introduction of deferred prosecution agreements in the uk in 2014

Deferred Prosecution Agreements now introduced in the

United Kingdom

By Iohann Le Frapper, Chief Legal Officer for Gulf Bridge International

Vice-Chair, and Vice-Chair of the ICC Commission on Corporate Responsibility and Anti-corruption

On April 2, 2014

Timeline of key milestones:

Bribery Act 2010

Crime and Courts Act 2013 (Section 45) introduced the concept of DPAs ;

14 February 2014 :DPAs Code of Practice issued by the Crown Prosecutions Services (“CPS”) and the SFO ;

24 February 2014: DPAs came into force as a tool available for public prosecutors and the Serious Fraud Office (“SFO”) and an option for companies to consider. Prosecution will remain the main route

1 October 2014 : Definitive Guidelines issued by the Sentencing Council will be applicable to all organisations sentenced on OR after that date, on the ground of fraud, bribery and money-laundering (regardless of the date of the offence).

- 10 steps to be followed

- Offence category to be determined by culpability and harm

What is a DPA ?

Voluntary agreement among the prosecutor and a corporate person

Criminal charges are brought but are suspended subject to satisfying several compliance conditions (e.g. penalties, cooperation, remedial action, monitor)

SFO Director emphasized 2 most important features of DPA :

i. Judicial oversight (to answer with court disapproval of cross-jurisdictional settlement agreements) , and

ii. Unequivocal cooperation (i.e. timely self-reporting, proactive compliance program, disclosure of full and frank internal investigation findings, disciplinary actions will be expected)

Two stage-test for entering into DPA:

i. evidential stage :

– DPA may be offered if evidential test is met (reasonable suspicion of committed corporate offence ; realistic prospect of conviction).

– If not, civil recovery action is a potential route for prosecutor (to recover the proceeds of “unlawful conduct”)

ii. public interest stage:

– Early involvement of a judge in a private hearing to rule whether the proposed DPA : is “in the interests of justice”, and the proposed terms and statement of facts are “fair, reasonable and proportionate”.

Issue : will courts approve DPAs without admission of guilt by companies ?

Key differences with US DPAs:

Allowed for corporate offenders, so commercial organizations only ( not individuals) # US: both individuals and organizations

Settlement of specific offences only(that is fraud, bribery, money-laundering) # US: broad range of criminal activities

Authority to enter into DPAs reserved to heads of CPS and SFO # US

Transparency of process: final court hearing as a public event # US

Key review, approval and oversight role of the judiciary (approval, breach or variation) # discretion of US DoJ

Thank you