Therapeutic Goods Amendment (2022 Measures No 1) Bill 2022 [2023] AUSStaCSBSD 11 (8 February 2023)

• Therapeutic Goods Amendment (2022 Measures No. 1) Bill 2022
• Reversal of the evidential burden of proof95
• Strict liability101
• Procedural fairness105
• Incorporation of external material as existing from time to time107

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Therapeutic Goods Amendment (2022 Measures No. 1) Bill 2022

Purpose	This bill seeks to amend the Therapeutic Goods Act 1989 to: • enhance patient safety and improve the safe use of medical devices; • support innovation and investment in biologicals Australia through the introduction of a new marketing approval pathway for biologicals that are for export only; • support activities to relieve medicine shortages; • strengthen post-market monitoring and compliance; • reduce regulatory burden; • safeguard patient safety in relation to therapeutic goods advertising; and • make a number of more minor amendments.
Portfolio	Health and Aged Care
Introduced	House of Representatives on 1 December 2022

Reversal of the evidential burden of proof^[95]

1.168 Item 2 of Schedule 5 seeks to insert proposed section 45AC into the Therapeutic Goods Act 1989 (the Act) to create an offence for failing to comply with a notice from the Secretary requiring the production of information or documents. Proposed subsection 45AC(3) provides an exception for the offence if the person has a reasonable excuse, and a note to the subsection states that the defendant bears an evidential burden in relation to the matter.

1.169 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence.^[96] This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interferes with this common law right.

1.170 While in this instance the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified.

1.171 The committee notes that the Guide to Framing Commonwealth Offences provides that a matter should only be included in an offence-specific defence (as opposed to being specified as an element of the offence), where:

• it is peculiarly within the knowledge of the defendant; and

• it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.^[97]

1.172 Additionally, the committee notes that the Guide to Framing Commonwealth Offences states that:

An offence-specific defence of 'reasonable excuse' should not be applied to an offence, unless it is not possible to rely on the general defences in the Criminal Code or to design more specific defences.^[98]

1.173 The committee therefore expects the explanatory materials for a bill which includes the defence of 'reasonable excuse' to include a justification as to why the defence is appropriate and an explanation as to why it is not possible to include more specific defences within the bill.

1.174 The explanatory memorandum states that:

As well as being consistent with defences to similar existing offences...the inclusion of this defence is appropriate as the matters that might comprise a reasonable excuse would, in most cases, be peculiarly within the knowledge of the defendant and it would, therefore, not be possible for the prosecution to establish the absence of a reasonable excuse.^[99]

1.175 In this case, the committee notes that the explanatory memorandum does not justify why a defence of reasonable excuse is appropriate in this context. Consistency with similar offences is not, in itself, a persuasive justification for including reasonable excuse as a defence to a proposed new offence. It is also not clear to the committee from this explanation how it can be said that a reasonable excuse would be peculiarly within the knowledge of the defendant.

1.176 As the explanatory materials do not address this issue, the committee requests the minister's advice as to why it is proposed to use a defence of reasonable excuse (which reverses the evidential burden of proof) for proposed subsection 45AC(3). The committee's consideration of the appropriateness of a provision which reverses the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences.^[100]

Strict liability^[101]

1.177 Item 2 of Schedule 5 proposes to introduce subsections 45AC(2) and 45AD(2) which contain strict liability offences for failure to comply with a notice, and giving false or misleading information or documents, respectively. Both of these provisions are subject to a penalty of 100 penalty units.

1.178 Under general principles of the common law, fault is required to be proven before a person can be found guilty of a criminal offence. This ensures that criminal liability is imposed only on persons who are sufficiently aware of what they are doing and the consequences it may have. When a bill states that an offence is one of strict liability, this removes the requirement for the prosecution to prove the defendant's fault. In such cases, an offence will be made out if it can be proven that the defendant engaged in certain conduct, without the prosecution having to prove that the defendant had the intention to engage in the relevant conduct or was reckless or negligent while doing so.

