UK deferred prosecution agreements explained

The legal basis

Schedule 17 of the Crime and Courts Act 2013 created DPAs in England and Wales ². The Serious Fraud Office says entry into DPAs became possible on 24 February 2014, when Schedule 17 came into force ¹. The SFO describes a DPA as "a Court approved agreement" between a company and a prosecutor at the Crown Prosecution Service or the SFO ¹.

The designated prosecutors are the Director of Public Prosecutions, the Director of the Serious Fraud Office and any prosecutor designated by the Secretary of State by order ². The other party to a DPA may be a body corporate, a partnership or an unincorporated association, and "may not be an individual" ².

The prosecutor's test

The DPA Code of Practice, issued by the Director of Public Prosecutions and the Director of the SFO under Schedule 17, sets a two-stage test ⁴. The evidential stage is met where the Full Code Test evidential stage is met, or where there is reasonable suspicion based on admissible evidence and reasonable grounds to expect more within a reasonable time ⁴. At the public interest stage, the prosecutor asks whether "the public interest would be properly served by the prosecutor not prosecuting but instead entering into a DPA" ⁴.

The Code says "P has no right to be invited to negotiate a DPA" and that an invitation "is not a guarantee that a DPA will be offered" ⁴. Factors against prosecution include co-operation, the absence of prior history and an existing compliance programme ⁴. Factors in favour include prior similar conduct and failure to report wrongdoing within a reasonable time ⁴.

What a DPA contains

A DPA must contain a statement of facts and an expiry date ². Its requirements may include the following, and the statute says the list includes but is not limited to these ².

• Paying a financial penalty, broadly comparable to the fine a court would impose after a guilty plea ².
• Compensating victims, donating to charity, or giving up profits ².
• Putting in place or improving a compliance programme, and cooperating with investigations ².
• Paying the prosecutor's reasonable costs ².
• Accepting a monitor. The Code of Practice says monitors should be approached with care and used only where fair, reasonable and proportionate ⁴.

Court approval, breach and expiry

Before terms are agreed, the prosecutor seeks a preliminary declaration, in private, that a DPA is likely to be in the interests of justice and its proposed terms fair, reasonable and proportionate ². After terms are agreed, the court must make a final declaration on the same tests and give reasons ². The declaration must be made in open court ². Once proceedings begin in the Crown Court, they are automatically suspended ².

If the prosecutor believes the organisation has breached the DPA, it may apply to the Crown Court, which decides on the balance of probabilities ². The court may invite agreed remedies or terminate the DPA ². If the DPA runs to expiry, the prosecutor gives notice to discontinue the proceedings ². The prosecutor must publish the DPA and related decisions, subject to postponement to avoid prejudice to the administration of justice ².

Admissions and the first DPA

Once a DPA is approved, its statement of facts is treated as a formal admission by the organisation in later criminal proceedings for the offence ². The Code of Practice says formal admissions of guilt are not required, but the organisation must admit the contents and meaning of key documents ⁴.

The first DPA was approved on 30 November 2015 by Sir Brian Leveson, President of the Queen's Bench Division, in Serious Fraud Office v Standard Bank Plc ³. The judgment calls it "the first example of a DPA in this country" ³. The indictment charged failure to prevent bribery under section 7 of the Bribery Act 2010 ³.