The Serious Fraud Office and Director of Public Prosecutions have published, for consultation, a draft Code of Practice.  The draft code details how Deferred Prosecution Agreements would work.

Schedule 17 of the Crime and Courts Act 2013, which received Royal Assent on the 25th April 2013, introduced DPA’s.  Under the Code of Practice, businesses would face penalties rather than immediate criminal proceedings where the business fails to adhere to measures imposed to prevent further wrongdoing. The draft code details that whilst criminal charges would be laid, the prosecutor would not immediately proceed with the criminal charges. The charges would be automatically suspended. Prosecutors would then consider terms and conditions which may include a financial penalty, restitution, forcing the business to give up illegally obtained profits and other measures to prevent further illegal acts. Of course, should the business fail to adhere to agreed terms and conditions, criminal charges would resume.

Such Deferred Prosecution Agreements would apply only to organisations and not individuals. They can be used in respect of the offences of Fraud, Conspiracy to Commit Fraud, Theft, False Accounting, Forgery and Counterfeiting, Evasion of VAT, Money Laundering and other offences of economic crime, but not in respect of regulatory offences such as Health and Safety.

Once a package of terms has been agreed between the organisation and prosecutor, approval must be sought from the Crown Court to the effect that the DPA is in the interests of justice and that the terms are fair, reasonable and proportionate. However, organisations should take note that should they enter in to terms which are approved, and should they fail to comply, the Statement of Facts document for the DPA could be treated as an admission should criminal proceedings be brought.

Comments to the draft code are requested by the 20th September 2013 with a view to implementation by February 2014.

If you have any questions about this article, or in relation to fraud and business crime in general, please do not hesitate to contact one of our experienced criminal defence solicitors.

By Sian Hall, Business Crime Lawyer