A. The Regulatory Cycle and its Role in Shaping Purposes and Principles of Sentencing for Regulatory Offences
There is presently, as has been noted, no identified set of sentencing purposes and principles for regulatory offences. As a result, it is up to each court, in each case, to assess the circumstances of the offence, and the offender, and to impose a sentence that best reflects the mélange of principles of traditional sentencing theory, including denunciation, deterrence, protection of the public, rehabilitation, reparations, and promoting a sense of responsibility in offenders along with an acknowledgment of the harm done to victims and the community, all in juxtaposition to public welfare or regulatory offences. But such offences correspond to an incredibly diverse and complex series of activities, ranging from protection of the environment, workplace safety and motor vehicle infractions. These are but a few examples. Public welfare laws, as has been noted, “pervade the lives of ordinary people.”
In a recent article on sentencing for regulatory offences, Verhulst comments that unlike sentencing in the criminal process where the imposition of punishment concludes a morally blameworthy offender’s dealings with the state, sentencing in the context of regulatory offences, which are for the protection of the public from conduct which is not intrinsically evil, is better viewed as part of a cycle, and not the culmination of a process. That is, sentencing is merely one part, albeit a most important part, in the regulatory offences paradigm. The beginning of the regulatory cycle involves the identification of regulatory objectives; provisions are subsequently devised, and implemented, to give effect to these objectives, including the creation of regulatory offences. Enforcement strategies may thus include prosecution, in which case the offender, upon being convicted and sentenced, is often permitted to return to participate in the regulated activity, thereby continuing to be involved in the regulatory cycle, even after the imposition of punishment by the court.
If criminal offences and regulatory infractions reflect different societal interests and purposes, it follows, as Verhulst suggests, that punishment principles should also mirror these differences. That is, the rationale for punishment imposed by the court for a criminal offence and that for a breach of a regulatory provision should find expression in the sanction or disposition of the court. As Gunningham observes, sanctions ought to be “sensitive to the nature of the behaviour to be controlled.” It is here that the regulatory cycle takes on particular importance: unlike criminal conduct where the party’s actions will cease and the court’s punishment will conclude the defendant’s interactions with the state, the regulated actor will usually be permitted to continue participating in the regulatory endeavour, even after punishment has been imposed, unless even more severe enforcement actions are necessary, such as a licence suspension or revocation, that is, the final stages of the regulatory enforcement pyramid. Regulatory theory, particularly as it relates to those who come into contact with the enforcement mechanism of prosecution, therefore has the potential to play an important role in the shaping of sentencing purposes and principles for regulatory offences. Stated shortly, regulatory theory can and should influence sentencing practices since regulation and sentencing alike are part of the same cycle; placing the offender within the regulatory context on sentencing allows the court to understand the underlying regulatory objectives.
Scholars like Gunningham, Braithwaite, Breyer, and Archibald et al make important contributions to regulatory theory literature in this area through their work on the model of the enforcement pyramid as it relates to regulatory offences. However, these studies tend to focus on the perspective of regulators, and their efforts to encourage regulatory compliance through enforcement strategies, but less so towards the attitudes of the regulated parties themselves, and the extent to which such factors should inform the disposition of the sentencing court in its choice of the appropriate sanction. The conduct of those being regulated, and an understanding of their motivations and responses to initiatives designed to induce compliance, is an important consideration for sentencing courts. “Attitudes” may be judged along with “activities”. Thus, it is necessary to distinguish between regulations and regulators, and those who are the intended beneficiaries of such “social policy objectives,” including both the regulated parties and the public at large. After all, as Glasbeek puts it, regulatees do “play a large role in the regulation of their activities”, for they, and not regulators, are the “best judges of their self-interest, they are the ones with the requisite skills and abilities to measure the costs and the benefits of their activities.”
The focus of this section, then, will be to explore and critically analyze the concept of the regulatory cycle, and examine how it has the potential to play an important role in shaping regulatory offences sentencing purposes and principles. A proper understanding of the regulatory cycle is essential for courts when imposing punishment for regulatory offences, so as to better promote regulatory sentencing objectives and outcomes. The identification of sentencing purposes and principles for regulatory offences bolsters, in turn, the ability of courts to select the sanction that best encourages the regulated actor’s successful reintegration within the regulatory cycle.
