Option one (levelling up penalties to the existing higher range, with some additional increase to anticipate the effects of inflation) would have the advantage of minimal change for some jurisdictions and access to the jurisprudence of the courts in those jurisdictions with higher penalties. The result could be expected to be a highest maximum fine of close to $2 million.
The option has disadvantages. It assumes that the existing maximum fines are appropriate and optimally meet the objectives for sanctions in the model Act. This is open to question. It is also difficult to work from the existing range of fines to construct a coherent system of sanctions that give credibility to and encouragement for the system of graduated enforcement that we propose should underpin the model Act. For these reasons we do not recommend option one.
Option two (a new range of fines, with substantial increases for breaches, particularly those that involve gross negligence or recklessness and a serious failure to address hazards and risks) would reinforce the deterrent effect of the model Act and allow courts a greater capacity to respond meaningfully and proportionately to the worst breaches by duty holders for whom the existing range of fines may have little punitive effect. We note that in a case where death or serious injury results from a breach, the social and economic costs are likely to be far greater than even the maximum fines ($3 million for a corporation in the worst case) that we are recommending.316
We consider option two to conform to the objectives of the model Act and we recommend that option two be adopted.
Under option three, a first offender in each of the three categories of offence would be liable to a maximum penalty of two thirds of the maximum fine and a repeat offender would be liable to have the entire maximum fine imposed.
For example:
for a Category 1offence, the maximum fine would be $2 million for a first offender that was a corporation and $3 million for a repeat corporate offender;
for a Category 2 offence the maximum fine would be $1 million for a first offender that was a corporation and $1.5 million for a repeat corporate offender; and
for a Category 3 offence the maximum fine would be $0.3 million for a first offender that was a corporation and $0.5 million for a repeat corporate offender.
Similar adjustments would apply to the maximum fines for the other categories of offenders (individuals, officers, workers and others).
Even though the approach of providing higher fines for repeat offenders exists under the SA Act and the WA Act, we do not recommend option three. We consider that it is not necessarily the case that a first offence will justify a lesser penalty. Offenders may simply have gone undetected despite flagrant disregard for their duties of care. In addition we consider that the courts would, particularly if there is clear sentencing guidance, be able to make appropriate allowance for a previous record of compliance.
