CAMAC report--Personal Liability for Corporate Fault.(Corporations and Markets Advisory Committee, corporate law)

* CAMAC's views on the reform of liability legislation imposed on directors and other company officers

* The committee's preferred model for national adoption and its views on the business judgement defence and designated officers

As most people involved in the business community already know, there is a vast body of Commonwealth, State and Territory laws, which imposes liability on company officers for failing to ensure that the corporate vehicles which they manage comply with those laws. Those laws continue to proliferate as governments seek to impose more and more stringent responsibilities and liabilities on directors and other officers.

Apart from the significant numbers of these laws (which are generally not well known or understood) there are a number of other concerns which commentators have been concerned about, including:

* there is little uniformity across these provisions so even within a single jurisdiction, provisions imposing personal liability on directors and officers are expressed in a multitude of different ways and defences which are available differ from Act to Act. In the case of a company carrying on business nationally or across a number of jurisdictions, the problem increases many-fold

* while these provisions impose personal criminal liability on company officers, many of them reverse the onus of proof so that if a corporate breach occurs, officers are deemed automatically to have committed an offence unless they can satisfy the onus of establishing the availability of a defence. It seems unfair that directors and officers should not be able to avail themselves of the same presumption of innocence available to anyone else in this country who is charged with a criminal offence, and

* the legislation often seems to be based on the assumption that all companies are small family-type concerns where the directors are the hands-on managers who are responsible for the day-to-day conduct of the company's business and should therefore be held to account for every corporate breach. This ignores the reality of many of our medium and larger corporations where the board and senior management are far removed from the decision-making process which leads to …