A key incentive provided by Australian law enforcement authorities for the reporting of corporate cartel conduct is the prospect of immunity. Often referred to as ‘first in’ immunity, it is only available to the first person or entity to disclose the conduct.
Parties not eligible for ‘first-in’ immunity are still encouraged to cooperate with the Australian Competition and Consumer Commission (ACCC) in its cartel conduct investigations and may benefit from more lenient treatment under its Cooperation Policy, including more lenient treatment by the Courts. Cooperation can be provided by individuals or corporations, relating to civil or criminal cartel matters.
Cooperation in civil cartel matters
The ACCC will identify the extent of cooperation provided by a party to the Court. The cooperating party may be required to make admissions, agree to a statement of facts or provide evidence.
In exceptional circumstances, the ACCC may use its discretion to grant full immunity from ACCC-initiated civil proceedings to a cooperating party.
As outlined in Section H of the ACCC immunity and cooperation policy for cartel conduct, the following factors will be considered in assessing the extent and value of cooperation provided by a party who has engaged in cartel conduct:
- did the party approach the ACCC in a timely manner seeking to cooperate
- has the party provided significant, previously unknown evidence which has advanced the investigation
- has the party provided full, frank and truthful disclosure and cooperated fully and expeditiously
- has the party ceased or indicate they will cease involvement in the cartel
- has the party coerced others to participate in the cartel
- has the party acted in good faith in dealings with the ACCC, and
- (for individual cooperating parties only) has the party agreed not to use the same legal representation as the corporation by which they are or were employed?
Penalty assessment in line with cooperation
In determining whether to reach an agreement on civil penalties, banning orders or other remedies, the ACCC takes into consideration factors including:
- the extent and value of cooperation as per the above factors
- for corporate cooperating parties:
- whether the misconduct is attributed to senior management, or a lower level employee
- whether there is a corporate culture of compliance
- the size and power of the corporation
- the nature and extent of the party’s contravening conduct
- whether the conduct has ceased
- the amount of loss or damage caused
- the circumstances in which the conduct took place, and
- whether the contravention was deliberate and the period over which it extended.
Whilst the ACCC will communicate the cooperation to the Court, the penalties or other remedies imposed are ultimately determined by the Court.
Cooperation in criminal cartel matters
Similar to the above, any cooperation by the offender with the ACCC or other law enforcement agencies is generally identified to the court by the relevant agency. In addition to cooperating with the ACCC, the Commonwealth Director of Public Prosecutions (CDPP) may require the cooperating party to make admissions, agree to a statement of facts or provide evidence.
The Court will determine the extent of any discount for cooperation in line with Section 16A(2) of the Crimes Act 1914 (Cth), which sets out the matters that a court must take into account when sentencing a person for a Commonwealth offence. They include:
- whether or not a person has pleaded guilty to the offence
- the degree to which the person has cooperated with law enforcement agencies in the investigation
- whether or not a person has shown remorse for the offence
It should be noted that in both criminal and civil matters, compliance with statutory notices is a legal obligation and does not comprise cooperation for the purposes of the Cooperation Policy.
Being the first party to report corporate cartel conduct is required to obtain civil/criminal immunity, in addition to satisfying additional criteria. In cases where this is not possible, such as where another party has already reported the misconduct or where the immunity criteria cannot be satisfied, fully cooperating with the ACCC (and CDPP, where applicable) can still result in greater leniency by the Courts. In exceptional circumstances, a cooperating party without ‘first-in’ status may still be able to achieve full civil immunity.