The consequences of engaging in prohibited conduct
Engaging in any of the forms of conduct outlined in this module can have very serious consequences for your employer and for you personally.
Civil pecuniary penalties
A person who is found to have breached certain provisions of the ACL, such as the prohibition against false or misleading representations, may be liable to pay a civil pecuniary penalty of up to $1.1 million for companies and $220 000 for individuals.
A civil penalty is a financial penalty and is designed to deter the person and others from breaching the law. A penalty may only be imposed by the court once it has found that the person has breached the ACL at the civil standard of proof. This means that the person must be proved to have breached the ACL on the balance of probabilities that is that the conduct was more likely to have occurred than not.
Section 18 of the ACL which deals with misleading or deceptive conduct is not the subject of civil pecuniary penalties.
The ACL also prohibits numerous business practices that are false or misleading, and gives rise to both criminal and civil liabilities.
Criminal law is the body of law that deals with crime and the legal punishment of criminal offences. The legislation, such as the CCA, specifies what a criminal or civil contravention is. If the ACCC refers a criminal matter to the Commonwealth Director of Public Prosecutions (CDPP), the CDPP may take legal action against a firm that is suspected to have contravened a criminal prohibition.
The CDPP must prove that the law was contravened beyond a reasonable doubt. This is a higher standard of proof than the standard of proof for civil contraventions. In most cases, the penalty is also a fine of up to $1.1 million (for companies) and $220 000 (for individuals).
Section 18 (misleading or deceptive conduct) is also not the subject of criminal sanctions.
Other civil remedies
Other civil remedies include:
- an injunction (a court order) requiring the business to stop the conduct that is breaching the law
- an award of damages (compensation) provided to those suffering loss or damage as a result of the contravening conduct
- orders requiring the liable business to establish a compliance or training program for staff to reduce the risk of further contraventions, publish corrective advertising or disclose specified information
- disqualification orders made by a court prohibiting a person from managing a business for a specified period
- infringement notices (penalty notice) if the ACCC has reasonable grounds to believe that a business has made a false or misleading representation (other than misleading or deceptive conduct under section 18), it may issue an infringement notice, which in effect is a fine.
The infringement notice must explain the area of law that the business is alleged to have breached and state the penalty amount that the business must pay. If the business does not pay the specified penalty amount, court proceedings can then be taken against it.