Deal Or No Deal – Anticipating The First DPA/Remediation Agreement In Canada

In the wake of the SNC-Lavalin affair Canada awaits its inaugural Remediation Agreement ("RA"), more commonly known as Deferred Prosecution Agreements ("DPA") in other jurisdictions.

On February 19, 2015, three SNC-Lavalin entities were each charged with one count of fraud under the Criminal Code and one count of bribery under the Corruption of Foreign Public Officials Act ("CFPOA"). Although the RA regime came into force in September of 2018, the Canadian government did not invite SNC-Lavalin to enter into negotiations for a DPA.

The prosecutor at the heart of the decision not to offer SNC-Lavalin a DPA, the Director of the Public Prosecution Service ("DPP"), Kathleen Roussel, discussed RAs in an interview with The Globe & Mail published on February 28, 2020.1 Her comments supplement the formal guidance on RAs that was issued by the DPP on January 23, 2020.2

The Criteria

Canada's RA regime is set out in Part XXII.1 of the Criminal Code and may apply in respect of the bribery and accounting offences under the CFPOA and 30 other offences from the Criminal Code. In the guidance issued in January of this year - section 3.21 of the Public Prosecution Service of Canada Deskbook ("RA Guideline") - the DPP restates the conditions that must exist before an RA can be considered, including that the threshold of a reasonable prospect of conviction must be met.

The RA Guideline further states that the discretion to negotiate an RA will be exercised only where it is in the public interest to proceed in this way, rather than with a prosecution.

The RA Guideline notes that the list of public interest factors, while mandatory, must be considered on a case-specific basis, and the weight to be given to any particular factor will depend on the circumstances of the given case. This affords prosecutors considerable discretion.

As we have previously noted,3 there are aspects of Canada's RA regime that could be problematic for a corporation, depending on prosecutor's position in a given case. Notably, the Criminal Code requires that an RA include an indication of the obligation of the company to cooperate in any investigation, prosecution or other proceeding in Canada, or elsewhere if the prosecutor considers it appropriate. A Canadian prosecutor's ability to insist, as a condition of an RA, that a corporation cooperates with foreign authorities might disincentive self-reporting or destabilize negotiations over an RA, depending on the circumstances.

At paragraph 3 of Guideline 3.21, the DPP makes it clear that, in order to assess whether the threshold of a reasonable prospect of conviction has been met, a full law enforcement investigation must be...