This is a single section from Chapter 26. Read the full chapter here.

Should the conduct be subject to a pecuniary penalty?

Pecuniary penalties are not appropriate to address truly criminal conduct.

Pecuniary penalties may be an appropriate alternative to criminal offences when a monetary penalty would deter breaches of a regulatory regime and the nature of the offending conduct does not warrant the denunciatory and stigmatising effects of a criminal conviction or imprisonment. To date, pecuniary penalties have usually been imposed as part of regulatory regimes targeting commercial behaviour in a particular industry. They may be an alternative to a strict liability criminal offence in cases where civil enforcement is more appropriate than criminal enforcement.

Pecuniary penalties are not appropriate for the type of conduct sometimes described as “truly criminal”, such as violence, emotional harm, or significant harm to property, the economy, the environment, or the administration of law and justice. Officials should consider whether the contravention should include an element of fault or moral blameworthiness. To date, most pecuniary penalty provisions do not contain a mens rea element.[1] If fault or moral blameworthiness is an element of the conduct, it may be more appropriate for the contravention to be addressed by a criminal offence, rather than in civil proceedings.[2]

Pecuniary penalties may also be inappropriate if there is an imbalance of power between the enforcement agency and defendants, which would require the procedural protections of the criminal law.

There must be an adequately resourced enforcement body or agent to implement pecuniary penalties. Usually, this is a statutory body with investigatory and prosecutorial responsibility for the particular regime, but a department or ministry (or its chief executive) may also be appropriate.

Finally, pecuniary penalties are enforced as civil debts. The same tools for enforcement of criminal fines (such as the seizure of property and compulsory deductions from income or bank accounts) are available for pecuniary penalties, but enforcement must be initiated by the enforcement body. Officials should think about the practicalities of enforcing civil debts as part of determining whether pecuniary penalties are the appropriate enforcement mechanism.


[1] An exception is section 33M(c) of the Takeovers Act 1993, which includes a requirement that “the person knew or ought to have known of the conduct that constituted the contravention”.

[2] The Law Commission discussed the inclusion of mens rea in pecuniary penalty provisions. See Law Commission Pecuniary Penalties: Guidance for Legislative Design (2014) NZLC R133, Chapter 11.

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