SFO Signals First DPA Negotiations
Deferred Prosecution Agreements (DPA) have been available for use by the SFO and DPP since their introduction on 24 February 2014; however an agreement has yet to be concluded. In a speech given at the Global Anti-Corruption and Compliance in Mining Conference on 20 May 2015, Joint Head of Bribery and Corruption, Ben Morgan announced that the SFO ¦have issued our first invitation letters giving corporates the opportunity to enter into DPA negotiations . A month later, on 19 June 2015, a group of leading anti-corruption NGO’s in the UK: Transparency International, Corruption Watch and Global Witness wrote a joint letter  to the Director of the SFO, David Green, highlighting key principles for the SFO to address when engaging in DPA negotiations in order to avoid the controversial problems and increasing criticism that DPAs have attracted in the US.DPAs are, in essence, a plea-bargain style arrangement which have been used in the US for over 20 years. Introduced in the UK in Schedule 17 of the Crime and Courts Act 2013, DPAs were intended as a discretionary tool which can be used in cases of fraud, bribery, money laundering and other economic crime. They allow a prosecutor to charge a company with a criminal offence but immediately suspend proceedings and enter negotiations with the company to agree on conditions in order to settle the matter rather than commence a criminal trial. Conditions can include payment of a financial penalty or compensation and agreeing to cooperate with any further investigation or prosecution.
Entering into a DPA could be an attractive alternative for a company who would otherwise face lengthy prosecution which, if convicted, could potentially result in severe reputational damage, an automatic EU public procurement ban and the possibility of winding-up.While some of the principles identified in the letter to David Green are also reflected in the joint Deferred Prosecution Agreement Code of Practice (the Code) for prosecutors published by the SFO and DPP in February 2014, the letter highlights additional issues and in particular, aims to reduce the likelihood of companies involved in wrong-doing going unnoticed and suffering minimal financial damage.
The anti-corruption NGO’s letter emphasises the role of DPAs as a deterrent to committing financial crime, noting that any public perception or deterrent value of DPAs can only be ensured if a company fully admits guilt in a public statement. Additionally, they say any compensation sought by the SFO should reflect the harm of the wrongdoing and any financial penalty sought should reflect the benefits accrued by the company, including commercial advantage and market position achieved as a result of the wrongdoing, to ensure that the resultant financial penalties have a proportionate deterrent element.The letter also focuses on accountability and transparency; noting that DPA approval hearings should be held in open court, and the voice of victims should be properly represented, ideally through Victim and Community Impact Statements.
Additionally, the possible misuse of DPAs was highlighted in the anti-corruption NGO’s letter which explicitly states DPAs that should not be used to help companies avoid EU public procurement debarment or individual prosecution and should not be offered to larger companies purely because they are more difficult and expensive to prosecute. While DPAs have the potential to create a more efficient system of prosecuting financial crime and reduce costs for prosecuting authorities and ultimately the public by avoiding a lengthy criminal court trial, those efficiency and cost advantages must not undermine the core values which underpin our legal system, such as accountability and punishment with appropriate deterrents for those who commit crime, rights and support for victims of crime and transparency of prosecuting authorities and courts. It follows that prosecution in such circumstances should be the norm, with DPAs the exception rather than the rule.
Sarah Cotterill is a Paralegal at Peters & Peters Solicitors LLP and can be contacted at firstname.lastname@example.org.
-  http://www.sfo.gov.uk/about-us/our-views/other-speeches/speeches-2015/ben-morgan-compliance-and-cooperation.aspx
-  http://www.cw-uk.org/wp-content/uploads/2015/06/DPA-letter-to-David-Green-19-June-2015.pdf