As a result of a High Court decision, Barbaro v The Queen, courts are not required to adopt, as the appropriate sentence for admitted offences, any pecuniary penalties agreed between regulators and offending parties.
In effect this means that agreements negotiated and reached with the regulator before or after proceedings are commenced are not necessarily the sentence that will be imposed upon offending parties for contraventions of the law.
The extent to which agreement is reached between the regulator and offending party will be considered is as an indicator only of remorse and/or co-operation on the part of the offending party.
The courts remains responsible for sentencing and parties reaching agreement as to penalty will not bind the courts, nor restrict the courts exercising their discretion to determine the appropriate sentence.
Parties subject to prosecuting action by a regulator may choose to negotiate and agree with the regulator what they think is an appropriate penalty, but submissions to the Court will be required to be made on why the agreed penalty should be the sentence imposed by the court for that matter.
Those submissions will need to address the relevant statutory framework including sentencing principles, outcomes in similar cases, aggravating and mitigating factors relevant to the particular case to seek to persuade the sentencing judge that they should exercise their discretion to impose the agreed penalty.
In practice parties subject to regulatory action will need to be conscious of this distinction in order to:
- inform clients that reaching an agreement with a regulator is not the end of the matter as well prepared and comprehensive submissions addressing the sentencing principles, like cases and other factors will need to be prepared to put before a court to seek the imposition of the penalty agreed with the regulator; and
- explain to their clients the risk that a court may impose an outcome different than that reached with a regulator, despite submissions made by the parties.
The Barbaro decision as affirmed on 1 May 2015 in the Full Federal Court in Director, Fair Work building Industry Inspectorate v CFEMU, does not end the world of regulatory prosecutions as we know it, it merely recalibrates the manner in which the parties and the courts will approach sentencing for offences found or admitted to have been committed.