Whether to protect or punish : legal consequences of contravening the Corporations Act

Two major developments in corporate law have once again brought to light the impact of the legal consequences of a Company Secretary, governance professional, director or other company officer contravening the Corporations Act 2001 (Cth) [CA]. These are the High Court of Australia decision in Rich v ASIC (2004)Ã"šÃ‚¹ on the meaning of civil penalties and the commencement of the Corporate Law Economic Law Reform Program (Audit Reform and Continuous Disclosure) Act 2004 (Cth) [CLERP 9].Ã"šÃ‚² Before delving into the complex issues that have arisen from these developments in Australian corporate law and their impact on the consequences of contraventions of the law, it is necessary to view corporate litigation as a process model. This means that, if there is an alleged contravention of the law, you can put three simple questions: 1. Who can bring the legal action? (who can sue) 2. What are the legal actions? (on what grounds) and 3. What are the remedies or sanctions being claimed? (the consequences). The primary purpose of this article is to answer the third question, as this has recently gone through some important major changes. But to help put this into context, the James Hardie asbestos claims, as discussed in the Jackson QC ReportÃ"šÃ‚³, provide a perfect example of the process model.