Deferred and non prosecution agreements like those used to settle Foreign Corrupt Practices Act (FCPA) cases should not be imported to the United Kingdom. That’s the take of Michael Koehler, an assistant professor of law at Southern Illinois University.
“Why does a law with an adequate procedures defense require the third option of a deferred prosecution agreement — the first two options being prosecute vs. not prosecute?” Professor Koehler asked in a letter to the UK Ministry of Justice.
The Ministry is taking comments on a proposal to import US-style deferred prosecution agreements into the UK.
“If a corporate has adequate procedures, but an isolated act of bribery nevertheless occurs within its organization, the corporate presumably would not face prosecution under the Bribery Act,” Koehler wrote. “This seems like a just and reasonable result and there is no need for a third option in such a case. On the other hand, if a corporate does not have adequate procedures – thus demonstrating a lack of commitment to anti-bribery compliance – and an act of bribery occurs within its organization, it presumably would face prosecution under the Bribery Act. This seems like a just and reasonable result. Does a third option really need to be created for corporates who do not implement adequate procedures? I submit the answer is no and urge the Ministry to reject use of deferred prosecution agreements in the Bribery Act context.”
Koehler said that a high percentage of corporate conduct that could implicate criminal laws is not reported to the enforcement agencies.
“I submit that one factor driving this dynamic is that companies and its counsel have come to realize that the enforcement agency will not be diligent and complete in its application of law to facts and its consideration of mitigating facts because the enforcement agency will never have to prove its enforcement theory to anyone other than itself,” Koehler wrote. “In short, U.S. alternative resolution vehicles ought not be viewed as a successful or desirable export.”
Koehler said he agreed with the Minister of Justice’s “wholesale rejection of non-prosecution agreements to resolve allegations of corporate criminal activity.”
“I agree that such resolution vehicles, which are a prominent feature of the U.S. criminal justice system including in FCPA enforcement actions, are not suitable given the lack of transparency in such agreements including the lack of judicial oversight. I can only hope that the U.S. Department of Justice sees the wisdom of your decision and likewise abolishes such agreements as I have advocated.”
Koehler said he also agrees with the Minister of Justice’s position that if deferred prosecutions are imported into the UK, “there should be judicial involvement from an early stage whereby the proposed DPA is considered at a preliminary hearing before it returns for final judicial approval.”
U.S. deferred prosecution agreements lack such a feature.