High Court reinstates agreed penalty submissions in civil matters

The High Court has today upheld the appeal from the Full Federal Court that applied the prohibition on sentencing submissions in criminal matters in Barbaro v R (2014) 253 CLR 58 to civil penalty regimes: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46.

The effect is that regulators such as ASIC, the ACCC, Fair Work etc will be able to return to the long established practice of settling matters on the basis of agreed facts and agreed submissions as to an appropriate penalty in the matter.

The High Court expressly held that the Court’s reasoning in Barbaro does not apply to civil penalty matters.  The process of sentencing in criminal matters and setting an appropriate pecuniary penalty in civil matters are distinct.  In civil matters, the task of the Court remains that as stated previously in NW Frozen Foods and Mobil Oil according to the following statements of principle:

·         Fixing the quantum of a civil penalty is not an exact science, there is a permissible range in which Courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.

·         Within that range the Court will not depart from the submitted ‘agreed’ penalty merely because it might have imposed another figure.

·         However the Court is not bound by the agreed penalty suggested by the parties.

·         The question for the Court is always: Is the proposed penalty an appropriate amount?

·         The Court must satisfy itself that the submitted penalty is appropriate.

A copy of the decision is available at: http://eresources.hcourt.gov.au/showCase/2015/HCA/46

9 December 2015

Michael Rennie is a member of 6 St James' Hall Chambers, Sydney. He specialises in public and commercial law, in particular competition law. Michael has significant expertise in relation to enforcement action by ACCC, ASIC, APRA and other Commonwealth regulators.