With the adoption of the Crime and Courts Act 2013 (“the Act”) on April 25, 2013,1 the Deferred Prosecution Agreement (“DPA”) is now on the UK statute book. Once the Code on DPAs has been issued by the Directors of Public Prosecutions and the Serious Fraud Office (“SFO”), UK prosecutors will have a new and flexible procedure to deal with corporate economic and financial offending to fill the gap between civil enforcement and criminal prosecution. This article briefly sets out the background to the DPA’s adoption, outlines the procedure and substance of this new instrument, and provides some comparative analysis with the equivalent procedure in the United States.


Policy background

The last decade or so has witnessed an on-going effort to make English white collar crime enforcement more effective. In 2002, the Law Commission published its report recommending the introduction of a general offence of fraud which led to the Fraud Act 2006.2 In 2005, then Attorney General Lord Goldsmith QC established the interdepartmental review of arrangements for the detection, investigation and prosecution of fraud which produced its final report in July 2006. Among its implemented recommendations is the Attorney General’s Guidelines on plea discussions in cases of serious or complex fraud published in March 2009. More recent reforms seeking specifically to target corporate offending include the Bribery Act 2010 and, to a lesser extent, the recent removal of the dishonesty requirement for the cartel offence in the Enterprise Act 2002.3

Despite these efforts, the recent history of UK white collar crime enforcement is one of mixed fortunes. Reciting the oft-quoted statistic that “fraud committed by all types of offenders costs the United Kingdom £73 billion per year,”4 the UK Ministry of Justice (“MoJ”) consultation paper on DPAs from May 2012 posited that “despite years of good intentions and some high profile cases, previous attempts to prosecute economic crime have been only intermittently successful.”5

So it was against a background of grave concerns about the ability of UK authorities to investigate and prosecute corporate fraud6 that discussions began on how UK criminal procedure could be better adapted to dealing with the complex issues involved in offending by large corporate entities. One of the difficulties identified was the law of England and Wales on corporate criminal liability which the present government believes “does not reflect the 21st century commercial organisation.”7 The substantive difficulty singled out is the requirement that a corporate can be held criminally liable only if a “directing mind and will,” in practice a board level executive or equivalent, can be shown to have had the requisite mens rea for the offence.8 From a procedural perspective, with increasing international collaboration between prosecutors on large corporate investigations and prosecutions, it became increasingly obvious that UK prosecutors “have a relatively narrow range of tools available to identify and bring corporate offenders to justice,”9 particularly compared to their US colleagues. This came into sharp relief in R v. Innospec Limited, in which the Serious Fraud Office sought to co-ordinate a global plea-bargain with the US Department of Justice, the Securities and Exchange Commission and the Office of Foreign Asset Control, and suffered such withering criticism from the judge in that case (Thomas LJ) as to guarantee no further such attempts in the absence of legislative change.10 However, prior to the Innospec ruling, the SFO had entered into a “plea agreement” with a director responsible for corruption in relation to medical supplies in Greece. At the sentencing appeal, the Lord Chief Justice stated in no uncertain terms: “In this jurisdiction a plea agreement or bargain between the prosecution and the defence in which they agree what the sentence should be, or present what is in effect an agreed package for the court’s acquiescence is contrary to principle.” 11

Comparing the UK system with the comparative effectiveness of US prosecutors,12 the government clearly hopes that, with the recent adoption of the Act and its institution of DPAs, white collar crime enforcement in the UK will be much more effective in dealing with large, often multinational, corporate offenders.

Business community reaction

In the Consultation Paper, the MoJ stated that “the prosecutor at present has little to offer the commercial organisation by way of encouragement to engage, cooperate or plead. The organisation has no real incentive of its own to resolve issues with the prosecutor, particularly as there will be significant uncertainty over where the process will lead.”13 Among the respondents to the consultation were representative organisations for business, some individual corporations as well as major accountancy and law firms.14 The group of respondents as a whole was broadly, not to say overwhelmingly, supportive of the principles behind the government’s plans15 but also, albeit to a somewhat lesser degree, of the government’s proposed approach which is now enshrined in law.

Despite the potentially significant change that the DPA brings to the white collar crime landscape, the reaction was muted when the Act received the Royal Assent on April 25, 2013 putting the DPA on the UK statute book. In a perhaps telling misunderstanding, the Financial Times reported the event with the headline: “Bill to introduce US-style plea bargains receives royal assent.”16

Nature of the DPA

The Act defines a DPA as “an agreement between a designated prosecutor and a person [‘the defendant’] whom the prosecutor is considering prosecuting for an offence specified in Part 2” under which “[the defendant] agrees to comply with the requirements imposed on [the defendant] by the agreement” and “the prosecutor agrees that, upon approval of the DPA by the court …[the provisions of this Schedule are] to apply in relation to the prosecution of [the defendant] for the alleged offence.”17

DPAs will be brought into force by Ministerial Order18 once the Directors of Public Prosecutions and the Serious Fraud Office have drafted the Code on DPAs,19 expected either late this year or early 2014.

