In 2014, the majority of the High Court in Barbaro v The Queen (2014) 305 ALR 323 (Barbaro) held that the practice of prosecutors making submissions to a sentencing judge in criminal proceedings as to the available range of sentences was improper because it represented an opinion rather than evidence.
Earlier this month in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union FCAFC 59 (CFMEU), the Full Court of the Federal Court applied the reasoning in Barbaro to civil penalty proceedings. Accordingly, while regulators such as the ACCC, ASIC and ATO can adduce evidence in support of penalty considerations in civil penalty proceedings, they can no longer propose an agreed penalty for the court to consider as appropriate in all the circumstances.
The decision in CFMEU accordingly brings to an end the long-established practice of negotiating and submitting to the court “agreed penalties”.
The decision has significant ramifications for the manner in which regulators such as the ACCC and respondents seek to settle penalty proceedings.
The prospect of negotiating and submitting an agreed penalty to the court had been a cornerstone of the ACCC’s enforcement policy for over 20 years and parties were able to settle matters quickly on the bases that:
The CFMEU decision however will result in considerable uncertainty and cost for respondents in civil penalty proceedings. In particular:
Ironically, given that civil penalty proceedings may take longer and result in increased costs, regulators may ultimately take on fewer cases each year as their resources are tied up with ongoing matters (which would otherwise be resolved more expeditiously by agreed penalties).
In CFMEU, the court made it clear that regulators can still adduce evidence and make submissions about penalty factors and comparable decisions but they cannot submit an agreed penalty unless they are doing so as an expert.
Prior to the CFMEU decision, a prosecuting regulator and a respondent could, in civil penalty proceedings, submit to the court an agreed statement of facts including a joint submission on the appropriate level of penalty. In such cases, the Federal Court did not ask whether it would have arrived at the same figure without the parties’ submission but rather whether the parties’ proposal could be accepted as one within the permissible range of penalties considering all of the circumstances of the case.1
If the agreed penalty was appropriate (i.e. within the permissible range of penalties available to be ordered by the court under the relevant legislation), the practice of the Federal Court was to base its determination on and endorse that figure.
This practice of agreed penalties had been justified on the following grounds:
In our view, these reasons from the judiciary at that time are not surprising given that many were former trade practices counsel who understood the cost efficiency and benefits of certainty arising from agreed penalties.
The Federal Court’s agreed penalty practice has not been without critics – even within its own ranks. In 2001, Justice Finkelstein identified “very real problems” of the settlement practice and warned that “a hasty disposal of a case, though it does free up the court’s time, may sometimes be at the expense of justice”.2
A decade ago, Justice Weinberg, as a member of the Federal Court, found “dangers associated with this approach” as the court may be seen to act as a “rubber stamp” when simply approving a decision taken at an executive level of the regulator who is prosecuting the case.3 His Honour took the view that the agreed penalty approach is “misconceived and contrary to principle”.4
More recently, Justice Weinberg, as a member of the Supreme Court of Victoria (and with whom the other judges agreed), considered that courts must independently exercise their discretion when imposing civil penalties.5 His Honour however endorsed the practice of submitting an appropriate range of penalties (either by joint submission or individually), rather than a single figure penalty.
In Barbaro v The Queen (2014) 305 ALR 323, the majority of the High Court held that the practice in Victoria of criminal prosecutors making submissions to a sentencing judge as to the available range of sentences should cease on the basis that it was wrong in principle. The majority reasoned that it was for the judge alone to determine the sentence and that the prosecutor’s role was to submit the relevant facts and the legal principles that applied to these facts. That is, a prosecutor’s submissions must address evidence and the law and any suggestion as to the appropriate length of a sentence was an ‘opinion’ and could not properly be advanced in submissions.
The High Court was concerned that a statement by the prosecution as to an appropriate sentence or range of sentences may:
In CFMEU, the Federal Court considered that7
1 NW Frozen Foods Pty Ltd v ACCC  FCA 1134 at 290/291.
2 ACCC v ABB Transmission and Distribution Ltd  FCA 383 at 5.
3 ACCC v Colgate-Palmolive Pty Ltd  FCA 619 at 34.
4 Australian Prudential Regulation Authority v Derstepanian  FCA 1121 at 25.
5 ASIC v Ingleby  VSCA 49 at 20, 22.
6 at 31-33.
7 at 53, 62, 139.