The government today announced plans to legislate to create US-style deferred prosecution agreements (DPAs) for corporate crime. Publishing a government response to a Ministry of Justice consultation held last summer the justice minister, Damian Green (pictured), said DPAs 'will give prosecutors an effective new tool to tackle what has become an increasingly complex issue.
'It will ensure that more unacceptable corporate behaviour is dealt with including through substantial penalties, proper reparation to victims, and measures to prevent future wrongdoing.'
DPAs act as a form of plea bargain, allowing a company to escape prosecution if it admits wrongdoing, takes corrective action and pays a penalty. The idea is to encourage self-reporting of white-collar crime, and to ensure fines are paid in the UK rather than overseas. The MoJ said the process will be scrutinised by an independent judge and the threat of prosecution will remain hanging over an organisation should it fail to comply fully with the agreement.
In the US, deferred prosecutions raise about $2.5bn a year in penalties.
Barry Vitou, partner at international firm Pinsent Masons welcomed the announcement, saying that DPAs offer a better way to tackle corporate crime than the present choice of prosecution or no prosecution. The proposal to involve judges at an early stage would be 'an improvement on the US process,' Vitou said.
Critics of DPAs have raised concerns about transparency and their tendency to undercut the role of the judiciary. Today's announcement, which is subject to a further public consultation, said that the law would require final agreement to be made in open court and published so that the wrongdoing and sanctions for it are 'entirely transparent'.
Another worry, raised by the City of London Law Society in its response to the consultation is creating a public perception that white collar crime is not treated as seriously as other crime, 'which may undermine public confidence in the justice system'.
However Oliver Heald, the solicitor general, said: ‘I am confident that DPAs will be an invaluable tool for the Serious Fraud Office and the Crown Prosecution Service as they work to combat economic crime. In cases where a company accepts wrongdoing, and is committed to put things right, a DPA will mean that it must comply with stringent conditions to compensate and ensure there are no repeat incidents, whilst avoiding a lengthy and expensive prosecution with the prolonged uncertainty it brings for the victims, blameless employees and others dependent on the fortunes of the company.
‘There will always be cases where the public interest requires a full criminal prosecution and DPAs will allow prosecutors to focus more of their resources on these cases.’