In April this year, the director of the Serious Fraud Office (SFO) garnered press attention when she discussed the administration of deferred prosecution agreements (DPAs). Described as a form of ‘plea bargain’ for companies, they are still gaining prominence in this country.
A DPA was agreed as recently as this month. Serco Geografix admitted three instances of fraud and two of false accounting, in relation to what was described by the SFO as “a scheme to dishonestly mislead the Ministry of Justice” in relation to a contract for the provision of electronic tagging.
Only two agencies have the power to offer a DPA: the SFO or the National Crime Agency. Proposal of a DPA means that the agency believes there are sufficient grounds for a prosecution.
The relevant legislative provisions are contained within schedule 17 of the Crime and Courts Act 2013. This means that although a case is started in the Crown Court, it is automatically suspended upon court approval of the DPA.
As long as the company obeys certain conditions, the prosecution is suspended for a set amount of time. The conditions can differ from case to case, as can the time period.
Schedule 17 of the CCA permits a number of requirements. These can include paying monies to charity, payment of compensation to victims, and a financial penalty. Changes of a compliance nature can also be ordered.
Importantly, a company can also be ordered to pay the ‘reasonable costs’ of the prosecution. In relation to such matters.
The DPA itself will be drafted by the investigating authority and must then be signed off by a judge. There are two tests which the judge must deem to be satisfied: the DPA must be in the interests of justice, and its terms have to be fair, reasonable and proportionate.
If a DPA is breached, the case will be brought before a court for breach proceedings to be instituted. In accordance with the legislation, the civil standard of proof applies. This means that although a DPA is ostensibly a criminal law matter, a lower burden of proof applies than in criminal cases. The question that is asked is: on the balance of probabilities, has a breach of the DPA taken place?
If DPA use becomes more widespread, the options for remedial action that may be ordered after a breach occurs should become clearer over time.
Each DPA has a set expiry date. When that date has been reached, the prosecutor will make an application to court in order to discontinue the criminal proceedings.
It isn’t just multinationals that need to take note. There is no provision within the law that stipulates that a DPA only applies to companies of a particular size.
An expert solicitor will be able to advise on their content, suitability and implications. If you have any queries relating to DPAs, Ison Harrison’s regulatory law team can help. Please call Amber Walker on 0113 284 5042 for more information or visit www.isonharrison.co.uk. All matters are handled in the strictest confidence.