Offences concerned

DPAs will be available for the common law offences of conspiracy to defraud and cheating the public revenue as well as a range of statutory offences falling within the broad category of economic and financial crimes.20 Of note is that despite significant support for DPAs to cover non-economic offences (environmental, health and safety, etc.),21 the Act specifies that the range of offences covered by DPAs may only be extended to further “financial or economic crime.”22

Also, of note is that DPAs will be available for “conduct occurring before the commencement of this Schedule as if an offence specified in this Part included any corresponding offence under the law in force at the time of the conduct.”23 That means, for example, that it is intended that DPAs should be available for acts of bribery carried out before the 1st July 2011 and constituting offences under the Public Bodies Corrupt Practices Act 1889 and the Prevention of Corruption Act 1906 (as the statutory predecessors of the Bribery Act 2010 which is explicitly covered).

Parties to a DPA

Suspects able to enter DPAs are bodies corporate, partnerships and unincorporated associations. Unlike in the US, individuals are expressly excluded from the DPA regime.24

Prosecutors able to enter into DPAs are the Director of Public Prosecutions and the Director of the SFO.25 Of note is that, subject to a very narrow exception, a designated prosecutor must “exercise personally the power to enter into a DPA.”26 The legislative intention is clearly that DPAs be reserved for the most complex and/ or high-profile cases and that the heads of the relevant prosecuting authorities 27 take personal responsibility for them.28

Terms of the DPA

A DPA must contain:

  • A “statement of facts relating to the alleged offence, which may include admissions made by [the defendant].”29
  • An expiry date.30

The DPA will impose various requirements on the defendant, including, but not limited to:

  • A financial penalty payable to the prosecutor;
  • Compensation to victims of the alleged offence;
  • Donations to charities/other third parties;
  • Disgorgements of profits from the alleged offence;
  • Implementation of/revisions to internal compliance programmes;
  • Co-operation in investigations of the alleged offence; and
  • Payment of reasonable prosecution costs.31

The DPA may impose time limits for the defendant to comply with any requirements imposed and it may also specify the consequences of non-compliance.32

It is important to note that a financial penalty is not a necessary term of a DPA. It is, however, a more than likely one and if imposed, the financial penalty “must be broadly comparable to the fine that a court would have imposed on [the defendant] on conviction for the alleged offence following a guilty plea.” Although apparently restrictive, during the bill’s passage through the House of Lords the government gave assurances that this principle of broad consistency with sentencing guidelines was not intended to prevent prosecutors, in appropriate cases, to agree lower financial penalties than sentencing guidelines would otherwise prescribe.33 In any event, there is currently no specific guidance from the Sentencing Guidelines Council on the appropriate levels of fines to be levied on corporates guilty of economic offences.34 If DPAs come into force before such guidelines are published, prosecutors and DPA defendants may, ironically, experience a period of greater flexibility.


The Act sets out a dual-phase process leading to the formal adoption of a DPA, both phases being concluded by a judicial decision.

Initial negotiations and the judicial declaration

Once the parties to the proposed DPA have begun negotiations but before terms are agreed, the prosecutor must seek a declaration from the Crown Court approving the DPA process in principle.35 The hearing of the application as well as the giving of reasons must be in camera.36 In case of refusal, the prosecutor may make a renewed application.37

Settlement of the DPA and judicial approval

Following the obtaining of the judicial declaration and the subsequent finalisation of the terms of the draft DPA, the prosecutor must apply to the Crown Court for judicial approval of the finalised DPA.38 The hearing on this application may be in private 39 but if the court decides to approve the DPA and grant the declaration, that decision, and the reasons for it, must be handed down in open court.40

In case the court refuses to approve the full draft DPA the prosecutor must decide whether to launch formal proceedings or, in case of determination to conclude a DPA, return to the drawing board with the defendant and renew the application for an initial declaration on different terms.

