The collapse of the trial of three former Tesco directors should not spell the end of deferred prosecution agreements (DPAs), but five years after the US-style agreements came to England and Wales opinions are divided about their value.
DPAs, which allow for prosecutions to be suspended, became available in 2014 under schedule 17 to the Crime and Courts Act 2013.
They have yielded some success. In 2017, Rolls-Royce agreed to pay penalties of more than £497m plus costs, while in 2013 Standard Bank (now ICBC Standard Bank) agreed to pay $26m (£20.3m) in fines and disgorgement of profits, as well as compensation to the government of Tanzania.
But their effectiveness was questioned after three former Tesco directors who had been named in a DPA were cleared in a criminal trial.
Christopher David, counsel in the white-collar defence and investigations practice at international firm WilmerHale, said the ‘jury is still out’ as to whether DPAs have been a success: ‘The government may consider the fines recovered under the four DPAs to date a success. But doubts are creeping in as to whether they are always the best route for a corporate defendant.’
Barry Vitou, shareholder at international firm Greenberg Traurig, said criticism following the Tesco developments was ‘well founded’ but that it should not mean the end for DPAs. ‘The prosecution and criminal conviction of a company for the conduct of a few bad apples in turn jeopardising the jobs of thousands of innocent employees is not in the public interest,’ he said.
Matt Cowie, a former SFO prosecutor and now partner at international firm Dechert, said the UK had ‘over-engineered and underutilised’ its DPA regime and is falling behind comparator enforcers such as the US and France, making it a less attractive place to settle multi-jurisdictional cases. He added: ’Nevertheless the DPA remains a powerful tool and incentive for companies facing the potential of a long drawn out prosecution in the UK. We can expect to see their continued use in the future.’