What is a Regulatory Offence?
A regulatory offence is a violation of a law that is not listed in the Criminal Code of Canada or its related statutes (including the Controlled Drugs and Substances Act) and can be a law enacted either by Parliament or by the legislature of a province.
Regulatory offences can have different standards when it comes to knowledge and intention, especially when it comes to corporate accused. Strict liability is the norm when it comes to regulatory offences.
The rationale is that while it can be a challenge to determine what one human being intended by evaluating their conduct on a particular occasion, it is quite another to determine what a chain of people intended and who was told what by whom. This additional complication seems to justify a standard of strict liability.
Examples of Regulatory Offences
Occupational Health & Safety (OHS)
In every Canadian jurisdiction, employers are subject to comprehensive occupational health and safety (OHS) and workers’ compensation legislation.
In Ontario, the government enacted the most dramatic changes to the Ontario Occupational Health & Safety Act (OHSA) on December 14, 2017 by Bill 177. While only a small number of provisions were modified, the key updates are poised to have significant implications for businesses, their management and leaders, and even workers.
In Ontario, maximum fines for individuals is set at $100,000.00 and maximum fines for corporations is set at $1,500,000.00. Employers are strongly advised to proactively manage workplace risks. OHS training and consulting service providers can assist employers in developing workplace safety programs that meet and exceed compliance. An experienced legal team can offer strategic insight and solutions, coupled with extensive OHS litigation experience.
Armoured Suits counsels employers, senior executives, supervisors, team leaders and health and safety committee members on a wide range of OHS-related matters, including compliance, due-diligence, reporting, orders, directions, defence and appeals.
Competition Act – Canada
The federal Competition Act is enacted to protect the economy and prevent unfair practices that strangle business competitors from being on a level playing field.
Part VI of the Act sets out numerous offences in relation to price fixing, limiting supply of products and so on.
The penalties for violations are steep: up to 14 years in jail and $25 million fine or both!
Liquor Licence Act – Ontario
Those who sell alcohol in Ontario are required to comply with the Liquor Licence Act and failure to do so in an offence.
Section 61 of Ontario’s Liquor Licence Act says failure to follow the Act is an offence. It also explicitly warns directors and officers of corporations that their involvement might also be an offence if they “caused, authorized, permitted, or participated in an offence.”
The penalties can be crushing to a business or its owner. Fines upwards of $250,000 for a corporation and $100,000 for an individual is the norm. For certain other misdeeds (selling to a minor) double those fines.
How to defend Regulatory Offences
Defending regulatory offences will typically differ from traditional defences under criminal law frameworks because the fault element is often relaxed.
When the requisite standard is strict liability, the law affords a defence of due diligence. What comprises due diligence in any case will depend on all the circumstances but usually will require a demonstration that the entity charged took all reasonable steps to prevent what happened from happening.
The defence strategy will often involve arguing about the meaning of certain words and whether the fault element is mens rea (knowledge), negligence, or strict liability.
A standard of mens rea is the hardest for the prosecution to establish and so is favoured by the defence.