The anticipated consultation paper on US-Style deferred prosecution agreements (PDA’s) was published this week by Solicitor General Edward Garnier QC and Justice Minister Crispin Blunt. Under the proposal, businesses would face penalties rather than immediate criminal proceedings where the business fails to adhere to measures imposed to prevent further wrongdoing. The consultation paper details that whilst criminal charges would be laid, the prosecutor would not immediately proceed with the criminal charges. Instead prosecutors would consider terms and conditions which may include a financial penalty, restitution, force 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 be instigated.
Despite the review of the range of tools open to prosecutors, the consultation paper stresses that in situations where the alleged offence is serious, or in cases where it would not be in the public interest to proceed on the basis of a DPA, a criminal prosecution would ensue.
Deferred Prosecution Agreements have long been used successfully in the USA. Richard Alderman, former Director of the Serious Fraud Office in his speech to the SaÃ¯d Business School, University of Oxford stated that deferred prosecutions were a “very powerful weapon’ and went on to add that he wanted to see them brought into use in the UK.
Bringing businesses to justice can not only be expensive and take considerable time but difficulties are often encountered in respect of the criminal standard of proof. In addition, there is often a detrimental effect upon a business following the instigation of a criminal prosecution which can lead to loss of trade and job losses. In less serious cases the impact that a criminal prosecution will have can often outweigh the offending behaviour.
Justice Minister Crispin Blunt stated:
“Law enforcement agencies have told us that they do not have the tools they need to tackle increasingly complex economic crimes. Investigations can take several years and cost millions of pounds, with no guarantee of success, which means victims wait far too long for reparation. Or indeed receive no payback at all.’
The proposed DPA model detailed with the consultation paper highlights the need for transparency and if agreed, the deferred prosecution agreement would be formally approved in open court. Richard Alderman went on to comment during his speech on the subject at Oxford University that “the public trust the Judges in these matters and will be reassured if they know a judge has given approval.’
The consultation closes on the 9th August 2012.
By Sian Hall, Business Crime and Fraud Solicitor