Deferred Prosecution Agreements

Deferred Prosecution Agreements is a topical guide to the brand new regime for addressing corporate liability in England and Wales. It provides a straightforward account of the development of the new rules, and will be essential for all those at the nexus of corporate crime and prosecution.

• Brings together a range of diverse materials in one useful and straightforward guide to the law and use of DPAs.
• Defines the circumstances in which a DPA would be an appropriate course of action, and what processes to follow in the creation of one.
• Sets out the development of the relevant legislation leading to the availability of DPAs in the UK from 2014.
• Considers what constitutes corporate criminal liability and the relevant offences which might lead to the use of a DPA.
• Identifies the prosecuting authorities capable of entering into a DPA.
• Illustrates best practice in corporate compliance, taking into consideration the prosecutor’s criteria for decision-making where internal misconduct may have been identified.
• Clearly sets out procedural requirements and published guidance, providing practical steps for corporate legal practitioners entering into negotiations leading to a DPA.
• States the potential penalties and sanctions available via a DPA, and addresses the consequences of not adhering to the provisions made therein, as well as other alternative outcomes.
• Takes into account the application of DPAs internationally and the potential for global settlements.
• US DPAs are reviewed alongside the UK case authorities relating to corporate criminal prosecutions, grounding the UK regime against helpful comparative examples.
  

1. Prosecuting Corporate Criminality – the background of DPAs
1. “The economics of greed and the prosecutor’s dilemma”
2. Corporate criminal liability
3. Costs and risks of corporate prosecutions
4. Public benefits of holding corporations to account
5. Development of the DPA as a tool for corporate prosecutors
6. The Thompson Memorandum and the development and the development of prosecuting criteria
7. Criteria in favour of a DPA as opposed to prosecution
8. “Collateral consequences”: Public interest reasons for saving the corporation
9. The UK model: power to the judges
10. Background to the UK DPA: R v Innospec [2010]
11. From Innospec to the Crime and Courts Act 2013
12. Procedure for obtaining a UK DPA
13. Content of a UK DPA
14. The future

2. Corporate Criminal Liability
1. Comparisons of corporate criminal liability tests
2. Successes and failures in prosecuting corporations
3. Other attempts at corporate criminal sanction
4. Fraud and corruption prosecutions
5. Financial Services and Markets Act sanctions
6. Companies Act sanctions
7. Civil Recovery under POCA 2002
8. Civil Recovery Orders by agreement
9. Arthur Andersen principle: does prosecution kill the company?

3. Application of DPAs internationally
1. The US model
2. Hong Kong: rejection of DPAs
3. France, Germany and Switzerland: alternative methods of resolution
4. Canada: “diversion”
5. Australia/New Zealand: following the UK model
6. Globally: little prosecution of corporate entities, focus on the prosecution of the individual
7. The UK: introduction of a codified DPA overseen by the Courts

4. Crime and Courts Act 2013
1. Background
2. Consultation
3. Government priorities
4. Provisions
5. Parties: designated prosecutors: Director of Public Prosecutions, Director of the SFO, other designees
6. Counterparties: companies, partnerships, unincorporated associations
7. Terms
8. Statement of facts, including admissions
9. Expiry date
10. Examples of requirements
11. Amount of costs: comparable to fine imposed for the offence on a guilty plea
12. Consequences of failure
13. Effect of DPA on court proceedings

5. Codified procedure – the distinction with the US model
1. Schedule 17 Crime and Courts Act 2013
2. Preliminary hearing
3. Final hearing
4. Court declaration with reasons:
i. Interests of justice
ii. Terms are fair, reasonable and proportionate
5. Date DPA comes into force; when declaration is made by the Crown Court
6. Possibility of hearings in private
7. Requirement to publish
8. Use of materials in criminal proceedings
9. Money received by the prosecutor under a DPA
10. Conduct constituting an alleged offence

