Clifford Chance

Negotiated settlements with regulators: the courts have the final word

11 June 2013

The Australian courts have sent a reminder to parties reaching agreement with a regulator on a recommended penalty that there can be no guarantee that the penalty will ultimately be upheld by the court.

In the recent decision of ASIC v Ingleby [2013] VSCA 49, which involved a claim that the former CFO of the Australian Wheat Board (AWB) failed to act with due care and diligence during a period when the AWB was supplying wheat to Iraq in contravention of UN sanctions, the Victorian Court of Appeal made it clear that the court's role is not merely to "rubber stamp" agreed settlements. 

Sentencing an offender – including the imposition of a pecuniary penalty is an exercise of judicial power and not a matter for the parties to agree between themselves.

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