Civil Penalties and Responsive Regulation: The Gap between Theory and Practice
Posted: 26 May 2012
Date Written: May 25, 2012
In theory it is possible to map the civil penalty provisions contained in Corporations Act 2001 (Cth) Part 9.4B on to an enforcement pyramid in a manner envisaged by responsive regulation. However, the data examined in this article reveals that there is a gap between theory and practice. If the regime were being utilised in a manner envisaged by responsive regulation, the Australian Securities and Investments Commission (‘ASIC’) would consider whether or not a civil penalty application was an adequate regulatory response prior to considering a criminal prosecution in the majority of cases. More civil penalty proceedings than criminal prosecutions would be issued in relation to the same types of contraventions. Neither of these is occurring. The examination of ASIC’s use of the civil penalty regime reveals that its decision-making process is different from that suggested by responsive regulation.
Keywords: corporations, enforcement, regulatory theory, civil penalties, criminal sanctions
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