Penalties and remedies
Engaging in any of the forms of conduct outlined in this module can have very serious consequences for a business and for individuals found to be involved in the conduct.
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 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 (namely the balance of probabilities).
The ACL also prohibits numerous business practices that are false or misleading which can give 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, 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.
The maximum criminal and civil penalties (fines) for making false or misleading representations are $1.1 million for businesses and $220 000 for individuals.
Other civil remedies include:
- An injunction (a court order) ordering the business to stop the conduct that is breaking the law.
- An award of damages (compensation) provided to those suffering loss or damage as a result of the contravening conduct.
- ordering 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 order made by a court prohibiting a person from managing corporations for a specified period.
- An infringement notice (penalty) may be issued by the ACCC if it has reasonable grounds to believe that a business has contravened certain provisions of the ACL.
Infringement notices 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. Similar to court enforceable undertakings, the ACCC will generally only consider issuing an infringement notice where it is likely to seek a court-based resolution should the recipient of the notice choose not to pay. It is important to note that before issuing an infringement notice the ACCC will have turned its mind to the prospect of non-compliance and be prepared to proceed to court as a likely alternative.