As we wait to see how the SFO will tackle large corporate prosecutions under the Bribery Act, a question on many people’s lips is whether the UK will follow the US in adopting the use of deferred prosecution agreements (or DPAs). Our US colleagues recently blogged on the US prosecutors’ long-established and increasingly common practice of negotiating such agreements and on SFO Director, Richard Alderman’s, belief that there is “considerable scope” for the use of deferred prosecutions in relation to SFO investigations.
There are a number of benefits to be gained from giving UK prosecutors the power to negotiate DPAs. Certainly the cost and time involved in investigating offences would be significantly reduced, which is good news for the public purse. Further, a well negotiated DPA that gives proper attention to remediation (e.g. through monitoring) as well as to punishment, has the potential to effect a permanent positive change in the culture of an organisation.
However, there are a number of tricky issues that need to be resolved before the use of deferred prosecution agreements can be adopted in the UK. The following issues have lately been raised by leading practitioners in the field, many of whom support the concept, but advocate a cautious and considered approach:
- Which cases are suitable for DPAs?
- When should the possibility of a DPA be raised? Before or after charges are laid?
- What role should the judiciary play in the negotiation of DPAs?
- How are penalties to be determined?
- How can global settlements be achieved given that a DPA in the UK offers no guarantee against prosecution in another jurisdiction?
- Is there scope and is it desirable to offer immunity to individuals within an organisation who co-operate with the investigation and facilitate an agreement being reached?
- Will the public have a negative view of DPAs and see them as a way for an organisation to pay its way out of being prosecuted?
Ideally the SFO will want the ability to enter into DPA negotiations before charges are laid, to avoid a costly and time consuming investigation. But if the SFO proposes a DPA before it has sufficient evidence to lay charges, should an organisation be willing to admit liability at that stage? For organisations faced with the prospect of entering into a DPA, the decision will in some cases be akin to deciding whether or not to self-report.
The Bribery Library will be following this debate over the coming months and looking further at these issues.