Andrew Swan
Andrew Swan

Member Article

Deferred prosecutions announced for corporate crime

The government has announced plans to create US-style deferred prosecution agreements (DPAs) for corporate crime.

DPAs are a form of plea bargaining, which allows companies to escape prosecution if they admit wrongdoing, take sufficient corrective action and pay a penalty. The government seeks to encourage self-reporting of financial crime and to ensure fines are paid in the UK, rather than in foreign jurisdictions. It is expected that the process will be scrutinised by an independent judge and the threat of prosecution will remain for the company should it fail to fully comply with the agreement.

The Justice Minister, Damian Green, said: “DPAs will give prosecutors an effective new tool to tackle what has become an increasingly complex issue. It will ensure that more unacceptable corporate behaviour is dealt with including through substantial penalties, proper reparation to victims, and measures to prevent future wrongdoing.”

Critics of DPAs have raised concerns about transparency and their tendency to undercut the role of the judiciary and the need to prosecute wrongdoing. There is also concern that public perception will be that white collar crime is not treated as seriously as other crime, which may undermine public confidence in the justice system.

However, the Solicitor General, Oliver Heald, said: ’I am confident that DPAs will be an invaluable tool for the Serious Fraud Office and the Crown Prosecution Service as they work to combat economic crime. In cases where a company accepts wrongdoing, and is committed to put things right, a DPA will mean that it must comply with stringent conditions to compensate and ensure there are no repeat incidents, whilst avoiding a lengthy and expensive prosecution with the prolonged uncertainty it brings for the victims, blameless employees and others dependent on the fortunes of the company.“

“There will always be cases where the public interest requires a full criminal prosecution and DPAs will allow prosecutors to focus more of their resources on these cases.”

Andrew Swan, Head of the Financial Crime Unit at Newcastle law firm Short Richardson & Forth LLP, commented: “There is clearly a benefit in DPAs and they will be attractive to companies who find themselves in the difficult circumstances that arise from financial crime offences.”

“However, I do appreciate the concern that the public may perceive this as a way for rich companies to buy their way out of criminal proceedings. This must be handled carefully by the prosecuting authorities, particularly in light of the new Bribery Act 2010. It seems rather odd that companies caught paying bribes may be allowed to pay civil fines to avoid criminal prosecution.”

This was posted in Bdaily's Members' News section by Andrew Swan .

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