Deferred Prosecution Agreements, Invitation to Comment on ...

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    Invitation to comment on proposed new rules

    Introduction 1. The Criminal Procedure Rule Committee proposes making rules to supplement the provisions for deferred prosecution agreements contained in Schedule 17 to the Crime and Courts Act 2013. The Committee invites views. 2. The Rule Committee is the body appointed under section 70 of the Courts Act 2003 to make rules governing the practice and procedure to be followed in the criminal courts. The rules currently in force are The Criminal Procedure Rules 2012, which came into force on 1st October, 2012, amended from 1st April, 2013, by the Criminal Procedure (Amendment) Rules 2012. Information about the Committee and about the Rules may be found on the website of the Ministry of Justice at: 3. The Rule Committee would be especially grateful for the views of those members of the judiciary and of the legal professions, of those prosecuting and other authorities, and of those commentators, to whom this invitation has been addressed, and who are listed in an appendix to this invitation, at page 11. The Committee would welcome, too, the views of any others whom those consulted may know to have an interest in the subject matter of this proposal. 4. With this invitation is a copy of the proposed rules, namely a new Part 12 of the Criminal Procedure Rules, and amendments (marked by underlining) to rules 76.1 and 76.7, about costs. 5. The Committee invites comments on the proposed rules generally, or on any aspect of them. The questions that those consulted are asked to consider in particular appear at paragraph 52, on page 10. Please reply to the Criminal Procedure Rule Committee secretariat at the Ministry of Justice by 30th September, 2013. Responses by email may be sent to: 6. Although the Committee does not intend to publish a list of those who comment, or the content of their comments, respondents are asked to bear in mind that responses will be treated as public documents in accordance with the Freedom of Information Act 2000 and may be made available to enquirers on request.


  • Background 7. Schedule 17 to the Crime and Courts Act 2013 enacts provision for a deferred prosecution agreement, which the Explanatory Notes published with the Act describe as a new enforcement tool to deal with economic crime committed by commercial organisations. Such agreements are novel, and so, too, therefore, is the associated procedure required. However, that procedure is for the most part compelled by the Act and is straightforward. The elements of it are (this is not a resume of all the provisions of Schedule 17):

    (1) The prosecutor must apply to the Crown Court for a declaration that (a) entering into a deferred prosecution agreement with the proposed defendant is likely to be in the interests of justice, and (b) the proposed terms of the agreement are fair, reasonable and proportionate (Schedule 17, paragraph 7: an application described in the proposed rules as a prosecutors application to the court to approve a proposal to enter an agreement).

    (2) If the court makes that declaration, then when the parties have agreed terms the prosecutor must apply again, for a declaration that (a) the (now settled) deferred prosecution agreement is in the interests of justice, and (b) the terms of the agreement are fair, reasonable and proportionate (Schedule 17, paragraph 8: in the proposed rules, a prosecutors application to the court to approve the terms of an agreement).

    (3) If the court again declares itself satisfied, then a prosecution at once begins, on an indictment preferred with the judges consent; and that prosecution is at once suspended automatically by the legislation (Schedule 17, paragraphs 2 and 8).

    (4) If, subsequently, the prosecutor believes that the defendant has failed to comply with the terms of the agreement, then on application by the prosecutor (in the draft rules, an application on breach of agreement) the court must decide whether the defendant has indeed failed to comply and, if so, then whether to terminate the agreement or instead to invite the parties to agree proposals to remedy that failure (Schedule 17, paragraph 9).

    (5) If (i) on an application on breach of agreement the court invites the parties to make proposals to remedy the defendants failure, or (ii) variation of the agreement is necessary to avoid a failure by the defendant to comply with it, in circumstances which the parties neither could have foreseen nor did foresee: then in either case the prosecutor must apply to the Crown Court for a declaration that (a) the variation proposed by the parties is in the interests of justice, and (b) the terms of the agreement as varied are fair, reasonable and proportionate (Schedule 17, paragraph 10: described in the proposed rules as a prosecutors application to the court to approve a variation of the terms of an agreement).

