Take Two: Canada's Second Court-Approved Remediation Agreement

• Published date: 07 July 2023
• Subject Matter: Litigation, Mediation & Arbitration, Criminal Law, Compliance, Trials & Appeals & Compensation, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: McMillan LLP
• Author: Mr Guy Pinsonnault, Jamieson Virgin and Courtney Aucoin (Summer Law Student)

The Superior Court of Quebec ("Court") recently published its judgment relating to the approval of a remediation agreement between the Public Prosecution Service of Canada ("PPSC") and Ultra Forensic Technology Inc. ("UEFTI"). UEFTI is the second Canadian company to receive such approval since the legislative framework for remediation agreements came into effect in 2018.

Known as Deferred Prosecution Agreements in the United States, the United Kingdom, and other jurisdictions, remediation agreements in Canada are prosecutorial tools available for combatting economic crimes. They are legal contracts between prosecutors and offending parties whereby charges are laid, stayed, and subsequently dropped if the terms of the agreement are met.

This publication will summarize the most recent decision made by the Quebec Court and highlight notable advancements in the law pertaining to review and approval of remediation agreements in Canada. Following the SNC-Lavalin decision in 2022, the UEFTI judgement further clarifies the remediation agreement approval process for organizations charged with offences such as fraud, bribery, and anti-competitive behaviour.¹

Key Takeaways: Clarifying the Approval Process for Future Remediation Agreements

Taken together, the SNC-Lavalin and UEFTI decisions provide 4 emerging themes that will likely be applied in the future by the courts when approving remediation agreements:

• The open court principle applies unless the Court decides that it is in the interest of public morals, the maintenance of administration of justice or is necessary to prevent injury to international relations, national defence, or national security to have the process in camera.
• The 'Public Interest' requirement will be examined in the same manner by which public prosecutors will decide to enter into negotiations with an accused and with consideration for broader contextual factors (see below).
• There is no room for interveners and their submissions in the assessment of the merits of approving a remediation agreement.
• The measure of deference rests on the joint submissions made between the accused and PPSC unless it would hinder the administration of justice or be contrary to the public interest.

Background: The Road to UEFTI's Remediation Agreement

UEFTI is a Canadian company that owns a ballistics recognition system used by law enforcement agencies both in Canada and globally. Between 2006 and 2018, UEFTI developed commercial relations with the Philippine National Police ("PNP") that ultimately led to UEFTI securing a procurement contract with the PNP. However, it later emerged that the relationship involved the payment of various bribes to government officials and falsification of official records to conceal the bribes. It is reported that sales to PNP during the period amounted to $17 million CAD and that an additional $4.4 million CAD in commissions were paid to local intermediaries to help facilitate the purchases.

Following an investigation by the Royal Canadian Mounted Police, UEFTI was charged on two counts for bribing officials of the Republic of Philippines under s. 3 of...