What is the difference between aiding and abetting?

REGULATORY PROCEEDINGS

What is the difference between aiding and abetting?

Party liability in criminal and regulatory proceedings

In any criminal case a defendant can either be charged as a principal or as a party to the offence. The principal is the person who actually commits the offence – for example in a bank robbery the principal would be the person who points a gun at the teller and demands money. A party is someone who helps the principal – so in a bank robbery, a party would be someone who stood as a lookout or was waiting outside the bank in a getaway car.

Similarly, in regulatory proceeding, such as civil pecuniary penalty proceedings under the Financial Markets Conduct Act, there can be a person or persons who actually committed the contravention (such as market manipulation or insider trading) and a person or persons who were involved in a contravention.

In the Crimes Act 1961, party liability is addressed under s 66:

66 Parties to offences

(1) Every one is a party to and guilty of an offence who—

(a) actually commits the offence; or

(b) does or omits an act for the purpose of aiding any person to commit the offence; or

(d) incites, counsels, or procures any person to commit the offence.

(2) Where 2 or more persons form a common intention to prosecute any unlawful purpose, and to assist each other therein, each of them is a party to every offence committed by any one of them in the prosecution of the common purpose if the commission of that offence was known to be a probable consequence of the prosecution of the common purpose.

In the regulatory context, party liability are set out in provisions such as s83 of the Commerce Act, s 43 of the Fair Trading Act, and s 533 of the FMCA:

533 Involvement in contraventions

(1) In this Act, a person is involved in a contravention if the person—

(a) has aided, abetted, counselled, or procured the contravention; or

(b) has induced, whether by threats or promises or otherwise, the contravention; or

(d) has conspired with others to effect the contravention.

(2) Subsection (1) does not apply to proceedings for offences (but see Part 4 of the Crimes Act 1961, which relates to parties to the commission of offences).

Compare: Corporations Act 2001 $ 79 (Aust)

The approach taken to the application of these regulatory provisions is the same as that taken in respect of party liability in the criminal law: a party will be liable only if he or she intentionally participates in the contravention, which means that the person must have knowledge of the essential matters which go to make up the contravention.1

Note that s 533(1)(a) uses the same aiding and abetting language that is found in s 66. The essence of aiding and abetting is intentional help.2

So what is the difference between aiding and abetting?

Aiding

“Aiding”, as the names suggests, is helping.

First, to convict a defendant as a party to an offence under s 66(1)(b), the Crown must prove an act by that person that aids another to commit the offence.3 So proof of causation is required: the person alleged to be a party must have assisted the principal offender in the commission of the crime, by words or conduct or both.4

Second, such action must be deliberately taken, with the intention that the conduct will aid the principal offenders in their criminal actions.5 So the Crown must prove that the defendant intended to assist the principal offenders to commit the offence.

Third, the party must know both the physical and mental aspects of the principal’s conduct, that is, the actions planned to be taken and the intention with which they are to be done.6

Abetting

To abet means to urge on, instigate, or encourage. For criminal liability, any abetting must occur while the principal offender is committing the offence.7

A defendant cannot be held guilty as an abettor unless an actual intent to encourage is proved.8

While the Crown need not prove a causal connection between the act of encouragement and the commission of the offence, some connection between the abettor and the principal offender is required.9

The encouragement relied upon by the Crown must be communicated to the principal offender.10

At a bare minimum, the principal offender must be aware of the presence of the person said to be an abettor.11 But mere presence at the scene, or mere intention to encourage, is insufficient for party liability.12

In general, an inference of intention to encourage is more likely to be available in cases where presence is according to prior agreement with the principal party or is accompanied by some positive act or implicative circumstance.13

Implications

The first key implication of the foregoing is that to prove party liability for a strict liability regulatory offence or in a civil pecuniary penalty proceeding, the regulator has to prove a full mens rea breach by the alleged party – essentially the regulator has to prove a breach as if it were a criminal offence.

By way of example, under the FMCA it suffices to prove against principals that they ought reasonably to have known that:

(a) their trading was likely to have the prohibited effect (for market manipulation); or

(b) the information they possessed was material information not generally available to the market (for insider trading).14

So that imports an objective test and does not require proof of actual knowledge – that is reserved for the criminal offences.15

However, to prove party liability for market manipulation or insider trading, the prosecution must prove for each trading instance an act of intentional assistance or participation.

For market manipulation this would including proving actual knowledge of the trading or intended trading of one of the principal defendants; and that such trading was at least likely to have one of the prohibited effects ( ie creating a false or misleading appearance with respect to the extent of active trading in quoted financial products or with respect to the supply of, demand for, price for trading in, or value of financial products).

For insider trading, this would including proving actual knowledge that the information the principal possessed was material information that was not generally available to the market and actual knowledge of the trading,16 disclosing,17 or advising18 that was intended by the principal.

Second, even if there is evidence that the secondary party was aware of what was going on and knew some of the key ingredients listed above, the regulator or the Crown still have to prove an act of actual assistance or encouragement – knowledge on its own is not enough.

For example, in a recent case, I acted for a defendant charged with attempted murder. It was alleged by the Crown that, as he was near the scene at the time of the offence, he must have been there to act as a lookout or help out if something went wrong for the assailants. The Crown said in opening that my client was there “to encourage, even if only by [his] presence, and perhaps also to be a backup person in the event that further assistance was needed”. At the end of the Crown case, after more than 4 weeks of evidence, I was successful in arguing that the Crown had not proved any act of assistance or encouragement and the charge against my client was dismissed under s 147 of the Crimes Act.19 While the High Court found that there was sufficient evidence to go to the jury that my client knew the principal offenders were going to attack the victim with the intention to kill him,20 the Court found that his alleged assistance was “completely ineffectual” and concluded: 21

It might have had some effect only if events had turned out differently, but in my view, there is no basis for a finding of actual assistance. Nor is there any evidence of actual encouragement.

Rechtwise Liberty barristers have extensive expertise in regulatory and criminal proceedings, including those under the FMCA. If you have a regulatory or criminal related issue, please get in touch with us.

← News & insights