Deferred Prosecution Agreements

Deferred Prosecution Agreements (DPAs) were introduced in the UK in 2014 to encourage self-reporting by corporates of criminal wrongdoing and are their numbers are steadily increasing.

Simply put, they allow a company facing prosecution to avoid a trial on condition that it complies with certain conditions. DPAs can be used for certain economic crimes including fraud and bribery. In October 2020 the SFO published a chapter from its handbook which offers comprehensive guidance on how it approaches DPAs, and how it engages with companies where a DPA is a prospective outcome.

No company wishes to be prosecuted, given the expense and reputational damage involved as well as the risk of being barred from tendering for public sector contracts if it is convicted.  However, only those companies that offer full co-operation with the authorities will be invited to enter into a DPA. These agreements are not a soft option, however, and the conditions of any DPA offered need to be considered very carefully.

Typically, such conditions will include payments (financial penalty, compensation, costs), continuing duties of co-operation and the satisfactory completion of a corporate reform programme – possibly involving a monitor. If, within the time period agreed, the company in question complies with those conditions then the prosecutor will discontinue criminal proceedings and the company will avoid the risk of a conviction. However, if it does not satisfy those conditions, then the prosecutor will reactivate proceedings and continue the prosecution of the company.

Only the Director of the Serious Fraud Office (SFO) or the Director of Public Prosecutions can authorise a DPA and, unlike in the US, a UK DPA is subject to significant judicial oversight. To have any legal effect a DPA must be approved by a judge as being in the interests of justice and having terms that are fair, reasonable and proportionate.

We have been involved in many of the cases in which DPAs have been entered into by corporates with the SFO, and so are well placed to advise on the merits or otherwise of such agreements and to guide companies through the process of negotiating one. 

How we can help

• The starting point of any DPA-related discussion is to understand the nature of a company’s alleged wrongdoing and to assess the strength of any prosecution case against it, with a view, if necessary, to making representations to the SFO about the shape of the case.
• If a corporate is at risk of prosecution, we can advise on the prospects of securing a DPA and whether that would be beneficial; if so, we can assist with the strategy of how to get there and can negotiate terms that are fair, reasonable and proportionate.
• We ensure our advice is practical and tailored to the particular needs at that time of the company, including the risk of civil litigation and employment proceedings, corporate governance issues and the likelihood of regulatory scrutiny, as well as the reputational consequences and potential impact on stakeholders such as customers and investors.  
• We can work on a stand-alone basis or alongside a company’s regular advisers where a corporate prefers for us to do so.  

Our approach

We understand the range of factors that need to be considered when entering into a DPA - legal, practical and financial - and the pressures on corporate management teams in weighing whether to go down the DPA route.

We marry this with our experience of how the SFO works and the law underpinning corporate criminal offences to help navigate a path which is in the best interests of the company.

If you have any questions about DPAs, please contact a member of our team.

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