A Bill which standardises and reduces the number of provisions which impose personal criminal liability on officers for offences committed by corporations across the Western Australian statute book has been introduced into Parliament.
Under the proposed reforms, a company officer – which includes directors, secretaries, and other officers – will be held personally liable for certain specified offences committed by a body corporate if the officer failed to take all reasonable steps to prevent the body corporate committing the offence.
Currently in WA, more than 60 pieces of legislation contain provisions that make officers liable for offences committed by bodies corporate. The Bill removes derivative liability completely from 21 Acts.
The Bill aims to ensure that officers’ liability for corporate offending is clear and easily understood, and makes officers liable where the underlying offence is serious enough to warrant it, rather than a blanket approach.
The reforms will bring WA a step closer to achieving a nationally consistent approach to the imposition of personal criminal liability on directors and other corporate officers, by ensuring WA laws hold officers to account in appropriate circumstances.
The Bill steers a steady path through the statute book – substantially reducing the number of derivative liability provisions, and further confining those provisions which reverse the onus of proof – while leaving in place a sufficient layer of regulation to ensure that officers of bodies corporate take all reasonable steps to protect the public from corporate offending.
The Bill does not affect the criminal liability of officers who have committed offences themselves, nor does it impose any new obligations on or create new offences in relation to officers.
Directors’ liability reform was one of 27 deregulation priorities under the National Partnership Agreement to Deliver a Seamless National Economy, a now-concluded project which was overseen by the Council of Australian Governments’ Reform Council.
As stated by Attorney General John Quigley:
“This Bill represents a microeconomic reform that will achieve consistency across Western Australian legislation regarding the criminal liability of officers for offences committed by bodies corporate.
“We need clear and reasonable laws that create strong incentives for officers to act honestly and diligently.
“These laws need to be crafted in a way so as to ensure suitable people are willing to serve as officers and take appropriate business risks.
“The Bill strikes a balance between the need to reduce the regulatory burden on officers, and maintaining corporate compliance with legislation and the need to hold officers responsible when corporations fail to comply with the law.
“Importantly, it will bring Western Australia into line with other Australian jurisdictions.”