6. Codes and Guidance
1. The US Attorney’s Manual
2. The UK DPA Code
i. The consultation
ii. General principles regarding when a DPA is appropriate
iii. Guidance on disclosure by the prosecutor
iv. Variation and termination
v. Steps when breach is suspected
3. Fraud Sentencing Guidelines
4. Criminal Procedure Rules
5. Bribery Act guidance
6. Disclosure Guidelines
7. Corporate Prosecution Guidelines and CPA Guidance on Corporate Criminal Liability

7. Amenable offences
1. US: no limitation, any criminal offence
2. UK: Specified offences
i. Conspiracy to defraud
ii. Cheating the public revenue
iii. Theft Act 1968 offences
iv. Customs and Excise Management Act 1979 offences
v. Forgery and Counterfeiting Act 1981
vi. Companies Act 1985
vii. Fraudulent evasion of VAT under Value Added Tax Act 1994
viii. Financial Services and markets Act 2000 offences
ix. Proceeds of Crime Act 2002 offences
x. Companies Act 2006 offences
xi. Fraud Act 2006 offences
xii. Bribery Act 2010 offences
xiii. Offences under the Money Laundering Regulations 2007
xiv. Any other offences as ordered by the Secretary of State

8. The First Alert and the Internal Investigation
1. Corporate compliance, intelligence and investigation systems
2. Whistle-blowing programs
3. The investigation
4. Evidence gathering
5. Risk of prejudice

9. Self-reporting
1. Planning and preparation
2. Decision-making and analysis on the suitability of a DPA
3. Documentation
4. The approach to the prosecutor

10. The Prosecutors
1. Department of Justice
2. Securities Exchange Commission
3. Serious Fraud Office
4. Crown Prosecution Service
5. Others as ordered by the Secretary of State

11. The Information
1. Content, form and effect of the Information or Agreed Facts
2. Drafting
3. Content
4. Risks
5. Future use of the Information
6. Impact on associated civil proceedings

12. Common terms imposed under a DPA
1. Admission of conduct
2. Financial penalties
3. Appointment of an independent monitor
4. Removal of certain staff
5. Implementation of compliance programs
6. Other terms
7. Prosecution undertakings

13. Court endorsement
1. Judicial objections in the US: US v HSBC [2013]
2. UK judicial objection to negotiated settlements
3. Opportunities for judicial intervention
4. Third party interests
5. Court powers under Crime and Courts Act 2013 Schedule 17

14. Breach, Variation and Elapse
1. Conclusion of the agreement by breach, variation or elapse
2. Breach of DPA
3. US examples
4. UK procedure
i. Prosecutor required to apply to the Court on suspected breach
ii. Burden of proof
iii. Remedy
iv. Publishing of decision
5. Variation of DPA
i. Terms may be varied at any time
ii. Court must make declaration, with reasons:
1. The variation is in the interests of justice, and
2. The terms of the DPA as varied are fair, reasonable and proportionate
iii. Procedure
iv. Application to the Crown Court by the prosecutor
v. Hearing may be in private
vi. Declaration, reasons and new order must be published

15. Alternative outcomes
1. Prosecution
2. Civil recovery
3. Civil litigation
4. Regulatory/disciplinary proceedings
5. Internal remedy
16. Global settlements
1. Purpose and history of global settlements
Conflict of laws
2. Double jeopardy
3. Negotiation
4. Judicial approval

17. US examples
18. Future Developments
Appendices
1. The DPA Code
2. US A

Polly Sprenger is a barrister and corporate investigator specialising in serious economic crime.  The former head of strategic intelligence at the Serious Fraud Office, she has extensive experience of civil and criminal investigations into investment crime, corruption, asset recovery and money laundering.

Polly has provided advisory services to a number of governmental agencies, including in 2012 serving as a special advisor to the Home Affairs Select Committee Inquiry into criminal activity by private investigators in the wake of the ‘phone hacking scandal.

In 2012 she was called to the Bar of England and Wales and completes her pupillage at red Lion Chambers in October 2013.

Polly is the co-author of Arlidge and Parry on Fraud 4th edition (2014).