The Law Commission has released an issues paper on the use of financial penalties by enforcement agencies to punish corporates and individuals for breaches of the law.
Bodies such as the Commerce Commission are increasingly resorting to civil pecuniary penalties (CPPs) for recourse rather than pursuing criminal sanctions to deal with a range of commercial and financial offending such as insider trading and price fixing. Penalties are imposed by the High Court following a civil trial (thus the level of proof is on the balance of probabilities), as a debt due to the Crown, and neither imprisonment nor criminal conviction can result. However, CPPs can give rise to serious liability: up to $1 million for an individual, and up to $10 million (or a separate amount based on a commercial gain calculation) for corporates.
The issues paper describes how civil pecuniary penalties are used in New Zealand legislation. It asks questions about the nature of these penalties and when it might be appropriate to use them. It also asks questions about what process and protections should be used when they are imposed.
The closing date for submissions is 15 February 2013. The issues paper is available here.