Great Britain imports controversial ‘Deferred Prosecution Agreement’ practice from US

For several years, the United States government has extended to financial institutions and other corporations that are discovered violating criminal laws an out-of-court settlement called a “Deferred Prosecution Agreement.” These agreements typically impose a monetary penalty, require the implementation of various compliance measures and improvements, have a duration of a specified number of years, and impose certain remediation measures.

The Deferred Prosecution Agreements (DPAs) do not typically require an admission of guilt by the institution or corporation. When the specified time period expires, so does the threat of prosecution if there has been no further misbehavior in the interim.
DPAs have now found their way to Great Britain, thanks to the efforts of the UK Serious Fraud Office. The SFO has pressed for the incorporation into law of a system of Deferred Prosecution Agreements akin to those that operate in the United States.

The SFO believes a DPA has an advantage over the current system of “Civil Recovery Orders” because it requires an early formal admission of wrongdoing by a corporation, which may be used in subsequent criminal proceedings if the company violates the DPA. The current system in Great Britain does not allow for this.

The initiative for DPAs in the UK originated in 2011, led by the then-Solicitor-General, Edward Garnier QC, and the former SFO Director, Richard Alderman. The current SFO Director, David Green QC, continued on the same course. This has now culminated in the inclusion of a DPA procedure in a Parliamentary Bill that recently received the Royal Assent. (Section 45 and Schedule 17 of the Crime and Courts Act 2013, which did not set an effective date for the DPA procedures.)

Schedule 17 requires that the Director of Public Prosecutions and the Director of the SFO jointly issue a Code for prosecutors. The Code will guide prosecutors on the general principles to be applied in determining if a DPA is likely to be appropriate in a particular case.

This Code for prosecutors will be drafted following a consultation period. The new DPA system will probably take effect in 2014 and will also apply to conduct which took place before the DPA provisions came into force.

The proposed British DPA system

A DPA is defined in the Parliamentary Bill as “an agreement between a designated prosecutor and a person (“P”) whom the prosecutor is considering prosecuting for an offence….” whereby “P agrees to comply with the requirements imposed on P by the agreement….”

Effect of DPA on pending court proceedings

As soon as proceedings for an alleged offence are instituted by a prosecutor, they are automatically suspended on application by the prosecutor to the Crown Court following approval of the DPA by the court.

“Instituted proceedings” are those that have been instituted by the prosecutor in the Crown Court by presenting a bill of indictment charging P with an alleged offence. The offences which may be the subject of a DPA are specified in Part 2 of Schedule 17.

Persons who may enter into a DPA may be a corporation, partnership or an unincorporated association but may not be an individual.

Content of a DPA

A DPA must contain a statement of facts relating to the alleged offence and must specify a date when it ceases to have effect.

The requirements that a DPA may impose on P include, but are not limited to, the duty to:

  • pay a financial penalty to the prosecutor,
  • compensate victims,
  • donate money to a charity,
  • disgorge any profits made,
  • implement or make changes to a compliance programme,
  • cooperate in any investigation, and
  • pay costs to the prosecutor for expenses incurred in arriving at a DPA.

Any money received by the prosecutor in connection with a financial penalty or disgorgement of profits must be paid into the Consolidated Fund.

Preliminary Hearing

Following negotiations between a prosecutor and P, but before the terms are agreed, the prosecutor must apply to the Crown Court at a closed door hearing for a declaration that entering into a DPA with P is likely to be in the interests of justice and that the proposed terms are fair, reasonable and proportionate.

Final Hearing

Such a declaration by the court and the reasons for approval must be given in open court, at which point the DPA comes into force. Upon approval, the prosecutor must publish the DPA, the declaration of the court and the court’s reasons for its decision.

Breach of DPA

If while the DPA is in force the prosecutor believes that P has failed to comply with its terms, the prosecutor must bring the matter to the Crown Court’s attention. If the court finds, on a balance of probabilities, that P has failed to comply, it may invite the prosecutor and P to agree to proposals to remedy the failure or it may terminate the DPA.

Amendment of DPA

The prosecutor and P may agree to vary the terms of the DPA if invited by the court to do so or where it is necessary to avoid noncompliance by P, in circumstances that were unforeseen when the DPA was agreed to. Such an agreement requires the approval of the Crown Court.

Discontinuance of Proceedings

After the expiration date of the DPA, the proceedings that had been instituted by the prosecutor must be discontinued. New proceedings maybe instituted, however, if during the course of negotiations of the DPA, P provided inaccurate, misleading or incomplete information to the prosecutor which he knew or should have known was so.

Use of material in criminal proceedings

The statement of facts contained in a DPA is to be treated as an admission by P in any proceedings brought against P for the alleged offence.


The DPA will be of much greater appeal to the SFO as an alternative to prosecution than the current alternative. It is also likely to provide companies discovering serious fraud or corruption with a greater incentive than currently exists to self-report to the authorities.

* Vivian Robinson QC

Vivian Robinson QC became a barrister in 1967 and practised at the English criminal bar for over forty years, acting for both prosecution and defence. In 2009 he left the practising bar to take up appointment as first General Counsel at the Serious Fraud Office (SFO). In this capacity he played a prominent role in the development of the SFO’s enforcement strategy regarding the UK Bribery Act 2010 and was the SFO’s principal liaison with the business community on this subject. In 2011 he was invited to join the US law firm McGuireWoods. He became a member of the firm’s Government, Regulatory and Criminal Investigation team and advises clients on compliance and white collar crime issues, both in the UK and internationally.