Diversion programs for those accused of criminal offences are not new in Canada. In Québec, for example, first-time individual accused or accused suffering from a psychiatric or medical condition may participate in a diversion program, which results in the criminal charges being dropped. Corporations may also benefit from diversion programs, such as the Competition Bureau’s Immunity and Leniency Programs.
Transparency International Canada (“TI Canada”), a non-governmental anti-corruption organization, released a report in July, 2017 “urging” the Canadian government to adopt a Deferred Prosecution Agreement (“DPA”) mechanism, modeled closely to the current regime in the U.K. A DPA is an agreement between the prosecutor and the accused suspending outstanding charges and requiring the accused to fulfill a certain number of commitments. Once the accused has completed its contractual undertakings, the prosecutor will drop the charges.
TI Canada’s Recommended DPA Mechanism
The proposed scheme, according to TI Canada, addresses all the pitfalls of the current DPA regime in the U.S., but retains all of the advantages, including encouraging greater enforcement and self-reporting, saving costs and resources for both parties, and promoting certainty and transparency for all stakeholders involved.
TI Canada recommends that the proposed DPA scheme only be available to corporate accused who are charged with economic crimes. The DPA scheme would be legislatively enacted and judicially monitored to fulfill the underlying three objectives of financial reparations, sincere compliance reform, and accountability of individual wrongdoers.
Below is a summary of the proposed regime.
Availability of a DPA
The DPA regime should be enacted through specific legislation and an accompanying guideline to prosecutors from the Department of Justice. The DPA regime does not include Non-Prosecution Agreements because they excludes both the public and the judiciary from the process. DPAs should be available to all corporations accused of economic crimes, unless it is an egregious case. Only the prosecutor can initiate DPA negotiations. A prosecutor’s decision to enter into DPA negotiations is based on an analysis of the evidence of liability and the public interest, with a consideration of the facts currently provided to prosecutors in the U.K.
Judicial Oversight and Scrutiny
The Court ought to be afforded strong supervision powers in matters involving a DPA ranging from the preliminary hearings to any potential breach or variation of the DPA. These preliminary hearings must be confidential. Where a DPA is successfully concluded, the DPA itself must be made public. Any related Court decisions may be made public, where appropriate.
Confidentiality of Material
Material and evidence provided by the accused during the DPA negotiations cannot be used against the accused in failed DPA negotiations except in the prosecution of perjury or contradictory version cases. However, the Statement of Facts in a concluded DPA can be used subsequently in any case.
The Crown’s obligation to provide complete, timely, full, and ongoing disclosure is not affected by the DPA negotiations process. The accused’s Charter rights must be protected.
Structure of a DPA
Any DPA should include the following standard measures:
- Financial reparations: fines and penalties, compensation of victims, disgorgement of profits, and reimbursement of reasonable investigation and prosecution costs;
- Sincere compliance reform: appointment of a monitor (if necessary), undertakings of compliance reform, undertakings of full cooperation with law enforcement, and clauses relating to the effect of a merger or acquisition on the compliance program.
- Accountability of individual wrongdoers: full cooperation with law enforcement and prosecution of individual wrongdoers in the corporation.
- A muzzle clause preventing the accused from attempting to undermine the credibility of the agreement.
The appointment of a monitor may not always be necessary. When necessary, the monitor’s fees ought to be paid by the accused. A thorough selection procedure must be in place so that the chosen monitor fits the expertise and impartiality criteria. The monitor must also be prevented from being hired by the accused for a period following the conclusion of the DPA. It is unclear what TI Canada’s position is on the confidentiality of the monitor’s report.
TI Canada incorporated the Integrity Regime, which currently debars corporations from bidding on lucrative government contracts if they are charged with an offence, into its proposed DPA scheme. Since corporations subject to a DPA are “charged with an offence”, they may be subject to debarment. TI Canada recommends that prosecutors have the ability to use debarment as a bargaining chip during the DPA negotiations.