Criminal or civil penalties?

71.83 A criminal penalty is the only remedy available for a breach of the use and disclosure offences under Part 13 of the Telecommunications Act. For example, s 276 provides that a person who contravenes that section is guilty of an offence punishable by imprisonment for a term not exceeding two years. Criminal offences, whether in statute or common law, are considered to be made up of physical and mental elements, also described as the prohibited act (actus reus) and the criminal mental element (mens rea). The mental element for the primary and secondary disclosure offence provisions under Part 13 is ‘intention’.[92]

71.84 In a regulatory context, criminal sanctions serve as a last-resort punishment after repeated or wilful violations. [93] There have been no prosecutions for breaches of the prohibitions under Part 13 since the Telecommunications Act was enacted. In DP 72, the ALRC asked whether a breach of Divisions 2, 4 and 5 of Part 13 of the Telecommunications Act should attract a civil penalty rather than a criminal penalty.[94]

71.85 Civil penalty provisions are founded on the notion of preventing or punishing public harm. The contravention itself may be similar to a criminal offence and may involve the same or similar conduct, and the purpose of imposing a penalty may be to punish the offender, but the procedure by which the offender is sanctioned is based on civil court processes. Civil monetary penalties play a key role in regulation as they may be sufficiently serious to act as a deterrent (if imposed at a high enough level) but do not carry the stigma of a criminal conviction. Civil penalties may be more severe than criminal penalties in many cases.[95]

Submissions and consultations

71.86 A number of stakeholders supported a breach of Divisions 2, 4 and 5 of Part 13 attracting civil penalties rather than criminal penalties.[96] For example, the Australian Privacy Foundation submitted that:

in our view breaches of the privacy protection provisions of the Telecommunications Act should attract civil rather than criminal penalties—the lower burden of proof is appropriate. The level of civil penalties must however be sufficient to act as a significant deterrent to calculated non-compliance.[97]

71.87 ACMA submitted, however, that civil penalties, in addition to criminal penalties, may assist it in better ensuring compliance with the requirements of Part 13 in a self-regulatory environment.[98] The DBCDE submitted that, given that the offences in Part 13 apply to organisations and their employees, both criminal offences and civil penalties should apply to provide the maximum flexibility to deal with particular cases.[99]

ALRC’s view

71.88 The Telecommunications Act should be amended to provide that a breach of Divisions 2, 4 or 5 of Part 13 of the Act may attract a civil penalty or a criminal penalty.

71.89 The ALRC has concluded that criminal penalties continue to be justified for the intentional use and disclosure of information or documents obtained during the supply of telecommunications services. As noted above, this information is highly sensitive, and includes information about when, how and with whom individuals communicate. Individuals expect a high level of protection of this information or documents relating to their use of telecommunications services. The intentional use and disclosure of this information in contravention of Part 13 so seriously offends this expectation that criminal penalties are justified to deter and punish such conduct. Further, the current regime appears to be working effectively. The ALRC notes that there have been no prosecutions for breaches of the prohibitions under Part 13 since the Telecommunications Act was enacted.

71.90 The Attorney-General’s Department publication, A Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers (the Guide), states that it is important that civil penalties be used in appropriate and justifiable contexts. Civil penalties are otherwise open to criticism for being too soft (in not carrying a criminal penalty) or for being too harsh (in not carrying the safeguards of criminal procedure such as a requirement for proof beyond reasonable doubt).[100]

71.91 The Guide provides that the inclusion of civil penalty provisions is most likely to be appropriate and effective where each of the following circumstances is present:

  • Criminal punishment is not merited. Only contraventions of the law involving serious moral culpability should be pursued by criminal prosecution. Offences involving harm to a person or a serious danger to public safety or knowing or reckless dishonesty by a person are examples.

  • The penalty is sufficient to justify court proceedings. A contravention should be punishable by civil penalty only if the size of the maximum penalty will justify the expense and time required to take the matter to court.

  • There is corporate wrongdoing. Civil penalties have traditionally been directed against corporate wrongdoing where imprisonment is not available (because the wrongdoing is by a corporate entity). In this case, the financial disincentive that civil penalties provide is most likely to be useful and effective.[101]

71.92 The inclusion of civil penalties in Part 13 of the Telecommunications Act is appropriate and justifiable in each of the circumstances outlined above. Further, the introduction of civil penalties into the Telecommunications Act will provide ACMA with a greater range of options for enforcing the Act when contraventions fall short of a criminal offence.

