On June 27, the U.K. authorities—the Director of Serious Fraud Office and Director of Public Prosecutions—put out a draft Code of Practice on Deferred Prosecution Agreements ("the Code"). The Code provides U.K. prosecutors with guidance on negotiating a deferred prosecution agreement (UKDPA), applying to a U.K. court for approval of a UKDPA, and oversight of UKDPAs after approval by the court. The UKDPA is similar to the U.S. model but with some significant differences.
The U.S. DPA Model
Over the past century, it has become easier for U.S. prosecutors to charge and convict corporations. In 1993, in the wake of the Organizational Guidelines’ implementation, prosecutors began to break from the binary choice to either indict or not charge at all, and instead entered into arrangements not to prosecute a company, called a non-prosecution agreement (NPA), or an agreement to defer prosecution against a company—a DPA. We’ve written extensively about these agreements, starting with an article published in 2006: “Devolution of Authority—the Department of Justice’s Corporate Charging Policies” [PDF]. We wrote the article as a resource for practitioners to find out more about these DPAs and NPAs—how much companies were paying for fines, which ones were waiving privilege, and other features of the agreements. No one was writing about DPAs and NPAs at the time, with the exception of Russell Mokhiber at Corporate Crime Reporter.
DPAs and NPAs are agreements between the Department of Justice and a corporation to resolve a criminal case short of a criminal conviction, provided the company keeps its end of the bargain. Conditions typically include business and compliance reforms, cooperation, a substantial fine, and a promise to refrain from future illegal conduct. In these agreements, a company typically:
- Admits to wrongdoing.
- Waives the statute of limitations for a period of time.
- Acknowledges that the agreement and the factual basis is admissible in court.
- Agrees that the company will no longer violate the law.
- Consents to help the DOJ prosecute any wrongdoers (e.g., by making employees available to testify for grand jury proceedings or at trial, and providing documents in addition to other evidence to the DOJ)
- Agrees that company employees will not contradict the terms of the agreement.
