Enforcement Response Options

The Commission has identified a number of enforcement responses as options for resolving investigations into, and prosecutions of, suspected contraventions of the Credit Contracts and Consumer Finance Act, the Commerce Act, Dairy Industry Restructuring Act, Electricity Industry Reform Act and Fair Trading Act.

In determining the preferred responses, the Commission considers the individual circumstances against its enforcement criteria.

Investigations	– on the basis of the evidence gathered over the course of an investigation, each response is taken when:
No further enforcement action required	There is no contravention or possible or likely contravention of the relevant action required legislation. This option may include situations where the information received is incorrect, a business goes on to apply for an adjudication in respect of its activities, the behaviour is outside the jurisdiction of the Commission, or it is more appropriate for another agency or affected party to consider the matter.
Compliance advice letter	There is a possible or likely, but not serious, contravention of the relevant legislation. The aim of this option is to inform the person or business in question and deter future illegal behaviour.
Warning letter	In the Commission’s view, the behaviour is at risk of contravening the relevant legislation. The aim of this option is to inform, stop the behaviour in question, and deter the business from repeat or new illegal behaviour.
Settlement	There is a likely and serious contravention of the relevant legislation, which the business acknowledges. The aim of this option is to modify the behaviour of the business in question, inform others and, where appropriate, seek redress for affected parties through the terms and conditions of the settlement. Settlements are entered into in circumstances where the Commission holds the view that the benefits obtained through the terms of the settlement provide a more appropriate outcome.
Decision to prosecute	There is a likely and serious contravention of the relevant legislation. The aim of this option is to modify or stop the behaviour of and penalise the business in question, inform and modify the behaviour of others and, where appropriate, seek redress for affected parties. The Commission may take criminal or civil action against the business in question. Civil action is taken in relation to: anti-competitive practices and prohibited business acquisitions and other ownership arrangements under the Commerce and EIR Acts; re-opening of oppressive contracts, injunctions and banning orders under the CCCF; declaratory orders and other relief for a variety of unfair trading practices under the Fair Trading Act; and contraventions of the conditions for the entry and exit of potential and existing farmer shareholders or any regulations made pursuant to the DIR Act. Civil action may include the Commission seeking interim injunctions during the course of an investigation to prevent or stop unlawful activity. The Commission may seek permanent injunctions (or under the Commerce Act only, cease and desist orders) at the conclusion of an investigation. Criminal action is taken in relation to offences under the CCCF and Fair Trading Acts.

Prosecutions	– on the basis of the circumstances and progress of a prosecution, each response is appropriate when:
Withdrawal/discontinuance	It is no longer appropriate or necessary to continue, such as where a business goes into liquidation or where the Commission considers it has insufficient evidence to continue. Withdrawal or discontinuance can also occur when a party wishes to withdraw an appeal or judicial review proceeding against a Commission decision.
Settlement	There is mutual agreement between the parties, any stage after a Commission decision to prosecute or to defend an appeal, where the Commission holds the view that the benefits obtained through the terms of the settlement provide a more appropriate outcome.
Concluded	A final judgment on liability, including a business admitting liability, is obtained from, or a proceeding is dismissed by, the court. Final judgment is achieved after all appeals are exhausted.

Prosecutions

– on the basis of the circumstances and progress of a prosecution, each response is appropriate when:

Withdrawal/discontinuance

It is no longer appropriate or necessary to continue, such as where a business goes into liquidation or where the Commission considers it has insufficient evidence to continue.

Withdrawal or discontinuance can also occur when a party wishes to withdraw an appeal or judicial review proceeding against a Commission decision.

Settlement

There is mutual agreement between the parties, any stage after a Commission decision to prosecute or to defend an appeal, where the Commission holds the view that the benefits obtained through the terms of the settlement provide a more appropriate outcome.

Concluded

A final judgment on liability, including a business admitting liability, is obtained from, or a proceeding is dismissed by, the court. Final judgment is achieved after all appeals are exhausted.

Other sources of information

Enforcement criteria