Deferred Prosecution Agreements (“DPA”) are available to UK prosecutors from 24 February 2014.

On 14 February 2014 the UK’s Serious Fraud Office (“the SFO”) published its response (“the Response”) to the public consultation on the Deferred Prosecution Agreement Code of Practice for prosecutors (“the Code”), together with an updated, final Code. The Response sets out limited amendments to the draft Code circulated last year, together with commentary and clarification on certain issues, and confirmed the date on which DPAs become available.

Key features of the Response include:


  • Prosecutors must be satisfied and record that the evidential stage of the Full Code Test in the Code for Crown Prosecutors is satisfied or, if this is not met, that there is at least a reasonable suspicion based upon some admissible evidence that the organisation (“P”) has committed the offence, and there are reasonable grounds for believing that a continued investigation would provide further admissible evidence within a reasonable period of time, so that all the evidence together would be capable of establishing a realistic prospect of conviction in accordance with the Full Code Test.
  • There will be cases where the public interest decision not to offer a DPA but to prosecute is quite clear.
  • The Code suggests that DPAs are to be used in only limited circumstances. However the SFO did not agree with a proposal that DPAs should only be offered in “exceptional” circumstances.

Public interest factors

  • A public interest factor in favour of prosecution includes the absence of a corporate compliance programme, an ineffective corporate compliance programme and failure to demonstrate a significant improvement in a compliance programme since the time of the offending.
  • Reporting the wrongdoing but failing to verify it, or reporting it knowing or believing it to be inaccurate, misleading or incomplete” will amount to a factor in favour of prosecution.
  • The Code now clarifies the aspects of change within P which will be considered as public interest factors against prosecution. The Code now provides as a factor: “The offending is not recent and P in its current form is effectively a different entity from that which committed the offences – for example it has been taken over by another organisation, it no longer operates in the relevant industry or market, P’s management team has completely changed, disciplinary action has been taken against all of the culpable individuals, including dismissal where appropriate, or corporate structures or processes have been changed to minimise the risk of a repetition of offending.”


  • The SFO has amended the Code to distinguish those terms which are mandatory under the Act from those which will normally be included, and has suggested other possible terms which may be included where appropriate.
  • The terms “must” set out clearly the measures with which P must comply, be proportionate to the offence and tailored to the specific facts of the case and specify the end date.
  • The following will normally be terms of a DPA: a financial order; the payment of the reasonable costs of the prosecutor; co-operation with an investigation related to the alleged offence(s).
  • Other terms that may be agreed might include: prohibiting the organisation from engaging in certain activities; financial reporting obligations; putting in place a robust compliance and/or monitoring programme; co-operation with sector wide investigations.
  • A company will ordinarily have seven days from the date of the final hearing to pay.
  • No “standard” length of a DPA is given. Its duration will need to be sufficient to be capable of permitting compliance with other terms such as financial penalties paid in instalments, monitoring, co-operation with investigations, and trials of individuals.


  • A monitor will only be appointed where there is agreement between the parties and the court is satisfied that the appointment meets the statutory test. The terms will be fact specific.
  • The monitor will be responsible for advising P of necessary compliance improvements as well as for reporting an organisation’s compliance with the terms of the DPA. As such, the monitor will need to report to P.
  • The SFO is disinclined to be prescriptive about the length of a monitorship. The period will be fact specific.
  • Where the terms require a monitor to be appointed it is the responsibility of the organisation to pay all the costs of the selection, appointment and remuneration of the monitor, and the reasonable costs of the prosecutor associated with the monitorship during the monitoring period.
  • Before the DPA is approved, the monitor will be selected and provisionally appointed, the terms of the monitorship agreed by the parties to the DPA, and a detailed work plan for the remainder of the monitoring period agreed with the monitor including provisions or limits as to costs. The monitor’s report should include a breakdown of his proposed costs, and on what matters costs are incurred

Fines and sanctions

  • The extent of the discretion available when considering a financial penalty is broad. The discount for a guilty plea is applied by the sentencing court after it has taken into account all relevant considerations, including any assistance given by P.
  • The Sentencing Council for England & Wales has issued guidelines on sentencing of corporates for bribery, fraud and money laundering offences. The parties will negotiate a penalty where appropriate by reference to existing guidelines and case law. It will be for the court to then determine whether the proposal is “broadly comparable” to the fine that would be imposed after a guilty plea.
  • In addition to a financial penalty, P may be subject to other financial orders including disgorgement of profits.
  • It is an important aspect of the DPA process that the negotiations take place in private but enter into the public domain at the appropriate time when agreement has been reached.
  • As with entering a guilty plea in a prosecution, P should only conclude a DPA when it is satisfied that issues of concurrent jurisdiction have been resolved to its satisfaction. The Code outlines that a prosecutor must address issues such concurrent jurisdiction when explaining to the court why a DPA is in the “interests of justice” and “fair, reasonable and proportionate”.


The recent track record of UK prosecuting authorities in bringing effective prosecutions against corporates for complex economic crime remains chequered. The SFO, in particular, will hope that the addition of DPAs to its armoury represents a significant step in its efforts to combat corporate crime. That said, nothing in the DPA scheme circumvents the evidential requirements for establishing corporate liability. This test has limited the SFO’s success in the past, and corporates will still be able to benefit from the protections those requirements afford them.

Full prosecution against corporates, and the mechanism to agree to civil settlements through Civil Recovery Orders, remain options available to the UK prosecuting authorities. The Code states that “The SFO and the CPS are first and foremost prosecutors”. It will be interesting to see whether the addition of a new mechanism will expand the number of potential opportunities for the SFO to show its teeth in combatting economic crime; or whether similar numbers of cases will be dealt with, albeit in a greater variety of ways.

The Response indicates that co-operation and agreement between the prosecutor and the organisation is “fundamental”. It remains to be seen how much room for manoeuvre corporates will enjoy in negotiations in practice. Certainly, corporates should be pro-active in seeking to achieve tailored agreements; and should remember that they are under no obligation to enter negotiations or to accept a DPA.

The imposition of compliance monitors is a key, but not compulsory, element of the DPA framework. Importantly, the Code provides for a degree of transparency in relation to the terms of the monitorship, including detailed work plans and any agreement as to limitation of costs. The challenge for corporates will be identifying and agreeing to the most suitable and independent monitor, limiting disruption and controlling costs.

While the Code now confirms that “the Act does not, and this DPA Code cannot, alter the law on legal professional privilege”, the UK authorities may still seek to obtain a waiver of privilege under the theme of co-operation. In the US, pressure to receive credit for “cooperating” with government regulators often pushes corporations to effectively waive privilege in the context of DPAs. However, recent judicial commentary suggests that judges in the US may be willing to exercise their supervisory authority where necessary to protect the privilege of corporations subject to a DPA. It will be interesting to see whether the UK courts adopt a similar policy.

Significantly, there is no additional guidance in relation to the impact of entry into a DPA on proceedings outside of the UK. From the perspective of the regulatory environment in South East Asia, for example, various jurisdictions across the region either do not recognise the concept of corporate criminal liability or have a difficult evidential burden to discharge in seeking to establish such liability. In entering into any DPAs with the SFO, corporates should consider the potential sharing of information between regulators across numerous jurisdictions and the need for a structured and transparent framework in seeking to achieve settlements. Corporates should adopt a co-ordinated global approach to multi-jurisdictional settlements.