The American Way – DPAs Arrive In The UK

February 2014 marks an important landmark in the UK authorities' ongoing efforts to fight corporate crime, international corruption and bribery. On 24 February 2014, a new Part 12 of the Criminal Procedure Rules will come into force, and the Deferred Prosecution Agreement (DPA) will become available as an additional tool to assist UK prosecutors in tackling a wide range of corporate criminal offences. The basic features of the new DPA regime are set out in our Outline below. Further details on practical implementation are expected when the Director of Public Prosecutions and the Director of the Serious Fraud Office (SFO) publish a Code of Conduct later this year.

The aim of the DPA is to incentivise cooperation from organisations under investigation by offering a negotiated resolution (in the form of a court-sanctioned, written settlement) in order to avoid the potentially catastrophic consequences of a conviction in the criminal courts. In return for compliance, the prosecutor will defer and ultimately discontinue criminal prosecution. The DPA is therefore also intended to allow effective supervision of remedial measures undertaken by the organisation through maintaining the threat of prosecution over a fixed time period.

The DPA is attractive to prosecutors because it offers a quick resolution that avoids the expense and uncertainty of a full criminal trial. The appeal for organisations is clear, as the consequences of a criminal conviction can be fatal to a business. For example, in the European Union, public procurement rules bar an organisation from receiving an EU contract if it has been found guilty of bribery. The debarment regime in the US differs in that it is not designed to punish organisations, but rather to ensure that the US government contracts only with "presently responsible" entities. If offered a DPA, an organisation will be able to make a pragmatic, strategic decision based on the commercial consequences unconstrained by the human stigma of a guilty plea. DPAs will not be available to individuals for reasons of public policy.

The advent of the new DPA regime marks a significant change, in that it introduces a statutory basis and accompanying formal process to govern this type of plea bargaining in England and Wales. The DPA has long been a prominent and extremely effective tool used by the US authorities and is underpinned by a mature process supported by the courts. The results are striking. The US authorities concluded 28 non-prosecution and deferred prosecution agreements in 2013, which resulted in nearly $2.9...

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