Deferred Prosecution Agreements

Deferred Prosecution Agreements have been covered by a sizeable number of firms for example all of these hyperlinks link to some summary or another. The scheme itself is relatively straightforward. A DPA is a negotiated agreement whereby a company agrees to abide by punitive terms in return for the suspension (and ultimate termination) of criminal proceedings. There is no criminal conviction. The terms will generally include a fine, set at a level “broadly comparable” to that on a guilty plea. They are now available to prosecutors, and there is Code of guidance for them.  

There are two things that I am interested in. One is a practitioner’s concern, the other very much an academic one.

Practically speaking, the issue of “privilege” is not well dealt with in the Code.  (Privilege is the (fundamental) right, in the legal proceedings, not to divulge certain information, usually and especially communications with lawyers.) The Code only says that the law on privilege is unchanged. However, the Director of the Serious Fraud Office has said publically (and erroneously) that “The Code… lists factors which militate… towards a DPA. These include… a waiver of privilege”. Such a factor is decidedly not listed in the Code, and it is worrying to expect corporates to waive privilege. Particularly as corporates will be worried about what happens to the privileged material if and when DPA negotiations break down.

But my real interest is how DPAs play into the differential treatment of corporates and individuals. DPAs are a negotiable way out of criminal proceedings. If companies are allowed them, why not individuals? In fact, why are corporates allowed them at all? Is it a good thing that companies can get them, or are the authorities, as the esteemed FCPA professor blog puts it, really just saying that it is too hard to prove criminal conduct, they cannot be bothered, and they’ll satisfy themselves with a quasi-criminal compromise?

Moreover, the DPA scheme looks to use corporate DPAs as a tool to secure individuals’ convictions. Once a DPA is agreed with a corporate, the prosecutor can merrily prosecute the executives involved. There may be a moral basis for this, but it is not explained or codified. The best explanation, I think, would be the idea that criminal bad behaviour really only makes sense from an individualistic point of view. People do bad things; companies only do bad things when their people do bad things. Those people are the correct objects of scorn. But that can only take us so far, because if it is true, why bother with DPAs at all? Ought we then just have the companies cooperate with the punishment of the individuals?