The Crime and Courts Act 2013 (“the Act”) rec eived royal assent in April 2013. The Actenables designated prosecutors (currently only the CPS and the SFO) to enter into Deferred Prosecution Agreements (“DPA’s”) for specified fraud, bribery and money laundering offences. DPA’s became part of the prosecutors “toolkit” for dealing with suspected corporate (not individual) offenders from 24 February 2014.
DPA’s involve an agreement between the prosecutor and a suspected corporate offender (“the corporate”) to suspend a prosecution for a defined period of time providing the corporate complies with certain specified conditions. Successful completion of those conditions will result in the case against the corporate being discontinued at the conclusion of the deferral period. Corporates include companies, partnerships and other commercial organisations, including, for example, hospital trusts.
When a prosecutor and a corporate wish to enter into a DPA, the prosecutor must apply to the Crown Court for a declaration that the DPA is in the interests of justice and that the terms of the DPA are fair, reasonable and proportionate. The Act therefore clearly positions the Court as the gatekeeper, able to wave through or stop a DPA in its tracks based upon the Courts’ assessment of whether it is in the public interest.
Corporates seeking to enter into a DPA should therefore give careful consideration to what terms the courts will consider necessary in the public interest and whether a DPA will be sanctioned by the courts at all at all on the facts of the case.
The Act requires that the agreement between the Prosecutor and the corporate must contain a statement of facts. While that statement may include admissions of guilt by the corporate the Act does not require it. This position has been reflected in the joint code of practice on the use of DPA’s which was published by the SFO and CPS on 14 February 2014. The joint code does not require formal admissions of guilt but does require that the corporate admit the content and meaning of key documents featured in the statement of facts.
David Green CB QC, Director of the SFO, has said that DPA’s are not a mechanism for a corporate offender to buy itself out of trouble. The courts will undoubtedly agree with this position. A DPA will only be entered into where the full evidential test for Crown Prosecutors is met or, in the alternative, where admissible evidence supports a reasonable suspicion that a full investigation would result in the full evidential test being met. Given the evidential position necessary for a prosecutor to enter into DPA negotiations, it is probable that the courts will begin any analysis of the proposed terms of DPA by presuming that the public interest requires an admission of guilt by the corporate. To consider the public interest from any other starting point could lead to a situation in which a corporate, against whom there is evidence sufficient to prosecute, is able to delay prosecution until such time as evidence necessary to support a prosecution is diminished or no longer available. This could leave the prosecutor unable to prosecute the corporate in the event that the corporate fails to comply with the conditions of the DPA.
In what circumstances therefore will the Court conclude that the public interest does not require an admission of guilt? Put another way, when will the courts consider that the public interest requires a “deferred prosecution” rather than a “deferred conviction”.
The approach to be taken by courts when plea and co-operation agreements are agreed by the prosecution and the defence was considered by the Crown Court (Thomas LJ as he then was) in R v Innospec Ltd and by the Court of Appeal in R v Dougall. The judgments in both cases therefore provide some guidance as to the likely approach the courts will take when considering the proposed terms of a DPA.
In those cases the courts confirmed that they would not be bound by agreements reached between the prosecution and defence concerning the basis of a plea and the sentence to be imposed. The courts will not simply accede to a pre-agreed disposal package even if it has the backing of all parties. The parties must provide the Court with all relevant particulars of the case necessary to allow the court properly to understand and scrutinise the agreements reached.
While the Court does not have the power to adjudicate upon factual differences in DPA proceedings the Court, when considering the terms of a DPA, is likely to follow the principles set out in Innospec and Dougall and embark upon an independent analysis of the facts as they are presented by the parties in each case to determine whether the terms of a proposed DPA(including the absence of an admission of guilt) are in the public interest.
A corporate hoping to conclude a DPA without admissions of guilt should not therefore rely purely upon the acquiescence or agreement of the prosecutor to such a proposal. The corporate should prepare for detailed scrutiny of the agreement by the court by ensuring that the statement of facts clearly details those aspects of the particular case which demonstrate why an admission of guilt is not in the public interest. Such facts will clearly be case specific but might arise where the public interest of entering into a DPA would be undermined by an admission of guilt, for example where it can be demonstrated that an admission of guilt would have the same adverse collateral effects on the public as a conviction. Such a situation might arise where a major quoted multinational corporate employing a substantial workforce, is able to demonstrate that it faces the loss of public contrac ts and consequent financial ruin with huge consequences for the general public as members of the pension investment community, in the event that it were to make admissions of guilt in connection with criminal offences.