It is the granting of judicial approval which causes a DPA to come into force41 and at that point the prosecutor must publish the following items 42:

  • The DPA itself.
  • The initial judicial declaration and the court’s reasons for granting it.43
  • The court’s final decision to approve the DPA and its reasons for doing so. The court may order the postponement of publication “if it appears to the court that postponement is necessary for avoiding a substantial risk of prejudice to the administration of justice in any legal proceedings.”44

Effect of a DPA

Once the court’s approval has been obtained, the prosecutor is bound by the DPA formally to seek the court’s consent to prefer a voluntary bill of indictment45 charging the defendant with the alleged offence(s). Once the bill of indictment is signed, and the proceedings formally instituted, they are automatically suspended46 and the defendant cannot be prosecuted for the alleged offence.47

Policing the DPA

Non-compliance by the defendant

If the prosecutor is of the view that the defendant has failed to comply with the requirements of the DPA, she/he has two options:

The prosecutor may decide to take no action, in which case that decision and the reasons for it must be published.48

Alternatively, and at any time during the term of the DPA, the prosecutor may commence non-compliance proceedings before the Crown Court.49 The court will determine on the balance of probabilities whether there has been non-compliance50 and if it so finds three courses of action are open to it:

  1. Invite the parties to agree proposals to remedy the non-compliance;
  2. Terminate the DPA; or
  3. Take no action.51

In principle, the prosecutor must publish the outcome of any non-compliance application.52

If the court terminates the DPA, the prosecutor is at liberty to make a further application to the court for the lifting of the suspension of the formal proceedings.53

Variation of the DPA

The parties may agree variations to the terms of a DPA on a court invitation following a non-compliance application or if it is necessary for the defendant to be able to comply with the DPA due to the intervention of objectively unforeseeable circumstances.54 In either case, the agreed variation must be approved by the Crown Court in a procedure mirroring the procedure for judicial approval of the original DPA.55

Expiry of the DPA

Assuming there has been no judicial termination of the DPA before its date of expiry, the prosecutor will give notice to the Crown Court that she/he does not want the proceedings to continue.56

Such a notice prevents fresh criminal proceedings from being instituted against the defendant for the alleged offence(s).57 The exception is if the defendant has knowingly or recklessly provided inaccurate, misleading or incomplete information to the prosecutor during the course of negotiations for the DPA.58 Of course, if such behaviour is discovered during the course of a DPA, it is very likely to constitute a breach of requirement which can, at worst, lead to judicial termination of the DPA and the reinstitution of formal proceedings.

When the notice is given, the prosecutor must publish the fact of discontinuance as well as details of the defendant’s compliance with the DPA unless, again, the court has ruled that such publication should be postponed to avoid “a substantial risk of prejudice to the administration of justice in any legal proceedings.”59


There is no statutory right of appeal against any of the decisions set out above. That means that any challenge to any “DPA decision” is limited to those which will be deemed susceptible to judicial review. While it is clear that any relevant decision by a prosecutor is susceptible to judicial review, in relation to the judicial decisions it is less so.

Judicial review is not available in respect of any matter relating to trials on indictment.60 While it was certainly the government’s intention that this general exclusion should apply to judicial decisions in the DPA procedure,61 there lingers a doubt whether this exclusion has been achieved. The test formulated for whether a decision or ruling by a Crown Court is in respect of a matter relating to a trial on indictment is if it “aris[es] in the issue between the Crown and the defendant formulated by the indictment (including the costs of such issue)….”62 It does not appear entirely self-evident that a decision by a Crown Court judge refusing a suspect the potential benefit of non-prosecution before any indictment is in existence falls within the scope of this formulation. It is therefore not inconceivable that this attempt to exclude the jurisdiction of the High Court may prove ineffective.

Complete and incomplete DPAs and subsequent prosecutions


The standard criminal disclosure regime under the Criminal Proceedings and Investigations Act 1996 applies only when a suspension is lifted against proceedings commenced (and suspended) following the judicial approval of a DPA.63 The approach of designated prosecutors to disclosure in the course of the DPA process will be set out in the forthcoming Code on DPAs.64

Admissibility of material relating to a DPA that never entered into force

Material that shows that the defendant entered into negotiations for a DPA as well as material created solely for the purpose of preparing the DPA or the statement of facts is admissible as evidence against the defendant, but only in relation to:

  1. “offences consisting of the provision of inaccurate, misleading or incomplete information; or
  2. some other offence where in giving evidence [the defendant]makes a statement inconsistent with the material,” but only if the material becomes relevant as a result of procedural steps taken by the defendant.65 This will include prosecution for offences intended to be covered by the proposed DPA.

Material relating to a DPA that entered into force

In this circumstance, the rule is simple: The statement of facts contained in the DPA is deemed to be an admission by the defendant under Section 10 of the Criminal Justice Act 1967.66 The prosecutor would not have to lead any further evidence to prove the facts contained in the statement of facts and, conversely, the defendant would be debarred from leading evidence to contradict them.

