Successful compliance and enforcement actions

Compliance and enforcement is a cornerstone of the implementation of the laws and policies administered by government departments and authorities.

Effective compliance and enforcement is important to promote voluntary compliance and deter and penalise non-compliance. Compliance and enforcement activities are particularly important where non-compliance can have serious impacts on third parties and the public interest, such as safety and the environment.

Compliance and enforcement activities will vary according to the facts and circumstances of each matter and the relevant legislative and policy frameworks governing each matter. However, there are a number of overarching principles and issues that will be common to most, if not all, compliance and enforcement actions.

This article focuses on:

• Regulatory principles
• Establishing the elements of an offence
• Determining liability for an offence.

Regulatory principles

There are a number of key principles that are relevant to regulatory compliance and enforcement. These include that decisions about compliance and enforcement actions should be:

• Proportionate to the risk and seriousness of the alleged misconduct or offence
• Taken on a consistent basis with similar misconduct or offences subject to similar action
• Made in a transparent and accountable manner
• Based on impartial and objective considerations
• Evidence based
• Taken in a timely manner.

Action taken by public authorities should also be in accordance with model litigant principles.

Ensuring that compliance and enforcement actions have regard to and are made in accordance with these regulatory principles will help to ensure that actions are appropriate and justifiable.

Fundamental considerations

There will be a range of issues to take into account and have regard to in deciding what, if any, compliance and enforcement action should be taken in any particular matter.

However, there will usually be two fundamental and overriding considerations. These are:

• There must be sufficient evidence to support the proposed action
• It must be evident from the facts of the matter, and the surrounding circumstances, that action is in the public interest.

Linking back to the regulatory principles, a fundamental requirement to support taking compliance and enforcement action is establishing that the elements of the alleged offence(s) have been established. This includes ensuring that there is relevant and sufficient evidence to prove the elements of the offence.  This will be an essential part of the investigative stage and be critical to informing what future decisions will be taken.

The investigation of alleged offences and the decision as to what action to take, will usually require that consideration be given to the following matters:

• Who is the person or persons who have committed the alleged offence and should be subject to action?
• What are the details of the alleged offence and the facts and circumstances that prove the commission of the offence?
• When has the alleged offence been committed or when did the conduct occur that constituted the alleged offence?
• How has the alleged offence occurred or been committed?

Liability

Once it has been established that an offence has been committed, consideration needs to be given as to the person or persons who should be the subject of further action. Some offences very clearly define the relevant person, such as an offence that imposes liability on a particular person such as the owner of land or a building or the holder of an approval or permit.

In these types of offences, there is usually little difficulty in identifying the relevant party. However, even in these types of offense, depending on the facts and circumstances, issues may still arise that need to be considered. For example, in respect of an offence that imposes liability on the ‘owner’ of a thing, there may be questions as to who is the relevant owner? This could include situations such as there being multiple owners, individuals in bankruptcy or with diminished capacity, companies in administration or liquidation, financiers appointing receivers and managers, etc.

For other types of offences, liability is imposed on any person who commits the offences. For example, a person who causes environmental harm or fails to comply with an approval.

Depending on the relevant offence and facts and circumstances, liability could fall on a range of persons, such as:

• A property owner
• An occupier or lessee of property
• Contractors or subcontractors carrying out works.

Many offences also include provision for executive officer liability, whereby if a corporation commits an offence, the executive officers of the corporation are also guilty of an offence.  It may therefore be necessary to consider the potential liability of a number of parties to determine which party or parties should be subject to further action or what action is appropriate for that party having regard to their level of culpability.

Key takeaway

Compliance and enforcement action is an important part of the administration of laws and policies.

Effective and efficient compliance and enforcement action is crucial to ensure the integrity of laws and policies, build and maintain public confidence and trust and ensure the wise use and expenditure of public funds.

Authored by:

Stafford Hopewell, Partner

Claire Lovejoy, Director