Can a fine be offset by an award of legal costs?

For normal criminal proceedings, it is unusual for the prosecution to seek legal costs against an accused, and even rarer for such applications to be granted. The same is not true for regulatory crime prosecutions. Prosecutors are frequently successful in applying for their legal costs, even following pleas of guilty – at least where the accused is a corporate entity.

A corporate accused can then face two separate financial orders following a plea hearing: one, being a fine; the other, a costs award. This approach is often adopted by regulators because, in the absence of specific provision otherwise, all financial penalties are paid to consolidated revenue,¹ and do not contribute to the investigating/prosecuting agency’s budget. An order for legal costs, on the other hand, is good for the agency’s bottom line.

Strictly, a magistrate or judge’s sentence and any award they make of costs are distinct orders. One does not offset the other.

However, a sentencing magistrate or judge is entitled to take into account some other orders imposed in determining the amount of a financial penalty that is just in all the circumstances. This is despite there being no specific provision to the effect.² This is because a magistrate or judge is required to determine the appropriate amount of a ‘fine’. And ‘fine’, as defined at s 3(1) of the Sentencing Act 1991 (Vic) includes an order for costs as between the parties to the immediate criminal proceeding.

This is consistent with a number of superior courts taking into account legal costs awarded in the fine amount for regulatory penalties: e.g. EPA v Barnes [2006] NSWCCA 246, [88] (Kirby J, Mason P & Hoeben JJ agreeing); Director of Consumers Affairs Victoria v Meng [2015] VSC 668, [62] (McDonald J); Re Zita (a solicitor) [2022] VSC 354, [83] (John Dixon J). Albeit, none of these authorities applied the Sentencing Act 1991 (Vic).

This does not mean a magistrate or judge should engage in two-stage sentencing, whereby they come up with a proper fine amount and then deduct the costs order from that amount. To preserve the instinctive synthesis, such a mathematical approach is discouraged.

Any amount awarded in costs is not counted in the maximum fine jurisdictionally available to the court (meaning that theoretically the maximum available fine could be imposed plus an award of legal costs).³

1. Sentencing Act 1991 (Vic), s 69ZB. For an example of a specific exception, see Workplace Injury Rehabilitation and Compensation Act 2013 (Vic), s 513(3)(a). ↩︎
2. Cf s 53, which specifically incorporates considerations of any compensation, restitution or forfeiture order made. ↩︎
3. Sentencing Act 1991 (Vic), s 50(3). ↩︎