The Code on DPAs

As stated above, the DPA regime will come into force only once the designated prosecutors have published a Code on DPAs. There are two main areas where potential DPA defendants will look to the

Code for clarification:

First, the Code ought to set out the outlines of the prosecutors’ procedure dealing with initial approaches by potential DPA defendants, initial negotiations and the level of defendant input into the content of the prosecutor’s application for a declaration.

Second, the approach by designated prosecutors to suspected violations of the terms of a DPA needs to be clarified as well as the criteria that will be applied when deciding whether to institute noncompliance proceedings. In particular, it would be of assistance to future DPA defendants to know how and to what extent the defendant will be asked to provide explanations and/or clarifications before the prosecutor decides whether to make a non-compliance application.

Americanisation of UK white collar crime enforcement?

It is clear that the inspiration for Schedule 17 is the American DPA. There are, however, three major differences with respect to the US regime.

First, a description of the US system would not be complete without mention of the non-prosecution agreement (“NPA”) under which a company agrees to undertake remedial action and cooperate with the authorities in exchange for a prosecutorial undertaking not to file charges. NPAs were considered in the Consultation Paper67 and appear to have been excluded because it “leaves substantial power in the hands of the prosecution with no judicial oversight.”68 NPAs were barely touched upon in the Consultation Response69 and the Act does not create a UK NPA.70

Second, judicial oversight is both more intensive as well as intervening earlier under the UK regime. While this makes the process itself less flexible for prosecutors and DPA defendants, it ought to minimise the risk of surprise judicial rejections of a “final” agreement. A related difference is the UK DPA’s principle of non-disclosure until judicial approval has been secured. The US model of publication upon agreement by the parties brings with it the possible inconvenience of publishing an agreement only to see it rejected.71

Third, and crucially, unlike its US equivalent the UK DPA is not open to individual defendants. What effect, if any, this may have on the interaction between corporate defendants and individuals bearing operational responsibility within the corporate organisation remains to be seen. There may now be a clear incentive for corporate defendants to obtain immunity for prosecution in return for providing the authorities with evidence which can then be used against individuals in conventional criminal prosecutions.

What this means

David Green QC’s appointment as director of the SFO has been widely reported as bringing in a less accommodating approach to corporate suspects than that practised by his predecessor, Richard Alderman.72 David Green addressed DPAs within this approach and in the post-Innospec landscape in a speech in June 2012:

At present we are in no man’s land, between rock and a hard place. A corporate needs to see the advantages of self-reporting. At present the prosecutor’s role is circumscribed by the Innospec judgment pending the clarity afforded by legislation introducing DPAs.

A corporate which self-reports cannot be given a guarantee in advance that it will not face prosecution. No prosecutor could do that. But the fact of self- reporting will be recognised as a factor of significance in the assessment of the public interest limb of the code test applied in deciding whether or not to prosecute. If a prosecution is not in the public interest, the SFO will be likely to seek a civil settlement.

Obviously, the introduction of DPAs will provide a very useful option in this context.73

The message, therefore, is that DPAs should be seen as an incentive to corporates to self-report potentially criminal wrongdoing. In this regard, there are three factors which will be of particular relevance to those advising corporates in a quandary: First, the relative safety of the limits to the use which prosecutors can make of material obtained in DPA negotiations should the DPA not enter into force; second, the comfort of early judicial agreement in principle; finally, the principle of confidentiality until judicial approval of the final agreement.

Nevertheless, despite these ostensibly comforting features, it must be born in mind that DPAs are completely new to the UK legal landscape. It is therefore difficult to know what David Green meant when he recently declared that “DPA’s will only be used in the right circumstances.…”74 It must be hoped that the forthcoming Code for DPAs will provide clear guidance.

It also bears mention that although a successful DPA will result in an absence of a criminal conviction, it can still have serious consequences for the corporate concerned (in addition, of course, to the financial and reputational costs of compliance with the terms of the DPA). For instance, whereas debarment from public procurement contracts will not be a direct result of a DPA, such a clear admission of guilt is likely to be a factor the authorities will take into account for the purpose of discretionary exclusions from public tenders.

Finally, it should be mentioned that the scope of DPAs, both in terms of whether they should be available to individuals and for a wider range of offences, is likely to be the subject of future review once the government has assessed their impact. As mentioned above, the Act also provides for the designation by the Secretary of State of additional prosecutors able to enter into DPAs.75 The introduction of DPAs in the UK was described as “a toedipping exercise” and if their efficacy is proved, the intention of the Act’s authors is that their scope may very well be extended.76