Australia: ALRC review into corporate criminal liability

WHO SHOULD READ THIS

  • Senior Executives and Officers of Australian corporations.

THINGS YOU NEED TO KNOW

  • The Australian Law Reform Commission is conducting a review into ways to strengthen laws to hold corporations and their officers accountable for criminal misconduct.

WHAT YOU NEED TO DO

  • Ensure you are complying with current laws and keep abreast of the outcome of the review.  You may wish to consider making or contributing to submissions to the Australian Law Reform Commission (ALRC).

The Federal Government has commissioned a review by the ALRC to provide a “simpler, stronger and more cohesive regime for corporate criminal responsibility”, in what many consider to be a further reaction to issues raised by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

This comes at a time of increased regulatory presence in the area of corporate wrongdoing, with a focus on piercing the corporate veil and holding individuals accountable for corporate behaviour and decision-making.

Terms of Reference

The review, announced by Attorney-General Christian Porter this week, will make recommendations as to whether or not reforms are necessary to improve Australia’s corporate criminal liability regime and, if so, the form those reforms might take, including addressing any identified practical challenges to investigate and prosecute.

Justice Robert Bromwich, Federal Court Judge and former Director of the Commonwealth Director of Public Prosecutions, will lead the ALRC review.

The Terms of Reference require the ALRC to review:

  • the policy rationale for Part 2.5 of the Commonwealth Criminal Code contained in Schedule 1 of the Corporate Criminal Code Act 1995 (Cth) (the Code);
  • the efficacy of Part 2.5 of the Code as a mechanism for attributing corporate criminal liability;
  • the availability of other mechanisms for attributing corporate criminal responsibility and their relative effectiveness, including mechanisms which could be used to hold individuals (e.g. senior corporate office holders) liable for corporate misconduct;
  • the appropriateness and effectiveness of criminal procedure laws and rules as they apply to corporations; and
  • options for reforming Part 2.5 of the Code or other relevant legislation to strengthen and simplify the Commonwealth corporate criminal responsibility regime.

In preparing its report, the ALRC is required to consider:

  • the final report of the Banking Royal Commission and the 2017 report of the ASIC Enforcement Review Taskforce and options for reforming Part 2.5 of the Code (or other corporate liability regimes) to facilitate implementation of the recommendations made by, or to address issues highlighted by, those reports;
  • comparative corporate criminal responsibility regimes in relevant foreign jurisdictions;
  • the potential application of Part 2.5 of the Code to extraterritorial offences by corporations;
  • possible alternatives to expanding the scope and application of Part 2.5 of the Code, such as introducing or strengthening other statutory regimes for corporate criminal liability; and
  • whether Part 2.5 of the Code needs to incorporate provisions enabling senior corporate officers to be held liable for misconduct by corporations.

The ALRC is due to publish its report on 30 April 2020.

Consultation

In the current climate, where regulation and enforcement of corporate and executive accountability is high, we suspect that the ALRC is likely to make recommendations to expand the scope for prosecution of corporations and individual office holders for corporate criminal misconduct.

As part of the review, consultation will take place with stakeholders who have expertise and experience in the corporate law and white-collar crime sectors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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