The Australian Law Reform Commission (ALRC) has published a very significant paper on the future of prosecuting corporations and their officers in the post-Financial Services Royal Commission environment. The ALRC’s Discussion Paper has a broad scope, the key themes of which are the rationale behind corporate criminal responsibility and the enforcement mechanisms available for prosecuting corporations and individuals.
A number of the ALRC’s proposals have significant legal and commercial implications for corporations and individuals. Of particular significance is the ALRC’s proposal that senior personnel should be held personally liable for the conduct of a corporation where they were in a position to influence the relevant conduct and they failed to take reasonable measures to prevent the corporation’s conduct.
A briefing paper summarising the key areas of proposed reforms and our initial views is now available. Please click on the cover or downloadable link above, and see a key point summary of the ALRC’s proposals below.
Key areas of proposed reform:
- Unlawful corporate conduct should be categorised to better reflect the distinction between criminal misconduct, civil misconduct, and low-level civil contraventions.
- There should be a single method for attributing corporate criminal liability, subject to a defence of due diligence.
- Individuals should be liable where they were in a position to influence corporate misconduct, unless they prove they took reasonable measures to prevent the misconduct.
- The utility and appropriateness of deferred prosecution agreements is being considered.
- Factors relevant to sentencing corporations and making civil penalty orders should be clarified in statute, and a broader range of non-monetary consequences available, including disqualification from government work (debarment).
- A positive due diligence obligation on corporations to prevent the commission of crimes overseas is being considered.
The ALRC has sought submissions on a number of proposed reforms to the Commonwealth corporate criminal responsibility regime. Submissions are open until 31 January 2019. We will be engaging with our clients throughout the consultation process.
The ALRC will publish its Final Report on 30 April 2020.
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2019