Unprecedented External Scrutiny In Latest UK DPA

• Published date: 06 August 2020
• Subject Matter: Corporate/Commercial Law, Criminal Law, Compliance, Corporate and Company Law, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: McCarthy Tétrault LLP
• Author: Terms Of Trade, Daniel Thomas, Andrew Matheson and John W. Boscariol

On July 17, 2020, Mr. Justice William Davis granted final approval to the UK Serious Fraud Office's ('SFO') eighth Deferred Prosecution Agreement ('DPA').

For companies awaiting the first Canadian DPA under the Remediation Agreement Regime ('RAR'), the DPA agreed between the SFO and G4S Care & Justice Services (UK) Limited ('G4S C&J') represents an important decision as the agreement contains provision for an unprecedented level of external monitoring and scrutiny significantly greater than any DPA previously approved by the UK courts.

We have previously highlighted that the terms of DPAs can include onerous commitments, such as agreeing to extensive monitoring of the organization's activities going forward. In this regard, the G4S C&J DPA represents the most significant encroachment into a company's future through monitoring pursuant to any DPA so far agreed to in the UK. In the United States, independent corporate monitors have become a common feature of DPAs entered into by the Department of Justice and it will be interesting to see whether the G4S C&J DPA represents the start of a trend towards increased US-style intensive monitoring in the UK.

In Canada, corporate monitoring is provided as an option under the RAR, but it is as yet unclear whether frequent use will be made of this part of the legislation. It is important to remember that judicial oversight of DPAs in the UK is also reflected in the Canadian legislation and therefore the role of corporate monitors could be scrutinized by courts in Canada. Mr. Justice Davis restated Lord Justice Leveson's comments in the first UK DPA judgment that the "court retains control of the ultimate outcome": "In contra-distinction to the United States, a critical feature of the statutory scheme in the UK is the requirement that the court examine the proposed agreement in detail, decide whether the statutory conditions are satisfied and, if appropriate, approve the DPA...".¹ Likewise the role of monitoring in Canadian Remediation Agreements may ultimately be defined and developed not only by the prosecutors and companies negotiating such agreements, but also by judges.

The G4S C&J DPA

The G4S C&J DPA is the second UK DPA to emerge from the electronic tagging controversy in the UK (a previous DPA between the SFO and Serco Grafix Ltd ('SGL') was approved by the same judge in 2019).² An investigation was opened by the SFO into the practices of G4S C&J in November 2013 following a referral by the Justice Minister after a departmental review found that the company had overcharged for electronically tracking the movements of individuals originally on bail or subject to home detention curfew who had subsequently moved abroad, returned to prison, or died. The company subsequently reported to the SFO that it had discovered material which indicated that it had failed to provide accurate financial reports to the Ministry of Justice ("MoJ") in respect of certain electronic monitoring services...