Deferred Prosecution Agreements

It appears that the UK will accept deferred prosecution agreements as part of the toolkit for dealing with economic crime. Over the course of the summer the UK Ministry of Justice invited commentary by the public on a consultation document [PDF] outlining the nature and use of prosecution agreements. At the end of last month the government reported that:

A total of 75 responses to the consultation were received from a variety of sources including key prosecutors, members of the public, members of the judiciary and legal profession, businesses, academics and regulatory bodies.

There was strong support for the proposals in the consultation, with 86% of respondents agreeing that Deferred Prosecution Agreements (DPAs) have the potential to improve the way that economic crime committed by organisations is dealt with. The responses confirmed that the DPA model is a sensible and pragmatic means of identifying and penalising more corporate offenders.

Deferred prosecution agreements, already in use in the United States, are arrangements by which, in the words of the UK consultation document:

a prosecutor would lay but would not immediately proceed with criminal charges against a company pending successful compliance with tough requirements such as financial penalties, restitution for victims, confiscation of the profits of wrongdoing and measures to prevent future offending.

It is argued that full prosecution is too expensive and too slow to cope with the sophistication and changing nature of corporate wrongdoing. The incentive for a corporation to become a party to a deferred prosecution agreement would, presumably, be the avoidance of negative publicity associated with a long trial and a possible finding of guilt. As well, both the government and the corporation concerned may have an interest in keeping the business afloat for the sake of the economy and those whose livelihood depends on the corporation.

Critics in the US argue that deferred prosecution agreements (and in the US, non-prosecution agreements) take important decisions out of the mainstream justice system, allowing for under-prosecution and deals that avoid disinterested scrutiny and transparency. In the US there is no requirement that DPAs be presented to a judge for approval. The UK proposal, however, envisages a form of judicial oversight of DPAs.

This NYTimes DealBook article and this WSJ article discuss these sorts of agreements and their appropriateness.

I’ve been unable to find any reference in Canadian legal materials to the existence of DPAs or to proposals that they be adopted as a practice here.

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Comments

  1. I read some interesting commentary about these in the US a while back. The gist of it was that US prosecutors have such enormous powers to make your life difficult (with prejudgment attachment, civil forfeiture, etc.) that these become an attractive option.

    To me, there’s something unseemly about it – almost a shakedown. If a cop pulls you over, he or she can’t say “Give me $200 for charity or I’ll seize your car and charge you with impaired driving”.

    In a system where the court process is more punishment than the punishment itself, I can see why they would be attractive.

  2. Some regulatory agencies in Ontario (such as the OSC and the ORC) have long used a similar device when disciplining licensees, but in the form of deferred penalty rather than deferred prosecution. A disciplinary panel may, for example, rule that a person’s license shall be suspended for a specified duration, but also that the penalty is stayed, subject to the licensee fulfilling specified conditions. The ruling might effectively make the stay permanent after a particular period of compliance. Such a ruling may implement a settlement that makes a full-blown hearing unnecessary.