Business Crime Newsflash

The Ministry of Justice has today published a consultation into Deferred Prosecution Agreements ("DPAs").

Under DPAs businesses could avoid potential criminal prosecution by agreeing to admit wrongdoing, and meeting conditions such as submitting to regular review and monitoring, payment of penalties, and undertaking internal reform.

Such agreements have been used in the US to settle criminal claims against businesses for many years, particularly in the field of anti-corruption enforcement. By entering into DPAs businesses can avoid the stigma associated with a criminal conviction and the associated adverse publicity.

The proposed UK style DPAs would be overseen by a judge, and the threat of full prosecution would be deferred indefinitely provided the conditions were met.

In launching the Consultation today Solicitor General Edward Garnier QC said:

'If we can encourage companies to self-report and come clean, pay penalties and mend their ways, the time and expense of investigations and prosecutions will be better spent elsewhere, enabling us to bring more individuals and companies to justice.'

'An important aim of any DPA system would be to allow investigators and prosecutors to focus resources on those cases where a prosecution is in the public interest - and there will always be some where it is the only option.'

Commentary

In recent years the criminal jurisdiction has increasingly moved into the business world.  The high profile introduction of the UK Bribery Act last year has accelerated that trend.  The Bribery Act raises the prospect of businesses being criminally liable for bribery which they do not know about and over which they have little practical control.

At the same time the UK's Serious Fraud Office has attempted to develop a carrot and stick approach to enforcement - offering the prospect of leniency to those who self report through the imposition of civil rather than criminal penalties.  Unfortunately this approach had no legislative mandate, and was sharply criticised by the Courts.

The announcement today should be welcomed by businesses.  If formal DPAs are introduced they will offer businesses the ability to manage outcomes and achieve a greater degree of certainty for their stakeholders if faced with potential criminal prosecution.

The consultation is open until 9 August 2012.  We believe that it is important that DPAs are developed in a format which provides businesses with the maximum scope for certainty when faced with potential criminal proceedings.  We will be seeking your views in the coming weeks, and will submit them in consultation process. Please click here to access the Consultation.

We are also holding a seminar at our London offices on 27 June at which DPAs will be considered.  An invitation will follow.

For further information please contact Tony Lewis, Partner, Alexandra Underwood, Partner at Field Fisher Waterhouse LLP.