71.93 The introduction of civil penalties in addition to criminal penalties raises the issue of how a contravention attracting a civil penalty should be distinguished from an offence that attracts a criminal penalty. The Guide states that it is acceptable to have the same physical elements covered by both civil penalties and criminal sanctions where culpability differs.[102]

71.94 A number of provisions under federal regulatory laws provide for parallel criminal liability and civil penalties for the same conduct.[103] Under this model criminal or ‘offence’ provisions generally require proof to a criminal standard (beyond reasonable doubt) of physical elements and certain fault elements (usually intention or recklessness). Civil penalty provisions may require proof of the same physical elements to a civil standard (on the balance of probabilities), however, they often do not require proof of any fault elements.

71.95 This model is appropriate in the context of Part 13 of the Telecommunications Act. Under this model, the requirement to prove intention will distinguish criminal liability from civil liability. Intention therefore will only need to be proven when a criminal penalty is considered to be appropriate in the circumstances.

71.96 The introduction of civil penalties into Part 13 of the Telecommunications Act will require the introduction of a number of additional procedural provisions. For example, provisions should be introduced to ensure that an order imposing a civil penalty is not made against a person where the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention. It is analogous to the ‘double jeopardy’ rule applicable to criminal offences.[104] The Guide sets out a number of other procedural provisions that will be relevant if civil penalties are introduced into Part 13 of the Telecommunications Act. [105]

71.97 As noted in Principled Regulation: Federal Civil and Administrative Penalties in Australia (ALRC 95), the choice of criminal or civil penalty proceedings calls for transparency in the application of discretions.

The availability of this choice can lead to uncertainty both for regulators and the regulated, and it has the potential to lead to inconsistency in the regulator’s approach to commencing proceedings. Care must be taken that the reasons that a criminal prosecution is commenced against one offender while another faces ‘only’ civil penalty proceedings are transparent and consistent. Difficulties in proving the mental elements of the offence to the criminal standard may well be the reason for the decision to take proceedings for a civil penalty in one case, while in another, it may be that the breach lacked the requisite fault.[106]

71.98 The ALRC recommends that ACMA should develop and publish enforcement guidelines setting out the criteria upon which a decision to pursue a civil or a criminal penalty is made. Enforcement guidelines have a number of benefits including improving the understanding of the regulated community as to what compliance requires; and greater accountability, transparency and consistency of regulators’ decisions.[107] Enforcement guidelines are discussed in detail in Chapter 50.

Recommendation 71-3 The Telecommunications Act 1997 (Cth) should be amended to provide that a breach of Divisions 2, 4 and 5 of Part 13 of the Act may attract a civil penalty in addition to a criminal penalty. The Australian Communications and Media Authority should develop and publish enforcement guidelines setting out the criteria upon which a decision to pursue a civil or a criminal penalty is made.

[92]Criminal Code (Cth) s 5.6(1).

[93]Australian Law Reform Commission, Principled Regulation: Federal Civil & Administrative Penalties in Australia, ALRC 95 (2002), [2.40]–[2.44].

[94]Australian Law Reform Commission, Review of Australian Privacy Law, DP 72 (2007), Question 63–6.

[95]Australian Law Reform Commission, Principled Regulation: Federal Civil & Administrative Penalties in Australia, ALRC 95 (2002), [2.40]–[2.44].

[96]Optus, Submission PR 532, 21 December 2007; Office of the Privacy Commissioner, Submission PR 499, 20 December 2007; Communications Alliance Ltd, Submission PR 439, 10 December 2007.

[97]Australian Privacy Foundation, Submission PR 553, 2 January 2008. See also I Graham, Submission PR 427, 9 December 2007.

[98]Australian Communications and Media Authority, Submission PR 522, 21 December 2007.

[99]Australian Government Department of Broadband‚ Communications and the Digital Economy, Submission PR 512, 21 December 2007.

[100] Australian Government Attorney-General’s Department, A Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers (2007), [7.2].

[101]Australian Government Attorney-General’s Department, A Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers (2007), [7.2].

[102]Ibid, [7.2].

[103]Examples appear in the Corporations Act 2001 (Cth), the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) and the Commonwealth Authorities and Companies Act 1997 (Cth).

[104] See, eg, Environmental Protection and Biodiversity Conservation Act 1999 (Cth) s 486C.

[105]Australian Government Attorney-General’s Department, A Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers (2007), [7.4].

[106]Australian Law Reform Commission, Principled Regulation: Federal Civil & Administrative Penalties in Australia, ALRC 95 (2002), [4.69].

[107]Ibid, [10.60].