    (6) If the agreement is terminated by the court, the suspension of the associated prosecution is not automatically removed but it may be lifted on an application by the prosecutor (Schedule 17, paragraph 2(3): in the proposed rules, an application to lift suspension of prosecution).

    (7) If, however, the agreement expires by effluxion of time, without premature termination by the court, then the prosecutor must give notice discontinuing the


  • prosecution (Schedule 17, paragraph 11: in the proposed rules, a notice to discontinue prosecution).

    (8) The prosecutor is obliged by various provisions of Schedule 17 to publish specified information about the courts and the prosecutors decisions. On application by either party, the court may order that publication to be postponed (Schedule 17, paragraph 12: in the proposed rules, an application to postpone the publication of information by the prosecutor).

    8. Criminal Procedure Rules govern the practice and procedure of the Crown Court in any case in which that court deals with a criminal cause or matter. Proceedings before that court under Schedule 17 to the Act are in such a cause or matter. To that extent, therefore, they fall within the competence of the Rules. The deferred prosecution agreement rules Location of the proposed rules 9. In the Committees view, these rules belong in the preliminary proceedings division of the Criminal Procedure Rules. Within that division, Part 12 recently was vacated (by the removal to Part 9 of the rules about sending for trial). Hence the location presently proposed. However, the Rule Committee intends that the Rules should be re-organised in 2015, by when it will be possible to dispose of empty Part numbers. So Part 12 may be temporary accommodation. Procedure deriving from the Act and from other Criminal Procedure Rules 10. Much of the procedure contained in the proposed rules is compelled by the provisions of the Act, either expressly or by necessary implication. The Act itself requires that:

    (a) an application to approve a proposal to enter an agreement must be heard in private;

    (b) an application to approve the terms of an agreement, and any application to approve a variation of the terms of an agreement, may be heard in public or in private; and

    (c) (this by reason of the omission of any contrary provision) any application on the believed breach of an agreement, and any application to lift the suspension of a prosecution following termination of an agreement, must be heard in public unless, in the exercise of its inherent powers, the court were to order otherwise.

    11. Given the application of the Criminal Procedure Rules to proceedings in the Crown Court under Schedule 17, other rules, including the overriding objective, the Part 3 case management rules and the Part 5 and Part 16 rules about court records and reporting and access restrictions, respectively, all apply. Sequence of rules 12. The sequence of the rules follows the model of other Parts, and otherwise follows the sequence of Schedule 17. General


  • 13. The rules require each application for which they provide to be in writing. It has been assumed that, as a starting point, there should be created, and subsequently retained, written records of exactly what has been sought, and why, as well as records of the courts decisions. However, the proposed rules provide for two exceptions. 14. First, where the court approves a proposal to enter an agreement, it is not impossible (though it may be unlikely) that the parties prior negotiations have advanced sufficiently for them to be able at once to invite the court to approve the terms of that agreement. Of necessity, in such a case, there must be an agreement to approve; and a draft indictment; and perhaps some other material relevant only to an approval of the terms of the agreement, not relevant to the proposal to enter it. Of necessity, the court must be willing to proceed at once. But where the parties invite the court to proceed at once from the first to the second application, and the court agrees to do so under (in the proposed rules) rule 12.2(7)(a), then it may be unnecessary for the rules to require that the application under rule 12.4 must itself be in writing, as well as the immediately preceding application under rule 12.3. Therefore the rules allow the court to waive the requirement for the second application to be written: rule 12.11(1)(b)(i). 15. Second, it is also possible that, where a prosecutor establishes to the satisfaction of the court that the defendant has failed to comply with a deferred prosecution agreement, and the court decides to terminate the agreement, then the prosecutor will wish to apply at once for the lifting of the suspension of the prosecution. Here again, if the court agrees to proceed at once to deal with that second application, then justice may not require written notice of it; or require another 28 days for the defendant to prepare a response. Here again, therefore, the rules allow the court to proceed at once (rule 12.2(7)(b)); to abbreviate, potentially to nothing, the period for a response (rule 12.11(1)(a)); and to allow the second application to be made orally (rule 12.11(1)(b)(ii)). Rule 12.1: When this Part applies 16. In the manner of rules introducing other Parts of the Criminal Procedure Rules, the rule defines the scope of the Part. Notes to the rule summarise the principal relevant statutory provisions. Rule 12.2: Exercise of courts powers 17. In the manner of other such Criminal Procedure Rules1, the rule incorporates the statutory requirements for hearings to be in private, or in public, as the case may be. 18. In the manner of other such Criminal Procedure Rules, the rule specifies circumstances in which the court may, or must not, exercise its relevant powers in a partys absence2; and indicates the circumstances in which the court may exercise its (here, inherent) power to adjourn3. 19. There is provision for hearings in private that is compelled by Schedule 17; and provision explicitly to allow one application to follow another immediately, in 1 See, for example, rule 9.2. 2 See, for example, rules 19.2 and 29.8. 3 See, for example, rule 37.2(3).


