I mentioned in Corporate Crime Critiques – Should Regulators be Prosecutors? Part 2 that Regulators are, arguably, better placed than DPPs to assess the public interest in prosecuting an offence under their legislation. It raises the question: can we expect DPPs to be appropriately sensitive to the regulatory needs of any given market? The CDPP made some interesting comments that touch on these issues in a submission to the Review of Medicines and Medical Devices Regulation, in January 2015.
In particular, the CDPP said the following:
The Prosecution of Regulatory Offences
Page 97 of the Discussion Paper contains the following:
In contrast, as outlined above, the maximum penalty for an advertising breach is 60 penalty units ($10,200). It has been suggested that the low penalty levels may make mounting a successful prosecution for an advertising breach difficult, as the breach would be assessed by the Commonwealth Director of Public Prosecutions (CDPP) as a trivial offence under the CDPP’s prosecution policy and guidelines. These concerns feed into a perception that the TGA is a ‘toothless tiger’ when it comes to advertising breaches of the Act, Regulations, and Code.
It is not correct to suggest that the fact a penalty is low would of itself make a successful prosecution difficult. However, this statement is probably meant to convey that a low maximum penalty may make it less likely that a prosecution will be commenced as the CDPP would assess the matter as trivial. Even recast in that way, this is not correct. While paragraph 2.10 of the Prosecution Policy does provide that one of the factors that may arise for consideration in determining whether the public interest requires a prosecution includes the seriousness or, conversely, the relative triviality of the alleged offence, it is incorrect that offences carrying only fines are automatically regarded as trivial. In considering the public interest in bringing a prosecution the CDPP will always carefully consider the views of the referring agency as to the importance of addressing the particular offending conduct. This is a highly influential aspect of the characterisation of the seriousness of any given offence of that kind. For example, the CDPP recently prosecuted a national supermarket chain for offences relating to defective weighing equipment, resulting in a $3,000 fine. The views of the National Measurement Institute as to compliance with the legal requirements were important considerations in deciding to prosecute.
Each case is considered on its own merits. That consideration would include all the relevant factors including the facts of the case, any previous offending and the circumstances of the defendant as well as the maximum applicable penalty. In the case of matters that might be described as regulatory, either because of the low penalty set by Parliament or the nature of the offence, the CDPP notes that while these matters might be regarded as less serious when compared to major drug or tax cases they can be critically important for the investigatory agency in seeking to modify public or industry behaviour through enforcing the law.
The CDPP recognises this imperative and seeks to assist the compliance and enforcement objectives of such agencies by giving appropriate weight to the public interest in the enforcement of regulatory offences notwithstanding that the maximum penalty might only be a fine. It is for this reason that the CDPP has authorised the commencement of prosecutions for minor offences even where the expected penalty will only be a fine and, on occasions, a relatively small fine. The CDPP recognises that there can be a clear deterrent impact from a successful prosecution in these circumstances.
Finally we note that in June 2014 the CDPP reorganised its practice into 6 practice groups to better reflect its national approach to the work of the referring agencies. One of the practice groups is International Assistance and Specialist Agencies. This practice group recognises and seeks to give appropriate recognition to referrals from specialist investigative agencies that are usually low in volume and compliance focussed. The referrals from the Therapeutic Goods Administration are dealt with by this practice group. (My emphasis.)
The rhetoric is reassuring for regulators, until the words “even where the expected penalty will only be a fine and, on occasions, a relatively small fine”. Punishment for corporate crime will virtually always “only be a fine”. And punishment for summary offences committed by corporations will virtually always be “a relatively small fine”.
Full submission available here.