In an effort to provide transparency to companies seeking to cooperate, the UK Serious Fraud Office has published guidance on its approach to Deferred Prosecution Agreements. DPAs, enabled by Schedule 17 to the Crime and Courts Act 2013, are court-approved agreements that allow for the suspension of prosecution for a specified period, conditioned upon the company’s admission of misconduct, payment of a financial penalty, satisfaction of certain conditions, and agreement regarding future compliance and cooperation. To-date, the SFO has entered into eight DPAs.
The DPA guidance forms part of the SFO Operational Handbook. The chapter on DPAs addresses various aspects of DPA preparation, negotiation, and formation, and termination, including:
- The public interest and evidentiary considerations that must be met – There must be at least a reasonable suspicion based on admissible evidence that the company has committed an offense, and there must be a realistic prospect of conviction. Factors that favor prosecution are balanced against mitigating factors in view of the public interest. Cooperation is key.
- The negotiation process
- Consideration of concurrent investigations
- Internal processes leading to the SFOs decision to invite a company to enter into a DPA
- Confidentiality and protections attached to the DPA process – Negotiation of a DPA is a formal process, and the terms of the negotiations must be agreed upon prior to any substantive negotiations. The guidance details the circumstances and purposes for which the SFO may disclose (and use as evidence against the company) the existence of DPA negotiations and draft DPAs.
- Disclosure obligations – The company is presumed to have sufficient knowledge of the evidence, if it has conducted an internal investigation and/or self-reported the misconduct; but the SFO may be required to disclose additional information that could undermine evidence produced by the company, or that was procured from a source inaccessible to the company.
- DPA documents, including a public statement of facts
- Terms of the DPA, including cooperation, compliance measures, reporting requirements and duration
- Composition and amount of the financial penalty
Pursuant to the Criminal Procedure Rules 2015, Part 11, the prosecutor must make a preliminary written application to the court once DPA negotiations have begun, identifying the parties and presenting a draft indictment and statement of facts. The final application, to be heard in open court, must contain the final, signed agreement and a draft indictment.