  • connection with the approval of an agreement, or in connection with the termination of an agreement. 20. Rule 12.2(3) requires that each application for the courts approval (that is, of a proposal to enter an agreement; of the terms of an agreement; or of a variation of those terms) must be accompanied by a declaration by each party that neither has supplied inaccurate, misleading or incomplete information. The purpose of such a declaration is to give the Crown Court a potential remedy in the event of it being misled. The prosecutor can include a sanction for non-disclosure by the defendant as a term of the agreement: paragraph 5(5) of Schedule 17. If non-disclosure by the defendant should emerge after the agreement has expired, then the prosecutor can institute fresh proceedings: paragraph 11(3) of Schedule 17. But those are matters for the prosecutor. This proposed requirement would give the court its own sanction. 21. Broadly comparable declarations are required by other rules: rule 6.3(4) (declarations in support of applications for certain investigation orders; rule 28.4 (required content of written applications for witness summonses, etc.); rule 33.3(1)(j) (required content of an experts report); rule 57.7 (statements of truth in witness statements in confiscation, etc. proceedings); and rule 62.12 (required content of a witness statement in support of an application to commit for contempt of court). Some of those requirements apply in magistrates courts as well as in the Crown Court and so have been framed accordingly. However, the relevant powers of the Crown Court are not the same as those of magistrates courts. 22. The effect of a rule of court such as that here proposed has been considered in the context of Civil Procedure Rules. Part 32 of those Rules contains provisions that deal with evidence. CPR rule 32.14 provides, (1) Proceedings for contempt of court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth. (2) Proceedings under this rule may be brought only (a) by the Attorney General, or (b) with the permission of the court. 23. That rule was considered by the Vice-Chancellor in Malgar Ltd. v R. E. Leach (Engineering) Ltd.4:

    It is, I think, necessary to make clear that rules of court cannot make substantive changes in the law of contempt. There is much case law describing in what circumstances a contempt of court is committed. There are civil contempts and there are criminal contempts and the line between the two is not always easy to draw. But the circumstances which may justify a finding of contempt are established by case law and set out in the text books on the subject. It is not open to rules of court to introduce a new category of contempt, and CPR 32.14 does not do that. It provides for the possibility of a person being prosecuted for contempt if he makes or causes to be made a false statement, etc., but it does not predict what the outcome of the prosecution will be. That is a matter which must be left to the general law.

    4 [2000] F.S.R. 393 (Sir Richard Scott, V-C; judgment 1/11/1999).


  • So what is the general law in this particular area? The general law of contempt is that actions done by an individual which interfere with the course of justice or which attempt to interfere with the course of justice are capable of constituting contempt of court. In order for the individual who has done acts which fall into that category to be liable for contempt, an appropriate state of mind of the individual must be shown.