1.179 The committee notes that the Guide to Framing Commonwealth Offences states that the application of strict liability is only considered appropriate where the offence is not punishable by imprisonment and only punishable by a fine of up to 60 penalty units for an individual or 300 penalty units for a body corporate.^[102] When a penalty is higher, the committee expects this to be thoroughly justified in the explanatory memorandum, including by outlining the exceptional circumstances that justify the penalty and whether the approach is consistent with the Guide to Framing Commonwealth Offences.

1.180 In relation to subsection 45AC(2), the explanatory memorandum states that:

...the strict liability offence...is necessary because of the significance of non-compliance even where fault is not established. The inclusion of the strict liability offence reflects the importance of the Secretary being able to gather accurate information regarding potential contraventions of the Act so appropriate regulatory action may be taken if necessary, to protect consumers from the supply, and advertising for supply, of therapeutic goods that are non-compliant with requisite regulatory obligations.
The 100-penalty unit maximum for the strict liability offence is consistent with existing strict liability offence provisions in the Act for failure to comply with a notice (see for example, subsection 41JB(3B) of the Act) and is justified because of the potential risk to public health arising from the use or supply of non-compliant therapeutic goods and the importance of the Secretary being able to gather accurate information regarding potential contraventions of the Act so appropriate regulatory action may be taken if necessary.^[103]

1.181 The explanatory memorandum provides a similar justification in relation to subsection 45AD(2).^[104]

1.182 While this penalty may align with other penalties in the Act, the committee notes that proposed Schedule 5 introduces much broader information gathering powers for the Secretary. Currently, the Act limits who the Secretary can require the production of information or documents from to specified persons, for example sponsors or manufacturers of therapeutic goods. These proposed amendments broaden this power to allow the Secretary to require information or documents from anyone that may be relevant to an alleged contravention of the Act, therefore extending the potential application of the strict liability offences. Further, the committee generally expects that penalties distinguish between individuals and corporations so it is appropriately specific. The penalties in subsections 45AC(2) and 45AD(2) are drafted broadly and do not distinguish between individuals and corporations. The committee also does not consider that consistency with existing provisions is a sufficient justification for the imposition of penalties that are above those recommended in the Guide to Framing Commonwealth Offences. Rather, each provision must be justified on its own merits.

1.183 The committee draws its scrutiny concerns to the attention of senators, and leaves to the Senate as a whole the appropriateness of imposing a strict liability offence under proposed subsection 45AD(2), noting that the penalties imposed under that offence are above what is recommended in the Guide to Framing Commonwealth Offences.

Procedural fairness^[105]

1.184 Item 1 of Schedule 10 to the bill seeks to insert subsection 61(13) into the Act. This provision would provide that the Secretary is not required to observe any requirements of the natural justice hearing rule in relation to releasing information under section 61 of the Act. Section 61 of the Act provides that the Secretary may release certain kinds of information to the public and to various health, regulatory and law enforcement authorities, including for example: notifications concerning therapeutic goods that have been prohibited or severely restricted in Australia; the licensing status of manufacturers of therapeutic goods; contents of reports, conditions on assessment certificates; reported problems and complaints concerning therapeutic goods; investigations of complaints; decisions on registration or listing; and cases or possible cases of product tampering or counterfeit therapeutic goods.

1.185 Procedural fairness is a fundamental common law right that ensures fair decision-making. Amongst other matters, it includes requiring that people who are adversely affected by a decision are given an adequate opportunity to put their case before the decision is made (known as the 'fair hearing rule'). The fair hearing rule includes not only the right of a person to contest any charges against them but also to test any evidence upon which any allegations are based. Where a bill limits or excludes the right to procedural fairness the committee expects the explanatory memorandum to the bill to address the following matters:

• the nature and scope of the exclusion or limitation; and

• why it is considered necessary and appropriate to restrict a person's right to procedural fairness.

