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The Lawyer | 24 June 2013
CRIME
DPAs: at what price?
Are deferred
prosecution
agreements
justified on cost
savings alone?
Christopher Sallon QC (top)
and Nichola Higgins are
barristers at Doughty
Street Chambers
Some UK observers have regarded the US approach
to corporate crime with a mixture of disdain and
envy. Disdain because relatively unsupervised
out-of-court deals and plea bargains somehow
smack of impropriety and unfair pressure – the
unseemly intrusion of the marketplace into our
fastidious court system. Envy because of the large
sums of disgorged profits that have swollen state
coffers from ‘deferred prosecution agreements’
(DPAs).
No doubt attracted by the huge sums which can be
saved by avoiding contested trials, the Government
perceives practical advantages in the cheap and
swift resolution of financial crime, and so has
decided to import this prosecuting tool from across
the pond, albeit adapted for use in the UK. This is no
surprise given these austere times, the prohibitive
cost of prosecuting financial crime and the limited
incentive for companies to self-report given that
plea agreements provide no certainty of outcome.
Against this background, Schedule 17 of the Crime
and Courts Act 2013 has now been enacted. It
introduces a framework for DPAs in the UK. Unlike its
US cousin, the UK version requires active judicial
consideration and approval of each DPA at every
stage. Furthermore, fines and the confiscation of
profit will not go straight to the prosecuting agency
but rather to the Government’s consolidated fund.
The introduction of DPAs appears to be part of a
wider trend of what has been called ‘the
Americanisation’ of the UK’s corporate crime laws.
This is not the first time that US practice has been
adapted for use in the UK. Plea agreements were
introduced in 2009 but with mixed success, partly
because they could not bind the court when passing
sentence. Lord Justice Thomas made this clear when
sentencing Innospec Ltd in March 2010, after
considering a deal reached between the company,
the Serious Fraud Office (SFO) and the US
Department of Justice.
DPAs have been generally welcomed as a practical
alternative to the cumbersome trial process, but not
in all quarters. The new director of the SFO, for
instance, has announced a greater emphasis on the
role of the SFO as a prosecuting body rather than as
a mediator between the alleged offender and the
courts. Guidance on self-reporting, which previously
suggested that it was likely to lead to a decision not
to prosecute, now says it is merely one factor to be
considered. If out-of-court disposals are considered
useful but less attractive options for a body such as
the SFO, then it should not be assumed that DPAs
will become the norm.
While we await the imminent publication of the
joint Code of Practice and a revision of the Criminal
Procedure Rules early in the New Year, a pause
before DPAs are entered into may be no bad thing.
Their introduction raises some difficult legal and
ethical questions, not least that treating corporate
entities that have committed offences differently
from individuals can only be justified on grounds of
practicality.
Arguably, the case for cost and convenience is not
sufficiently strong to set aside so easily the principle
of equality before the law. If there is a reasonable
prospect of conviction, why should a company be
permitted to negotiate a settlement and avoid a
conviction for serious offences in circumstances
where an individual could not? Is it right that such
companies should continue to be eligible for public
tenders? If we do not make a public example of those
companies which do wrong or turn a blind eye to
wrong being done, what incentive is there for other
companies to create and enforce a culture of ethical
business? Disappointingly, there was little, if any,
consideration by Parliament of the inconsistencies
of such an approach or the precedents which could
be set.
Government policy, in response to the current
financial crisis, has placed greater weight on cost
than it has on principle, and perhaps this is the
underlying motive for the introduction of DPAs. This
unhappy theme is nowhere better reflected than in
recent proposals to privatise the courts and to
introduce price competitive tendering into the legal
aid market. The resulting removal of the right of the
client to choose their legal representative
epitomises the sacrifice of a fundamental right to
achieve the cheaper delivery of legal aid services.
Time will tell if DPAs offend the wider issues of
justice or whether the anticipated regulatory
framework, coupled with the application of judicial
oversight, will overcome such problems. A criminal
justice system re-modelled and effectively justified
on grounds of cost alone carries real risks. In the
pursuit of a pragmatic approach to corporate
offending, the Ministry of Justice needs to take care
that the principles that underpin our criminal justice
system do not become the victims.
54 Doughty Street
London, WC1N 2LS
Tel: 020 7404 1313
Fax: 020 7404 2283/84
Email: [email protected]
Web: www.doughtystreet.co.uk
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