    24. In that case, the High Court was concerned with the exercise of its own powers to punish for contempt of court for making a false statement. Section 45(4) of the Senior Courts Act 1981 confers on the Crown Court the like powers, rights, privileges and authority as the High Court in relation to, among other things, any contempt of court. It follows that the High Court and the Crown Court can punish as contempt false statements on which those courts rely when considering an application, assuming that such false statements interfere with the course of justice or constitute an attempt to do so. 25. Other sanctions, too, might be available. The offence of perjury would be committed by making, on oath or affirmation, a material statement that the maker knew to be false, or did not believe to be true. In R v Cotter5 the Court of Appeal confirmed that the offence of perverting the course of public justice can be committed by manipulating or deliberately misdirecting activity undertaken in the course of an investigation. The offence is against common law, and is triable only on indictment. Plainly, its prosecution is not to be undertaken lightly. It has been said that it should be charged only where there are serious aggravating features6. In principle, however, there seems no reason why that offence might not be committed by knowingly making false assertions to a court in such a declaration as the proposed rule would require. 26. It follows that although Criminal Procedure Rules have no power themselves to impose a sanction for making a false declaration, there seems little reason to doubt that the Crown Court has an inherent power to punish such falsity as a contempt of court; and reason to think that other sanctions, too, might apply. Thus requiring a declaration lays the foundations for the imposition of such sanctions, including proceedings brought on the courts own initiative for contempt, should that declaration prove false. 27. As far as concerns the terms of the proposed declaration, paragraph 11(3) of Schedule 17 removes the bar to prosecution which otherwise would apply after the defendants successful completion of a deferred prosecution agreement where the prosecutor subsequently discovers that, during the course of negotiations for that agreement, the defendant provided inaccurate, misleading or incomplete information to the prosecutor and [the defendant] knew or ought to have known that the information was inaccurate, misleading or incomplete. That being the criterion for imposition of the prosecutors sanction for a defendants lack of candour, in the Committees view a comparable criterion would be appropriate for the imposition of the courts sanction for either partys such conduct.

    5 [2002] 2 Cr.App.R. 29. 6 R v Sookoo [2002] EWCA Crim 800.


  • 28. The statutory provision that the defendant will be susceptible to the prosecutors sanction if the defendant corporation, partnership or association provided defective information and knew or ought to have known it to be defective imposes stringent demands on the defendant. But that statutory provision benefits by the fact that it will apply with hindsight, when what the corporate defendant knew or ought to have known can be assessed by reference to what has since emerged. It would be fanciful to expect of an individual or corporate declarant an assertion, in the present, that he, she or it knows nothing adverse of which he, she or it ought to know. Nevertheless, a corporate party reasonably can be required to declare that that corporation, at the time of that declaration, knows of nothing adverse; and the individual by whom that corporation acts in making that declaration reasonably can be required to assert that, at the time of that declaration, she or he personally has made enquiries and is aware of nothing adverse. 29. Thus if, for example, the chairman of the board makes the declaration by X plc in ignorance of material information withheld from her or him by the sales director, and hence withheld from the court, then the chairmans ignorance will avail the company nothing should that lack of candour in due course emerge. The corporation, through its sales director, at the time of the chairmans declaration knew of the information in question, rendering the declaration by the corporation false. And, further to discourage corporate concealment of material information, the declaration would require of the chairman, in this example, confirmation that he or she personally had made reasonable enquiry and is aware of nothing adverse: which would render the chairman personally liable to proceedings for contempt were either of those assertions to prove untrue. 30. The same principles would apply to the prosecuting authority, of whom the same declaration would be required. 31. Rule 12.2(5) is to encourage judicial continuity. That is likely to be especially desirable in these proceedings. In common with other Criminal Procedure Rules, the proposed rule contains no prescriptive listing directions. The Committee anticipates that such directions will be issued by or on behalf of the Lord Chief Justice. Rule 12.3: Application to approve a proposal to enter an agreement 32. The rule adopts the device used often elsewhere in the Rules of requiring that, as a matter of procedure, an application should include all the information that the court will need to meet the statutory requirements applicable7. 33. It being axiomatic that the parties must identify the proposed offence or offences (see paragraphs 1, 2 and 5(1) of Schedule 17), and to the clear advantage of both to do so with precision, the rule requires that the offence or offences should be identified by means of a proposed indictment.

