On 25 April 2013 the Crime and Courts Act 2013 was enacted and on 24 February 2014 Deferred Prosecution Agreements [DPA] were introduced into UK law. The first DPA was agreed in the UK on 4 November 2015, at Southwark Crown Court before Sir Brian Leveson against Standard Bank (now known as ICBC Standard Bank plc).
A DPA is a voluntary agreement between a prosecutor and a commercial organisation whereby, in return for complying with a range of stringent conditions, the prosecutor will defer a criminal prosecution. It is not regarded as an alternative to prosecution but it is a conditional deferred prosecution.
DPAs are not available to individuals, they are between an organisation (a body corporate, a partnership or an unincorporated association) and a designated prosecutor but unlike in the USA it is granted by a judge sitting in open court. The deferral period ordinarily will run between 1- 3 years.
Ordinarily conditions within a DPA may allow for:
(i) A fine and/or costs paid to the prosecutor;
(ii) compensation to victims;
(iii) donation to charity;
(iv) disgorging any profits made;
(v) the implementation of compliance and to co-operate in any investigation.
Any money (not paid directly to victims) received from a DPA are paid into the Consolidated Fund- the government central bank account which receives criminal fines.
If any of the conditions are not met during the time period of the DPA then the prosecutor may institute criminal proceedings.
The merits of a DPA for an enforcement agency or a defendant may include:
– Avoiding the increased costs of a litigated prosecution;
– Providing an alternative to no criminal action at all;
– Avoiding the stigma of a criminal conviction and the very real damage that can be caused by a conviction thereby limiting the impact on businesses who would suffer from a public prosecution;
– Encouraging a culture of co-operation between the regulators and companies. The Ministry of Justice has hoped that DPAs will have a wider benefit in that more effective processing of cases could lead to a cultural change and an increase in companies self-reporting. This would in turn lead to a greater number of offences being identified and prosecuted by the SFO;
– The judiciary can ensure that the tests of fairness and interests of justice are applied to the DPA; this provides an element of scrutiny in the process. If a judge requires an amendment to the draft of the DPA then the prosecutor will have to follow this.
The drawbacks of a DPA include:
– a lack of incentive and certainty for companies to self-report in order to enter into a DPA. There is no guarantee that after a company self reports it will not be prosecuted. The SFO will consider various factors before a DPA can begin including the extent of the co-operation with the SFO and the stage at which a company reports itself. It will also consider whether a DPA would be in the public interest;
– Even if the SFO agreed to a DPA, a judge has to ultimately approve it. There is concern, particularly following the cases of Innospec and Dougall, that a judge may seek to go behind what has been agreed between the prosecutor and the company;
– Documents disclosed by the company could give rise to other offences not covered by the DPA.
The lack of certainty in the DPA system may mean that it will have a limited use in the UK. There is no true incentive for a company to self report, unless like in the Standard Bank case the finger of wrongdoing can clearly to be pointed to a ‘subsidiary’ who has effectively acted on a frolic of his own. This will provide no comfort to senior executives who, themselves, may be identified as the ‘inadequacy’.
For further reading, reference should be made to The Code of Practice for the Crown Prosecution Service and the SFO and Part 11 of the Criminal Procedure Rules 2015 applicable to DPAs.
On 25 April 2013 the Crime and Courts Act 2013 was enacted and on 24 February 2014 Deferred Prosecution Agreements [DPA] were introduced into UK law. The first DPA was agreed in the UK on 4 November 2015, at Southwark Crown Court before Sir Brian Leveson against Standard Bank (now known as ICBC Standard Bank plc).
A DPA is a voluntary agreement between a prosecutor and a commercial organisation whereby, in return for complying with a range of stringent conditions, the prosecutor will defer a criminal prosecution. It is not regarded as an alternative to prosecution but it is a conditional deferred prosecution.
DPAs are not available to individuals, they are between an organisation (a body corporate, a partnership or an unincorporated association) and a designated prosecutor but unlike in the USA it is granted by a judge sitting in open court. The deferral period ordinarily will run between 1- 3 years.
Ordinarily conditions within a DPA may allow for:
(i) A fine and/or costs paid to the prosecutor;
(ii) compensation to victims;
(iii) donation to charity;
(iv) disgorging any profits made;
(v) the implementation of compliance and to co-operate in any investigation.
Any money (not paid directly to victims) received from a DPA are paid into the Consolidated Fund- the government central bank account which receives criminal fines.
If any of the conditions are not met during the time period of the DPA then the prosecutor may institute criminal proceedings.
The merits of a DPA for an enforcement agency or a defendant may include:
– Avoiding the increased costs of a litigated prosecution;
– Providing an alternative to no criminal action at all;
– Avoiding the stigma of a criminal conviction and the very real damage that can be caused by a conviction thereby limiting the impact on businesses who would suffer from a public prosecution;
– Encouraging a culture of co-operation between the regulators and companies. The Ministry of Justice has hoped that DPAs will have a wider benefit in that more effective processing of cases could lead to a cultural change and an increase in companies self-reporting. This would in turn lead to a greater number of offences being identified and prosecuted by the SFO;
– The judiciary can ensure that the tests of fairness and interests of justice are applied to the DPA; this provides an element of scrutiny in the process. If a judge requires an amendment to the draft of the DPA then the prosecutor will have to follow this.
The drawbacks of a DPA include:
– a lack of incentive and certainty for companies to self-report in order to enter into a DPA. There is no guarantee that after a company self reports it will not be prosecuted. The SFO will consider various factors before a DPA can begin including the extent of the co-operation with the SFO and the stage at which a company reports itself. It will also consider whether a DPA would be in the public interest;
– Even if the SFO agreed to a DPA, a judge has to ultimately approve it. There is concern, particularly following the cases of Innospec and Dougall, that a judge may seek to go behind what has been agreed between the prosecutor and the company;
– Documents disclosed by the company could give rise to other offences not covered by the DPA.
The lack of certainty in the DPA system may mean that it will have a limited use in the UK. There is no true incentive for a company to self report, unless like in the Standard Bank case the finger of wrongdoing can clearly to be pointed to a ‘subsidiary’ who has effectively acted on a frolic of his own. This will provide no comfort to senior executives who, themselves, may be identified as the ‘inadequacy’.
For further reading, reference should be made to The Code of Practice for the Crown Prosecution Service and the SFO and Part 11 of the Criminal Procedure Rules 2015 applicable to DPAs.
