Fortnightly Roundup: Corporate Crime, Misconduct and Regulation News for 1-15 December 2016

Contents

1 Things To Think About
2 Notable Litigation Actions
3 Law & Policy Updates
4 Event Calendar
- 4.1 Submissions Open

Things To Think About

Should sentences for consumer law offences be increased? The Productivity Commission has released its draft report on the operation of the Australian Consumer Law; while generally satisfied with the performance and cooperation of the ten relevant regulators, the commission was critical of consumer law penalties. It proposes increasing maximum penalties, possibly “aligning them with the penalties for breaches of competition provisions in the Competition and Consumer Act 2010”. One knobbly issue not discussed in the report is the fact that in Victoria, owing to the state’s definition of indictable crime, ACL offences are not considered indictable: maximum penalties are expressed in dollar terms, not penalty units.

What does compliance with anti-bribery and corruption law look like for a multi-national corporate group? Hogan Lovells has published what it describes as a “global study” of Chief Compliance Officers’ attitudes and concerns. In keeping with the current emphasis placed on corporate culture in regulatory enforcement globally, the firm advises: “Compliance and ethics should be fully integrated into all operations. Senior management must emphasize the importance of compliance and ethical conduct as a core value and strategy, so employees are in no doubt that ethical conduct takes precedence over the pursuit of profit.”

Notable Litigation Actions

Quite the fortnight for the ACCC: it won its appeal in the High Court ACCC v Flight Centre Travel Group Ltd [2016] HCA 49: Flight Centre and the relevant airlines were competitors, despite Flight Centre also acting as agent for those airlines. Meanwhile, the Federal Court handed down $15M in penalties for attempted cartel conduct in ACCC v Australia and New Zealand Banking Group Limited [2016] FCA 1516. On the other hand, it lost its unconscionability case in the Federal Court: ACCC v Woolworths Limited [2016] FCA 1472. Angela Merritt’s thoughts on the latter here. It also filed an interesting little case on flushable wipes that, the ACCC says, aren’t flushable.

And for those following the AMI litigation: contempt proceedings have concluded with a $350,000 fine.

It seems that every week a regulator secures a new record fine for corporate misconduct. This fortnight it was the US DOJ (environment and natural resources division), securing it’s highest penalty to date for “deliberate vessel pollution” (Princess Cruise Lines Ltd – $40M), and, according to The Korea Times, the South Korean Trade Commission’s largest fine for misleading conduct in trade (Audi Volkswagen Korea – $32M). Closer to home, ASIC announced “Australia’s largest consumer credit remediation program” to address BMW’s responsible lending failures.