    7 See, for example, rule 29.10.


  • 34. Consistently with paragraph 5 of Schedule 17, it is not suggested that every deferred prosecution agreement should contain every such term as is listed in rule 12.3(3)(f). 35. The defendants written consent is not a statutory requirement, but since the essence of the regime is an agreement between two parties, rendered effective by judicial approval, it seems appropriate to require that the party who is not the applicant should contribute written confirmation of that partys assent. Rule 12.4: Application to approve the terms of an agreement 36. The comments on rule 12.3 again apply (lists of what is required to meet statutory requirements). 37. The provisions of rule 12.4(3)(e) and (4), about the draft indictment, are intended to meet the requirements of paragraph 2(1) of Schedule 17 to the Act and section 2 of the Administration of Justice (Miscellaneous Provisions) Act 1933. In this context, rule 12.4(4) operates in substitution for rule 14.1. Rule 12.5: Application on breach of agreement 38. The rule supplies a straightforward procedure to supplement paragraph 9 of Schedule 17. 39. Given that the court must make a finding as to whether the defendant has or has not failed to comply with a deferred prosecution agreement, it is axiomatic that the defendant should have a formal opportunity to make representations. The period for which the proposed rule provides (28 days) is one the Committee thinks realistic and appropriate. Rule 12.6: Application to approve a variation of the terms of an agreement 40. The comments on rule 12.3 again apply. Rule 12.7: Application to lift suspension of prosecution 41. The application contemplated by paragraph 2(3) of Schedule 17 is discretionary, not mandatory. The Schedule makes no other provision for it save by that sub-paragraph. The prosecutor is not required to publish information about a decision to apply or not to apply. 42. Against that background, the Committee thinks the proposed time limit (as soon as practicable after termination) capable of objective determination, realistic and appropriate. Rule 12.11(1)(a) would allow the court to extend it. Rule 12.8: Notice to discontinue prosecution 43. The rule supplies a straightforward procedure to supplement paragraph 11 of Schedule 17. Rule 12.9: Application to postpone the publication of information by the prosecutor 44. The rule supplements paragraph 12 of Schedule 17. Consideration was given to placing this rule, or something like it, in Part 16 of the Criminal Procedure Rules,


  • those dealing with reporting and public access restrictions. However, paragraph 12 does not concern a restriction on the general right to attend and report on a public hearing. It concerns only the obligation of the prosecutor to publish information that is peculiar to proceedings in connection with a deferred prosecution agreement. The Committee preferred the inclusion of the rule in this Part. The requirements are modeled, nonetheless, on rule 16.4(3) (about applications for reporting, etc. restrictions). Rule 12.10: Duty of court officer, etc. 45. In the Committees view, Schedule 17 proceedings should be recorded. Rule 5.5 (Recording and transcription of proceedings in the Crown Court) will not apply. It concerns only proceedings in the Crown Court which are susceptible to appeal to the Court of Appeal, which these are not. 46. Consideration was given to elaborating rule 5.5. However, that rule provides extensively for the powers and participation of the Registrar of Criminal Appeals, which do not apply here. The Committee concluded that the rule should be repeated, in a modified version, in this Part. 47. The Committee assumes that, where an application for the courts approval under either rule 12.3 or rule 12.4 is to proceed in private (as is obligatory, in the first instance, and discretionary, in the second), then it will be inappropriate to publish the parties identities: for the same reasons as have persuaded Parliament to require such privacy (the risk of premature commercial damage to the defendant and hence to the defendants innocent employees and investors). Rule 12.11: Courts power to vary requirements under this Part 48. In the manner of corresponding rules in other Parts of the Criminal Procedure Rules, this rule allows the court to shorten or to extend a procedural time limit under this Part. The periods to which it applies, therefore, are the 28 days for a defendants representations under rules 12.5(4) and 12.7(3); the requirements for the prosecutor to act as soon as practicable under rules 12.3(2)(a), 12.4(2)(a), 12.5(2)(a), 12.6(2)(a) and 12.7(2)(a); and the requirements for an applicant to act as soon as practicable under rule 12.9(2)(a). In other Criminal Procedure Rules, as soon as practicable is treated as a period susceptible to being ascertained objectively, notwithstanding that it is not one expressed in specified units of time. The amended costs rules 49. Section 52 of the Senior Courts Act 1981 provides:

