will also offer the Australian experience as an example of the difficulties of corporate law reform: that which might work well in theory, here ‘strategic’ regulation and pyramidal enforcement, may still face difficulties in practice – especially if the courts do not fully embrace the theory. The ideal solution is the enactment of legislation to overcome the problems created by the courts’ treatment of civil penalty issues.  If this step was taken, ASIC would be better placed to implement Parliament’s aim and be a more effective regulator.

Dr Vicky Comino is a Lecturer at the TC Beirne School of Law at The University of Queensland. Dr Comino's main research area is corporations law, and in particular the regulation of corporate misconduct. Before commencing an academic career, she practised as a solicitor working at Morris Fletcher & Cross (now Minter Ellison Lawyers) in the fields of corporate law, leasing, commercial and residential conveyancing, strata development, securities and opinion work. Over the years, Dr Comino has worked voluntarily for Legal Aid, South Brisbane Immigration & Community Legal Service, Women's Equal Opportunity (WEO) and Justice and the Law Society (JATL) (UQ). She has also served on numerous committees, most recently as the only academic on a major Queensland Law Society accreditation committee for the accreditation of lawyers as Business Law Specialists.

Dr Comino's recent articles have addressed topics in the corporations law area, particularly the difficulties facing the use of civil penalties by calling for Parliament to pass legislation to resolve procedural obstacles. Her 2015 monograph Australia's “Company Law Watchdog”  –  ASIC and Corporate Regulation, which  focuses on exploring how, and to what extent, ASIC in its role as corporate regulator can achieve more effective regulation of the corporations legislation certainly comes at a time when ASIC’s performance is under increasing public scrutiny. This is a result of a number of recent parliamentary inquiries into ASIC’s  performance and capabilities prompted by a string of high profile financial advice scandals, including those which engulfed major banks such as the Commonwealth Bank of Australia and the National Australia Bank. It also consolidates her position as a leading researcher in Australia on corporate regulation. Dr Comino holds the degrees of BA, LLB (Hons), LLM and PhD (UQ).  

This is a free seminar and registration in advance is not required. Light refreshments will be available after the seminar. We are happy to confirm the attendance of solicitors for CPD purposes on their individual CPD records. The University of Leeds School of Law is accredited by the Bar Standards Board to provide CPD for barristers at the Bar of England & Wales. This seminar is accredited with 1 CPD hours for barristers at the Bar of England & Wales.