In terms of this section’s organization, there is first an overview of the concepts of risk assessment and risk management, which are central to the notion of the regulatory cycle. Whereas the risk assessment process leads to the choice of regulatory strategy, the risk management process leads to the choice of enforcement strategy. This is followed by a discussion of regulatory enforcement pyramids which include, as one option, prosecution of regulated parties who fail to meet the regulatory standard. The focus then moves to the two central topics which apply these key concepts: (i) “penalties principles”, and (ii) changing regulatory strategies. Penalties principles apply to both the particular choice of sanction within the enforcement pyramid, and to the choice of sanction by the courts; an appreciation of changing regulatory strategies allows the court, when crafting its sentence, to better understand the offender’s past and current behaviour. In the conclusion, observations are made for future consideration as to the utility of the regulatory cycle, and its potential for playing a role in the debate concerning the identification and enactment of sentencing purposes and principles for regulatory offences.
2. Risk Assessment and Risk Management
The regulatory cycle has its roots in risk assessment and risk management theory, concepts which were touched on briefly in Part I. Sentencing for the commission of a regulatory offence has been described as “risk management on its head”, that is, it represents a response to the failure of preventing a violation of a regulatory standard that embodies risk assessment. Risk assessment is a “scientific assessment of the true risk” whereas risk management “incorporates non-scientific factors to reach a policy decision.” The scientific assessment of risk may be converted into laws or regulations; the extent of legal enforcement and allocation of resources for enforcement involves risk management. However, it is at the sentencing stage that courts have the opportunity to address the regulatory standards which have been set by the legislature. That is, it is only where a regulated party has been found to have breached the regulatory standard that the court has the opportunity of quantifying this shortcoming, as reflected by the penalty it imposes.
In short, the risk assessment process informs the choice of regulatory strategy. That is, it forms the basis of regulation, and the choice of what conduct will be required or prohibited. It is important for courts to be mindful of these regulatory objectives, so that consideration can be given to the type of sentences which will be both appropriate and assist in achieving those objectives. The risk management process, in turn, leads to the choice of enforcement strategy. It impacts on the enforcement pyramid, and the choice of sanction sought by the regulator on contravention of the regulatory standard. An appreciation of this assists the court, on sentencing, in understanding the past and current behaviour of the offender. Specifically, it draws attention to any problems in the regulatory strategy that may have adversely affected compliance; it also reveals the nature of the relationship between the regulated party and the regulator, including enforcement practices. These factors are relevant to the court, and assist it in crafting a sentence that is responsive to the needs of the offender, particularly in moving the regulated party back to achieving compliance. It is important, then, to examine the concepts of risk assessment and risk management at the outset, as they comprise the foundation of the regulatory cycle.
Risk assessment is described by Salter and Slaco as a “problem-oriented concept” whose use is said to imply that “developments should be allowed to proceed, and products used, unless serious problems have been identified.” The authors go on to point out that, whereas the model for risk assessment is largely taken from epidemiology, where comparisons of rates of fatality or disease are based on statistical information, there are no “standard yardsticks” for the measurement of risk in forums such as inquiries. Although inquiries are not the same as courts, the former is an instrument of the legal process which can take “evidence”, and under specific conditions, such testimony can be used in a court. Science and scientists, however, are routinely used in the “making of public policy” or “mandated science” as Salter calls it.  Indeed, science in government is “tied closely to regulating and managing risks.” Risk assessment may be viewed, then, as “a procedure for bringing together a scientific and a value-based assessment.” That is, the scientific assessment of risk is “converted” into regulations or laws which are enacted or codified by legislators.
Yet, as Breyer notes, it is not all risk that is the subject of regulation, but only that which regulators identify in order to “make our lives safer by eliminating or reducing our exposure to certain potentially risky substances or even persons.” Measures designed to eliminate or reduce risk can be “enormously costly.”  Whenever individuals engage in an activity, “there is a risk and eliminating that risk carries a cost.” Risk assessment may be considered, though, as an “essential means of directing regulatory resources where they can have the maximum impact on outcomes.” There must therefore be not only a “real scientific basis” for the regulations or law that result from risk assessment, but a value judgment as to the desirability of expending resources to achieve this regulatory result.
Risk assessment is the “technical part” of the regulatory system. It is designed to measure the risk associated with the substance. Risk assessment may be divided into four discrete activities: (i) hazard identification (ii) dose-response assessment (iii) exposure assessment (iv) risk characterization. Risk management, on the other hand, is “more policy-oriented”, and involves determining “what to do about it.” That is, risk management is the means by which the regulator decides what do about the “risks that the assessment reveals.” This process entails weighing policy options in view of the results of risk assessment, and “selecting appropriate control options including regulatory measures.”
An integrated framework for risk assessment and risk management consists of six stages: (i) defining the problem and putting it in context (ii) analyzing the risks associated with the problem in context (iii) examining options for addressing the risks (iv) making decisions about which options to implement (v) taking actions to implement the decisions (vi) conducting an evaluation of the action’s results. Predicting risk is a “scientifically related enterprise.” Certainty and objectivity are key component