    52 Costs in Crown Court (1) Rules of court may authorise the Crown Court to award costs and may regulate any matters relating to costs of proceedings in that court, and in particular may make provision as to-

    (a) any discretion to award costs;


  • (b) the taxation of costs, or the fixing of a sum instead of directing a taxation, and as to the officer of the court or other person by whom costs are to be taxed;

    (c) a right of appeal from any decision on the taxation of costs, whether to a Taxing Master of the Senior Courts or to any other officer or authority;

    (d) a right of appeal to the High Court, subject to any conditions specified in the rules, from any decision on an appeal brought by virtue of paragraph (c);

    (e) the enforcement of an order for costs; and

    (f) the charges or expenses or other disbursements which are to be treated as costs for the purposes of the rules.

    (2) The costs to be dealt with by rules made in pursuance of this section may, where an appeal is brought to the Crown Court from the decision of a magistrates' court, or from the decision of any other court or tribunal, include costs in the proceedings in that court or tribunal.

    (2A) Subsection (6) of section 51 applies in relation to any civil proceedings in the Crown Court as it applies in relation to any proceedings mentioned in subsection (1) of that section.

    (3) Nothing in this section authorises the making of rules about the payment of costs out of central funds, whether under the Part II of the Prosecution of Offences Act 1985 or otherwise, but rules made in pursuance of this section may make any such provision as in relation to costs of proceedings in the Crown Court, is contained in section 18 of that Act or in regulations made under section 19 of that Act (awards of party and party costs in criminal proceedings).

    (4) Rules made in pursuance of this section may amend or repeal all or any of the provisions of any enactment about costs between party and party in criminal or other proceedings in the Crown Court, being an enactment passed before, or contained in, the Part II of the Prosecution of Offences Act 1985.

    (5) Rules made in pursuance of this section shall have effect subject to the provisions of section 41 of, and Schedule 9 to, the Administration of Justice Act 1970 (method of enforcing orders for costs).

    50. The Committee was invited to exercise its power under that section to make a costs provision omitted from the Act. By amendments to rules 76.1 and 76.7, on an application on breach of agreement under rule 12.5; for variation, under rule 12.6; and for the lifting of the suspension of a prosecution, under rule 12.7: the court would have power to award costs. In principle, that power would be exercised in favour of the applicant, where the application succeeds, and otherwise in favour of the other party. 51. Provision for the criteria by reference to which costs should be awarded and assessed already are contained in Part 76: in rules 76.2 (Costs orders: general rules) and 76.11 (Assessment and re-assessment). Questions for consideration


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    52. The Criminal Procedure Rule Committee invites those consulted to comment on any aspect of this proposal, general or specific, and on any aspect of the proposed rules. Views on the following would be especially appreciated:

    (1) Should there be a requirement for a declaration by each party to the court, as proposed?

    (2) If so, are the proposed terms of the required declaration appropriate?

    (3) Insofar as the rules incorporate provisions of Schedule 17 to the Crime and Courts Act 2013, do they do so accurately and clearly, or is there anything in them liable to mislead the reader?

    (4) Bearing in mind that other, existing, Criminal Procedure Rules will apply, are there any additional procedure rules needed and, if so, about what?

    Criminal Procedure Rule Committee June, 2013

    Appendix Copies of this invitation have been directed to:

    The Senior Presiding Judge and the presiding judges The Council of HM Circuit Judges The Senior District Judge (Chief Magistrate) The Registrar of Criminal Appeals The Criminal Bar Association The Law Society The Criminal Law Solicitors Association The London Criminal Courts Solicitors Association Solicitors Association of Higher Court Advocates The Institute of Legal Executives Solicitors in Local Government HM Courts and Tribunals Service The Ministry of Justice The Attorney General The Home Office The Crown Prosecution Service The Serious Fraud Office The Whitehall Prosecutors Group those academics and commentators who regularly publish commentary on the Rules and those others who have expressed an interest in these rules in correspondence with the Ministry of Justice.


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