Deferred Prosecution Agreements
24 Jan 2023
United Kingdom
5 min read
Deferred prosecution agreements (DPAs) became available as a tool for UK prosecutors on 24 February 2014, in relation to economic offences committed by corporates. They enable a prosecutor to reach an agreement with a defendant (sanctioned by the court) under which the defendant will avoid a criminal conviction by agreeing to certain terms and consequences (designed to reflect the level of wrongdoing covered by the DPA) and complying with those terms during the life of the agreement, which may be for a number of years. They are only available where the prosecuting authority invites the defendant to negotiate such an agreement and that will only be when the prosecutor considers that it would serve the public interest to conclude such an agreement rather than prosecute.
Key points to note about DPAs are:
| Scope | DPAs are only available in relation to economic crime offences committed by corporates, such as bribery, fraud and money laundering, regardless when those offences were committed (so long as criminal proceedings have not already commenced on or before 24 February 2014). |
| Code of Practice | The Directors of Public Prosecutions and the SFO issued guidance in the form of a DPA Code of Practice setting out circumstances in which a prosecutor may consider entering into a DPA, the principles applying to their decision and any factors that may indicate a DPA is unsuitable. The code is available here. |
| Preliminary hearing | Any decision to enter into a DPA must be approved by either the Director of Public Prosecutions or the Director of the SFO. There will then be a private preliminary hearing, where a judge will review whether the prosecutor’s preliminary decision to enter into a DPA is “in the interests of justice” and whether the emerging terms are “fair, reasonable and proportionate”. Only where the judge approves the preliminary decision may the process continue. |
| Contents of the DPA | All DPAs will include an agreed statement of facts and an expiry date. It is not necessary for the statement of facts to include admissions by the defendant, but the statement must be such that the judge approving the DPA is satisfied that the DPA captures all relevant offending and that its terms are proportionate to that offending. In relation to the sorts of terms that may be included in the DPA, schedule 17 does not provide an exhaustive list, but instead provides example terms to assist the parties and judges in making their decisions relating to DPAs, acknowledging that each case (and what terms will be appropriate) will turn on its own facts. Note that the terms may include penalties that could not otherwise be imposed by a court (e.g. the appointment of a monitor). |
| Financial penalty | The terms of the DPA will usually require the defendant to pay a financial penalty. Schedule 17 states that any financial penalty is to be broadly comparable to a fine that the court would have imposed upon the defendant following a guilty plea. According to the Code of Practice, this is intended to enable the parties and courts to have regard to relevant pre-existing sentencing principles and guidelines in order to determine the appropriate level for a financial penalty in an individual case. This should include consideration of the defendant’s means and, where compensation is appropriate, this should be given priority over a penalty. |
| Use of documents | In the event that negotiations do not result in a DPA being agreed, the prosecutor may use as evidence in a subsequent prosecution any pre-existing contemporaneous documents provided during the negotiations and/or any investigation report, interview notes or witness statements disclosed to the prosecutor prior to the prosecutor commencing DPA negotiations with the defendant. The position is different where reports or notes are provided once negotiations have begun; however, implicit in the Code of Practice is that defendants would be expected to provide such materials as a precursor to being invited by a prosecutor to enter into DPA negotiations. |
| Judicial approval of the final DPA | Once agreed between the parties, the final terms of the DPA will be set out before a judge, in private, so that any remaining issues can be resolved. Once resolved, the judge will approve the DPA in open court. |
| Publicly available information | Once approved, the prosecutor will publish the final DPA and agreed statement of facts. Upon expiry of the DPA, the prosecutor will publish details of how the terms were complied with. In the event the DPA is breached, varied or terminated, the prosecutor will publish details of the relevant facts and approach taken. However, in some cases elements of these documents will be redacted, or withheld for so long as necessary to avoid prejudicing any prosecution of others connected to the same wrongdoing, i.e. individuals. |
| Breach of the DPA | In the event of a breach, the prosecutor has discretion to apply to the court to terminate the DPA. The DPA may contain terms which provide penalties for minor breaches of its terms in specific circumstances. This may apply, for example, to late compliance with terms, where a specified financial penalty may be imposed. |
| Impact on individuals | DPAs are only available to corporates. The Code of Practice and the SFO have made clear that they will expect the defendant corporate to assist them in gathering evidence against individuals involved in the wrongdoing, including employees and executives of the corporate. Therefore, while the corporate itself may benefit from the DPA process, it will need to bear in mind that its co-operation and any admissions may ultimately result in prosecution of its staff. |
