Criminal Liability in Regulatory Contexts Responses - Law ...

1.1312 The finding of the empirical study and an explanation of those findings are
reported in Michelle Welsh, ‘Civil penalties and strategic regulation theory: the
gap between theory and practice’ (2009) 33(3) Melbourne University Law Review
908-33 and Michelle Welsh, ‘The Regulatory Dilemma: The Choice between
Overlapping Criminal Sanctions and Civil Penalties for Contraventions of the
Directors’ Duty Provisions’ (2009) 27 Company and Securities Law Journal 370.
1.1313 It would be a mistake for legislatures to assume that the introduction of
overlapping criminal sanctions and civil penalties will automatically result in a
reduction in the use of criminal sanctions for regulatory offences. If overlapping
civil penalties and criminal sanctions are introduced with the intention that
regulators will utilise them in a manner envisaged by responsive regulation theory
then the provisions should be drafted in such a way as to encourage regulators to
do this. One way of attempting to ensure that this occurs is for legislatures to
direct regulators that they must consider whether a civil penalty application
provides an adequate regulatory response prior to considering a criminal
prosecution. In order to ensure that criminal prosecutions are reduced it might
be necessary to repeal criminal sanctions for those regulatory contraventions for
which civil penalties have been introduced. If these regulatory contraventions
occur, a civil penalty application would be the most severe enforcement action
that could be instigated by the regulator. An example of such a provision under
the Australian civil penalty regime is the statutory duty of care contained in
s180(1) Corporations Act 2001 (Cth). 41
41 ASIC has issued many successful civil penalty applications alleging contraventions of this section. See
Michelle Welsh, ‘Civil penalties and strategic regulation theory: the gap between theory and practice’ above
n 1.
243