Deferred Prosecution Agreements – what they are and how they work
Deferred Prosecution Agreements (DPA), introduced in February 2014 under the provisions of Schedule 17 of the Crime and Courts Act 2013, are intended to avoid lengthy and expensive prosecutions of self-reporting companies.
Similar in a way to a plea bargain, a DPA is effectively an agreement between a prosecuting body – the Serious Fraud Office (SFO) or Director of Public Prosecutions (DPP) – and a commercial entity which could potentially be prosecuted.
The agreement allows a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions.
DPAs can be used for fraud, bribery and other economic crime, but only by organisations, never individuals.
The key features of DPAs are that they
- enable a corporate body to make full reparation for criminal behavior without the collateral damage of a conviction (for example sanctions or reputational damage that could put the company out of business and destroy the jobs and investments of innocent people)
- are concluded under the supervision of a judge, who must be convinced that the DPA is ‘in the interests of justice’ and that the terms are ‘fair, reasonable and proportionate’
- avoid lengthy and costly trials
- are transparent, public events
Under a DPA, a prosecutor charges a company with a criminal offence but proceedings are automatically suspended if the DPA is approved by the judge.
A company would only be invited to enter DPA negotiations if there was full cooperation with investigations. The SFO does not take self reports at face value but must separately establish the extent of the criminality.
If the negotiations go ahead, the company has to agree to a number of terms, such as paying a financial penalty, paying compensation and co-operating with future prosecutions of individuals.
If the company does not honor the conditions, the prosecution may resume.
During the past decade, DPAs have proved to be an effective enforcement tool – but they have also received strong criticism from those who say that such agreements also offer a route to escape culpability.
Some criticism also comes from the fact that it is practically impossible to secure convictions against people because in the UK, unlike the USA for example, they are not available to individuals.
