Deferred prosecution agreements in Europe

Crispin Rapinet, Francesca Rolla, and Antonin Lévy

The global increase in white-collar investigations has led prosecutors in Europe to look for new ways to tackle corporate criminality. Here’s where the European DPA landscape is heading.

Deferred prosecution agreements, or DPAs, are a growing part of Europe’s toolkit for dealing with economic crime. But this acclimatization of European legal systems and enforcement authorities has been gradual, and it remains so. It’s 23 years since the U.S. Department of Justice (DOJ) concluded the first corporate DPA in New York.

The UK reached its first DPA in 2015, followed by three more. France reached its first convention judicaire d’intérêt public (CJIP), equivalent to a DPA, in November 2017. And in Italy, corruption reforms have led to negotiation and cooperation with enforcement authorities becoming part of legal culture.

A powerful tool for prosecutors in the UK

The UK’s adapting an enforcement mechanism that has long been central to the work of U.S. authorities like DOJ and the Securities and Exchange Commission followed criticism of the country’s pre-existing framework for combatting corporate crime.

In his 2010 judgment in the case of Innospec, then Lord Justice Thomas criticized the use of opaque plea agreements and civil recovery orders by the UK Serious Fraud Office (SFO). Likewise, in BAE Systems, the SFO’s decision to indemnify BAE for past offenses as part of a plea agreement caused public controversy. For companies, too, negotiated plea agreements failed to offer certainty while a full criminal prosecution could represent a threat to survival.

The DPA regime allows prosecutors to enforce corporate sanctions while avoiding the pitfalls of a lengthy criminal trial and the detrimental effect of prosecution on the company. The process can be seen in action in the £497m DPA with Rolls-Royce, approved in January 2017.

Unlike in the U.S., under the UK’s DPA regime, a High Court judge must decide the agreement is just and the terms are fair, reasonable, and proportionate. Also unlike in the U.S., DPAs don’t apply to individuals in the UK. The Code of Practice emphasizes the responsibility of companies to provide evidence to allow the prosecution of individuals to continue concurrently to the DPA.

Indications point toward DPAs becoming a feature of the UK’s approach to tackling bribery and corruption. And continued judicial support indicates such instruments are not going anywhere soon — as Sir Brian Leveson, Head of the Queen’s Bench Division, said in June, they are “now a legitimate part of our armory to combat corruption.”

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