1.186 The explanatory memorandum clarifies that this amendment seeks to codify the Therapeutic Goods Administration's current practice. It further states that:

...observing the requirements of the natural justice hearing rule would compromise the TGA’s ability to provide health and safety information to stakeholders in a timely manner and is, therefore, contrary to the public interest. Any delay in the ability to release critically important safety information may have grave consequences for patients and public health, if critical safety information is not able to be disclosed urgently. This could even include the risk of death - for instance, if the public were not able to be informed about the risks posed by a particular product and continued to use the product, or if State or Territory health departments were not able to be alerted to particular adverse events associated with a product and were not able to work with practitioners or providers to limit (or cease) the use of the product.^[106]

1.187 While acknowledging this explanation and the importance of conveying information relevant to public health and safety in a timely way, the committee considers that this does not, of itself, justify such a broad exclusion of the natural justice hearing rule. The committee notes that some of the information that can be released under section 61 may not, in all circumstances, be of such an urgent nature as to justify this exclusion. For example, in cases of potential tampering with therapeutic goods, it may sometimes be more appropriate to seek further information from the manufacturer before release.

1.188 The committee's concerns are heightened in this instance given the breadth of the information that may be released, and the potential effects of such a release on individuals. For example, subsection 61(5C) provides that the Secretary may release to the public therapeutic goods information of a kind specified under subsection 61(5D). Subsection 61(5D) provides that the minister may, by legislative instrument, specify kinds of therapeutic goods information. The kind of information that may be released to the public is therefore potentially very broad and may adversely affect a manufacturer or sponsor, for example, in circumstances where it may be more appropriate to seek further comment. While the committee notes that the Therapeutic Goods Administration may still observe the requirements of the natural justice hearing rule before releasing information, the committee considers that it would be preferable to narrow the exclusion of procedural fairness to circumstances where it is required for urgent public safety reasons.

1.189 In addition, the committee notes that the courts have consistently interpreted procedural fairness obligations flexibly based on specific circumstances and the statutory context. Consideration by the courts of the procedural fairness obligations that may arise in relation to an information disclosure power such as section 61 would include consideration of the urgency of the particular circumstances necessitating disclosure. Given the high degree of flexibility already applied by the courts to matters of procedural fairness, it is not clear to the committee why it is necessary to set out a broad exclusion from procedural fairness within the bill.

1.190 In light of this, the committee requests the minister's advice as to:

• why it is considered necessary to provide a broad exclusion to procedural fairness within the bill, noting the flexibility that is already applied by the courts when considering the extent to which procedural fairness obligations might apply in a particular circumstance; and

• whether, at a minimum, the amendment can be narrowed to exclude procedural fairness to circumstances where disclosure is required for urgent public safety reasons.

Incorporation of external material as existing from time to time^[107]

1.191 Items 12, 15, 16, 20 and 30 of Schedule 12 to the bill seek to introduce proposed subsections 3C(3), 26BF(6), 28(2AA), 36(5) and 61(8C) to provide that instruments made under these sections may incorporate any matter contained in an instrument or other writing as in force or existing from time to time.

1.192 As a matter of general principle, any member of the public should be able to freely and readily access the terms of the law. Therefore, the committee's consistent scrutiny view is that where material is incorporated by reference into the law it should be freely and readily available to all those who may be interested in the law.

1.193 The explanatory memorandum explains that this is important for flexibility and to maintain currency with international best practice, and any document incorporated from time to time would only occur after appropriate consultation with stakeholders affected by such instruments.^[108]

1.194 While noting this explanation, the explanatory memorandum does not comment on whether the incorporated material will be made freely and readily available to all persons interested in the terms of the law.

1.195 The committee requests the minister's advice as to whether material incorporated from time to time will be made freely and readily available to all persons interested in the law.

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[95] Schedule 5, item 2, proposed section 45AC. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).

[96] Subsection 13.3(3) of the Criminal Code provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.

[97] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 50.

[98] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 52.

[99] Explanatory memorandum, p. 34.

[100] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 50–52.

[101] Schedule 5, item 2, proposed subsection 45AD(2). The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(i).

[102] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 23.

[103] Explanatory memorandum, p. 34.

[104] Explanatory memorandum, p. 35.

[105] Schedule 10, item 1, proposed subsection 61(13). The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(iii).

[106] Explanatory memorandum, p. 48.

[107] Schedule 12, items 12, 15, 16, 20 and 30, proposed subsections 3C(3), 26BF(6), 28(2AA), 36(5) and 61(8C). The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(v).

[108] Explanatory memorandum, p. 55.