The UK gets tougher on corporates committing economic crimes with new deferred prosecution agreements code

The director of the Serious Fraud Office (SFO) and the director of Public Prosecutions in the UK have published a code of practice on the use of deferred prosecution agreements (DPAs).

DPAs will apply to organisations only in cases of economic crime and are agreements reached under judicial supervision between the prosecutor and an organisation.

The agreements allow a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions. DPAs are expected to come into use by prosecutors from 24 February 2014.

SFO director David Green CB QC said: “At present, when a company is convicted of a criminal offence, a court can impose a fine or put it out of business by winding it up. Both these outcomes can cause collateral damage to employees and shareholders who may be blameless.

“DPAs avoid that collateral damage and provide a welcome addition to the prosecutor’s tool kit for use in appropriate circumstances. But DPAs are not a panacea, nor are they a mechanism for a corporate offender to buy itself out of trouble.

“The most important features of the DPA regime outlined in the code are judicial oversight, and unequivocal co-operation from the corporate. Prosecution remains the preferred option for corporate criminality.”

Public Prosecutions director Alison Saunders added: “DPAs provide prosecutors with additional powers in the fight against fraud and economic crime. Although the circumstances appropriate to the use of DPAs may be quite rare for the Crown Prosecution Service, the guidelines published today set out our approach to this new legislative function in an open and transparent way.”

Conditions attached to a DPA may include disgorgement of profits; payment of a fine, compensation for victims and costs; co-operation in any prosecution of individuals; and implementation of a compliance programme, if necessary with a monitor appointed.

The UK government announced plans to introduce DPAs in October 2012. They were introduced in the Crime and Courts Act 2013, which received royal assent in April last year.

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