The Australian Law Reform Commission (ALRC) released its discussion paper in late 2019 and is calling for further submissions before the end of the month to address the number of reforms it proposed to overhaul corporate criminal responsibility regimes.

As the deadline nears, Lawyers Weekly notes some of the key takeaways to consider prior to potential, and major, reform changes. For one, the ALRC proposed a coherent model of criminal and civil contraventions, which would attribute criminal liability to the corporations as well as hold senior executives liable for failing to prevent such conduct.

The ALRC said its view is “a principled approach [that] can reveal a distinct purpose” for the corporate responsibility: “one that reserves it for instances of corporate misconduct in that it cannot adequately be regulated by civil penalties.”

The discussion paper added: “If the principled approach is implemented, this approach would have the effect of reducing the exposure of corporations to criminal penalties in comparison to the current position while simultaneously improving the efficacy of the criminal enforcement where it is indeed appropriate and necessary.”

The ALRC has proposed broad legislative amendments to Australia’s existing criminal liability regime in corporate spaces, which it has considered to be incoherent with any principled distinction between the imposition of civil and criminal liability.

Additionally, the paper notes there should be a complete recalibration of any unlawful conduct as it applies to corporations in Australia, which would remedy the current and existing diaspora of criminal conduct and ensure that more trivial regulatory issues are dealt with by way of administrative civil penalty notices.

“Under this model, the primary form of corporate regulation would be civil rather than criminal,” the discussion paper noted. “Civil contraventions would be divided between CPP provisions and CPN provisions. CPN provisions and criminal offences would not apply to the same contraventions, unless the criminal offence captures a greater level of wrongdoing (such as by a fault element).”

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The ALRC added that further legislative reform is needed in relation to the attribution of criminal liability to corporations. It has proposed a single method pursuant to which, subject to due diligence defence, the conduct and state of mind of “associates” of the company are ultimately then attributable to the company.

An additional accountability regime has also been proposed to subject senior partners that are in a position to influence the company’s conduct. These senior executives will then receive a civil penalty in circumstances when the company contravenes.

“Where the statutory regime currently provides that senior officers will only be liable in conduct to which they were accessories, or where they have personally contravened a director’s duty, the proposals will ensure that senior officers can also be held liable where they were in a position to prevent corporate misconduct, and failed,” it said.

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