Yesterday the Director of the SFO and the Director of Public Prosecutions (DPP) published a draft Code of Practice for the use of Deferred Prosecution Agreements (DPAs). DPAs were enacted as a prosecutorial tool in the Crime and Courts Act 2013 which received Royal Assent in April this year.
Vivian Robinson QC blogged on DPAs at BriberyLibrary here on 1 May 2013.
To recap, a DPA involves a company reaching an agreement with a prosecutor where the company is charged with a criminal offence but proceedings are automatically suspended. The company agrees to a number of conditions which may include the payment of a financial penalty, payment of compensation and cooperation with future prosecutions of individuals. Of course, if the conditions are not honoured by the company, the prosecution may later be pursued.
The publication of the draft Code of Practice jointly by the Director of the Serious Fraud Office and the Director of Public Prosecutions also involves a consultation period in which the Directors seek views on eight points covered in the draft Code. Comments have been requested from any interested individuals and organisations. The consultation closes on Friday 20 September 2013. The consultation document is linked through the SFO's web page here.
Since David Green QC became director of the SFO in April 2012, his public statements have made it very clear that he does intend to prosecute wherever possible and that he is much less likely to enter into “settlements” with defendants than his predecessor, Richard Alderman. Nevertheless, DPAs will give the director the choice to avoid a prosecution in certain circumstances as set out in the draft Code of Conduct published yesterday.
Notably, one reason suggested in the draft Code for the prosecution not entering into a DPA would be where a company had delayed in bringing the illegal conduct to the attention of the prosecuting authority. Some legal commentators have already been reported as saying that they believe that companies discovering corruption might already be opting against self reporting their findings to the authorities for fear of prosecution, due to the new director’s hardened stance. We should add that that hasn't been our experience.
If this were the case, however, those directors making such decisions would be ignoring the very considerable risk that someone either within their organisation (or indeed outside it) who was aware of the illegal conduct would at some point in the future act as a whistleblower, bringing the illegality to the attention of the SFO and other prosecutors. Upon investigation the SFO would discover that the current management, who might otherwise have been untainted by the illegal conduct, had sought to cover it up thereby tainting their administration of the company after the event, and setting themselves up for a much tougher prosecution, with the likelihood of any DPA being unavailable due to their not having self-reported earlier.
Naturally, if the illegal conduct continued after being discovered by the company’s management, and it turned a blind eye to it, then directors or senior officers of the company would themselves become liable under section 14 of the Bribery Act, in their personal capacity.