The NSW Law Reform Commission Report 132 Penalty Notices reviews and makes recommendations in relation to the penalty notice system in NSW. Penalty notices are imposed most often for minor offences, but the topic is nevertheless an important one.

People are far more likely to have contact with the justice system through a penalty notice than through a court. In 2009/10, 2.83 million penalty notices were issued in NSW, with a total value of more than $491 million dollars. In comparison, in 2009 the NSW Local Court imposed 116,915 penalties, of which 53,543 were fines. If, as appears likely, people make judgments about the justice system on the basis of experience with penalty notices, the fairness, consistency, and transparency of the penalty notice system is important, not only to those who receive a penalty notice, but potentially to the reputation of the justice system more broadly.
The efficiencies associated with issuing and enforcing penalty notices act as an inducement to extend the number of offences dealt with in this way. NSW has over 7,000 penalty notice offences under some 110 different statutes. The number of penalty notice offences is growing steadily and the seriousness of the offences is increasing. Most recently, penalty notices in the form of Criminal Infringement Notices (CINs) are being issued for minor criminal offences that have traditionally been dealt with by courts.
Penalty notices were introduced, and have expanded in scope, because of their significant advantages, especially their cost benefits. They save time and money for the agencies that issue them, for courts that avoid lengthy lists of minor offences, and for recipients who do not have to take time off work to attend court or pay court or legal costs. The penalty is immediate and certain and is usually significantly lower than the maximum penalty available for the offence, were it to be dealt with by a court. Penalty notice recipients also avoid having a conviction recorded.
However penalty notices also have disadvantages. One of these is their tendency to proliferate in ways that are not always consistent and fair. The inconsistencies in the present system, dealt with in Part Two of this report, are severe enough to threaten the reputation of the penalty notice system. They have lead to suggestions, reported to this inquiry, that penalty notice offences may be created, and penalty levels set, for improper reasons such as revenue raising.

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