DPAs – just sort them out please

Deferred prosecution arrangement guidance hands responsibility for de-bugging over to the courts

David Corker

From next spring there will be a new way of concluding a criminal investigation where a company or partnership is suspected of criminality. A deferred prosecution agreement (DPA) – or, more accurately, a non-prosecution agreement – enables a prosecutor and corporate suspect to agree that no prosecution will ensue provided that the latter agrees to
requirements such as paying away an agreed sum.

The type of suspected offending susceptible to a DPA is not minor, including bribery, fraud and tax evasion. While a DPA is a sanction and a sort of public rebuke, the company is not required to admit wrongdoing and so, as typically with insurers acting for a defendant insured, the action can be settled without admission of liability.

The details of how it is supposed to work are in a prosecutor’s draft code of practice published by the Crown Prosecution Service and SFO. This emphasises that the offer of a DPA is in the gift of the prosecutor – there are no entitlements. While there is guidance as to when one would be suitable, the prosecutor has discretion. Most importantly, the draft
allows a prosecutor to decide to offer a DPA despite only having carried out a rudimentary investigation, or none at all. The threshold is set at a reasonable suspicion plus an expectation that if there was a proper
investigation compelling incriminatory evidence would emerge.

The outcome is that a prosecutor is largely free to decide when to offer a DPA, so inevitably wider policy considerations will fill the vacuum. What are these likely to be? First, whether a self-report should be a condition for qualifying for a DPA as opposed to co-operation only after the prosecutor has become suspicious. The position is unclear. The tenor of SFO pronouncements is that a self-report is a virtual nec-essity for leniency, so expect this to be carried into the DPA arena.

Second, the degree of co-operation required of the company to secure the offer of a DPA is likely to be a consideration. Is it ‘open kimono’ or can the company keep some things close to its chest? This leads to the prickly issue of whether the prosecutor can demand from the company a waiver of its legal privilege (LP) concerning, for example, its lawyers’ records of interviews with potential witnesses. It is notable that when DPAs were first mooted the Government said such waivers would never be demanded and so cut across the Office of Fair Trading’s policy on cartel probes where leniency is sought. This draft omits any reference to LP. So it seems a prosecutor can stipulate that co-operation includes a waiver.

It is evident that the Government is opting for a loosely worded code in the expectation that the courts will fill in the gaps. Remarkably, for a system that has hitherto chewed judges from second-guessing prosecutorial decision-making, in a DPA context the judge must decide whether it is fair and reasonable. This ‘must’ can be understood as a passing of responsibility for resolving problems to the judiciary.