Deferred Prosecution Agreements – what they are and how they work

In the second part of her article about legislation to combat international bribery, Ellen Sanchenko, Criminal Litigation solicitor, looks at Deferred Prosecution Agreements which were introduced with the intention of avoiding lengthy and expensive prosecutions of self-reporting companies.

A Deferred Prosecution Agreement (DPA) is somewhat in the style of a plea bargain. It is effectively an agreement between a prosecuting body – the Serious Fraud Office (SFO) or Director of Public Prosecutions (DPP) – and a commercial entity which could potentially be prosecuted.

Under the agreement, a prosecutor charges a company with an offence, but proceedings are suspended in case the DPA is approved by a judge.

It is crucial to note that entering a DPA negotiation is not automatically available to a company that has been suspected of a criminal wrongdoing; a company would only be invited to enter negotiations if there was full cooperation with the investigations.

What can be ascertained from previous cases is that self-reporting is highly encouraged to the extent that it became a key consideration in determining whether a company cooperated with the investigation.

If a DPA is agreed, the company must satisfy the conditions set out in it, such as paying a penalty, compensation, etc. If the company does not do what is required, the prosecution is likely to resume.

DPAs were introduced as a result of section 7 of the Bribery Act and became available to the prosecutors in 2014.

Regardless of the way the authorities decide to proceed, either by way of a DPA or by way of a prosecution, this can lead to significant penalties. It undoubtedly serves as a strong incentive for commercial organisations to invest in reinforcing compliance frameworks.

‘Critics say agreements serve as an escape from culpability’

DPAs have proved to be an effective enforcement tool. Since their introduction, the Serious Fraud Office has been actively using them, and in the majority of cases, the corporate organisation in question accepted at least one charge of section 7 ‘failure to prevent’ offence.

Matthew Wagstaff, Joint Head of Bribery & Corruption, speaking at the 11th Annual Information Management, Investigations Compliance eDiscovery Conference, said:

“The rationale behind the introduction of DPAs is simple: they are intended to avoid lengthy and expensive prosecutions, with all the prolonged uncertainty this can bring for victims, blameless employees, and others who may be dependent on the fortunes of the company.”

In spite of their obvious success, DPAs have received strong criticism from those who say that such agreements also serve as an escape from culpability.

Transparency International UK, the country’s leading independent anti-corruption ) organisation, has been particularly critical of the outcome of a case involving Rolls-Royce which entered into a DPA with the SFO on January 17 2017 following a four-year investigation.

Executive Director Dr Robert Barrington said it was “absurd that a company can admit to bribery, and yet neither the bribe payers, not the management teams that allowed the crime to happen, are held responsible.”

He added: “It is hard to believe that the interests of justice have been served, or that there has been proper acknowledgment of the victims of the crime.

“This case is in danger of sending a message to companies that DPAs are a soft option for those engaging in serious corruption and that, at the right price, can buy their way out of punishment, giving impunity to those who fragrantly broke the law.”

‘The investigation related to numerous payments by the company’

And indeed, back at the time of the Rolls-Royce investigation, the SFO stated it was the largest investigation in its history. Rolls-Royce was charged with six charges of conspiracy to corrupt, five charges of failure to prevent bribery, and one charge of false accounting.

The investigation related to numerous payments made by the company to its intermediaries in at least seven jurisdictions. The payments were alleged to have been made in connection with the award of large value contracts.

Rolls-Royce took responsibility for its corrupt behaviour that occurred over three decades, seven jurisdictions and three businesses. For this it paid a fine of nearly half a billion pounds. However, in 2019 the SFO concluded its investigation against Rolls-Royce and confirmed that no individuals would face prosecution.

Some criticism also comes from the fact that it is practically impossible to secure convictions against people implicated in DPAs because in the UK, unlike the US for example, they are not available to individuals.


For further information contact Ellen on 020 7613 1402 or email.

In the third and final part of this article to be published soon, Ellen explains the difference between Deferred Prosecution Agreements in the UK and similar arrangements operating in the USA and France.

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