ALRC Corporate Crime – Discussion Paper

The Australian Law Reform Commission (ALRC) today released a Discussion Paper, Corporate Criminal Responsibility (DP 87).

Building on the work of the Hayne Royal Commission, the ALRC has found that Commonwealth criminal law as it applies to corporations is impenetrably complex and in need of significant reform. There is an overregulation by the criminal law of low-level contraventions and a failure to effectively use the criminal law for serious contraventions.

As a result, there is no principled regulation in any meaningful sense — diluting the efficacy of corporate criminal responsibility and undermining the rule of law.

If to be labelled a criminal is to have any sting, the criminal law must be exclusively focused on serious morally reprehensible conduct, and yet:

It is a criminal offence for a corporation to fail to notify ASIC of a change in office hours.

The ALRC seeks stakeholder submissions on 23 proposals for reform to the Commonwealth’s corporate criminal law regime, and asks 11 questions on particular areas of reform. The Discussion Paper addresses a number of aspects of corporate criminal liability, including:

• the principled division between criminal offences and civil penalty provisions;
• the method for attributing criminal liability to corporations;
• individual liability for corporate offences;
• deferred prosecution agreements;
• penalties and the sentencing process;
• illegal phoenix activity (deliberate liquidation with the intent to avoid creditors and continue operations through a new entity); and
• the implications of the transnational nature of business and extraterritorial offences.

President of the ALRC, the Hon Justice Sarah Derrington, said, “These proposals seek to simplify and provide a coherent regulatory framework that achieves principles-based regulation.”

This Inquiry comes at a time of renewed focus on protecting Australian consumers from egregious conduct by corporations. Corporate regulation must both improve corporate behaviour and be alive to the impact that corporations have on the health of the Australian economy as a whole. Accountability for misconduct must be necessarily balanced with the need to ensure that corporations have flexibility to innovate.

On 10 April 2019, the ALRC received Terms of Reference from the Attorney-General, the Hon Christian Porter MP, to conduct the first comprehensive review of Australia’s corporate criminal responsibility regime since the enactment of the Criminal Code. Over the past 7 months, the ALRC has conducted nearly 60 consultations across industry, regulators and legal professionals.

The ALRC is seeking submissions to the Discussion Paper until 31 January 2020.

The Final Report is due to the Attorney-General on 30 April 2020.

Corporate Criminal Responsibility (ALRC DP 87) and summary reports are available for viewing or free download at