|March 24, 2014|
Previously published on March 21, 2014
Following a consultation process conducted by the UK’s Director of the Serious Fraud Office and the Director of Public Prosecutions, use of Deferred Prosecution Agreements (“DPAs”) became available to designated prosecutors in the UK for various corporate offences including fraud, on February 24, 2014. The use of DPAs will confer greater powers on prosecutors to combat white collar criminal activity in the UK and is expected to address backlogs in the prosecution of offences under various legislative regimes, including the Bribery Act, 2010.
Schedule 17 of the Crime and Courts Act, 2013, deals exclusively with UK DPAs, the highlights of which include the following: DPAs in the UK now allow for an automatic suspension of criminal proceedings following a charge against a body corporate, a partnership or an unincorporated association, subject to compliance by the alleged offender with any number of requirements imposed by the prosecutor. The requirements may include, amongst other items imposed at the prosecutor’s discretion, the payment of fines, compensation, donations or costs, disgorgement of profits and/or cooperation with an investigation.
DPAs are Only Available for Companies, Not Individuals.
Finally, before a DPA can come into force, it must be approved by the Court, which must be satisfied that the DPA is both in the interests of justice and is fair, reasonable and proportionate. After the DPA is approved, it must be published such that it is publicly available, along with the decision and reasons of the Court for the approval. The DPA remains in force until it ceases on its terms or is terminated by the Court. If a party breaches the terms and conditions of the DPA the Court may consider any proposed remedy by the prosecutor for such a breach, including termination of the DPA.
The use of DPAs in the UK marks a shift towards a more American style of white collar crime investigation and enforcement. We have very recently seen a similarly-themed but somewhat more attenuated shift in Ontario with the Ontario Securities Commission’s release of Staff Notice 15-702 on March 14, 2014. This Bulletin introduced the limited permissibility of Non Prosecution Agreements (“NPAs”) or “no enforcement action agreements” in Ontario: see the recent BLG White Collar Crime and Regulatory Bulletin located at http://BLG.com/en/NewsAndPublications/Publication&under;3678. Aside from the limited availability of no enforcement action agreements in Ontario conferred by Staff Notice 15-702 however, NPAs remain generally unavailable within Canadian securities enforcement proceedings. DPAs are not yet available under any circumstances.