The directors of the Serious Fraud Office and Public Prosecutions have published a joint code of practice on the use of deferred prosecution agreements.
Deferred prosecution agreements become available to prosecutors in the UK from beginning on February 24, 2014.
A deferred prosecution agreement is an agreement reached under judicial supervision between the prosecutor and an organization.
The agreement allows a prosecution to be suspended for a defined period provided the organization meets certain specified conditions.
Deferred prosecution agreements will only apply to organizations in cases of economic crime.
“At present, when a company is convicted of a criminal offense, a court can impose a fine or put it out of business by winding it up,” said SFO director David Green. “Both these outcomes can cause collateral damage to employees and shareholders who may be blameless.”
“Deferred prosecution agreements avoid that collateral damage and provide a welcome addition to the prosecutor’s tool kit for use in appropriate circumstances. But deferred prosecution agreements are not a panacea, nor are they a mechanism for a corporate offender to buy itself out of trouble.”
“The most important features of the deferred prosecution agreement regime outlined in the code are judicial oversight, and unequivocal cooperation from the corporate. Prosecution remains the preferred option for corporate criminality”.
Alison Saunders, director of Public Prosecutions, said that deferred prosecution agreements “provide prosecutors with additional powers in the fight against fraud and economic crime.”
“Whilst the circumstances appropriate to the use of deferred prosecution agreements may be quite rare, the guidelines published today set out our approach to this new legislative function in an open and transparent way.”
Conditions attached to a deferred prosecution agreement may include disgorgement of profits, payment of a fine, compensation for victims and costs, cooperation in any prosecution of individuals; and implementation of a compliance program, if necessary with a monitor appointed, the prosecutors said.
The prosecutors said that a deferred prosecution agreement may be appropriate where the public interest is not best served by mounting a prosecution.
Entering into the agreement will be a fully transparent public event and the process will be approved and supervised by a judge, they said.