The former chairman of collapsed timber company Gunns Limited has been ordered into mediation with the Commonwealth Director of Public Prosecutions in the benchmark case.

The extra penalty was sought after an outcry at Mr Gay's original $50,000 fine in 2012 over the December 2009 sale of shares when he held price sensitive information in a monthly management report.

The information revealed that Gunns' sales revenue was down 31.1 per cent on the month, and in excess of 100 per cent on the same month in 2008, the Tasmanian Supreme Court was told.

After its attempt to force the payment of the $3 million gross proceeds of the share sale was rejected by the Tasmanian Supreme Court, the DPP sought around $600,000 in net losses avoided by the sale.

Judge Stephen Estcourt said on Tuesday he did not accept the case put by Mr Gay's counsel, that he derived no benefit because he sold the shares for $36,000 less than he paid for them.

He said that while a principal object was to punish and deter, the harshness of a double punishment of Mr Gay might be mitigated if an additional penalty took into account his previous fine.

He concluded  that Mr Gay's benefit from his crime of insider trading should be assessed on the price he achieved, $3.095 million, and the money he would have gained if he lawfully sold them in February 2010.

"The amount will need to be assessed in default of any agreement as to its quantum by reference to expert opinion evidence," Judge Estcourt said.

"The application is now one most suitable for alternative dispute resolution, and I propose to make an order referring the matter for mediation."