Following extensive consultation, the Australian Government’s Personal Liability for Corporate Fault Reform Bill 2012 (Cth) has been introduced into Parliament. The Bill aims to ensure that personal criminal liability for corporate fault is imposed in accordance with principles of good corporate governance and criminal justice. 

On 19 September 2012, the Australian Government introduced the Personal Liability for Corporate Fault Reform Bill 2012 (Cth) (the Bill) into Parliament as part of its initiative to ensure that personal criminal liability for corporate fault is imposed in accordance with principles of good corporate governance and criminal justice. This follows extensive consultation of the Bill, after the Bill in its draft form was released for public comment in three tranches earlier this year.

The Bill aims to reform directors’ liability by:

  • removing the imposition of personal criminal liability for corporate fault in Commonwealth legislation except in circumstances where liability is fair and reasonable;
  • clarifying the provisions that extend the liability of a corporation to an individual and the circumstances of that extension; and
  • repealing or replacing with civil liability, existing provisions which are not justified under the Principles agreed as part of the COAG Directors’ Liability reform.

The Bill will amend, among other legislation, the Corporations Act 2001, the Foreign Acquisitions and Takeovers Act 1975, the Health Insurance Act 1973 and the Therapeutic Goods Act 1989.

See the Bill and its explanatory memorandum.