On 14th February 2014 the Director of the Serious Fraud Office and the Director of Public Prosecutions published joint guidance on the use of Deferred Prosecution Agreements.
A Deferred Prosecution Agreement is an agreement between the prosecutor and a company or organisation which will be supervised by the Court and allows a prosecutor to suspend a prosecution for a specified period subject to the company meeting certain conditions.
Conditions could include paying a fine, compensation or cooperating with future prosecutions. If a company does not adhere to these conditions, the suspension may be lifted and the prosecution will resume.
Deferred Prosecution Agreements only apply to companies and organisations and can only be used in cases of economic crime. The Code makes it clear that a prosecutor will still have to consider the “full code test” prescribed by the Code for Crown Prosecutors and so consider if the public “would be properly served” if a Deferred Prosecution Agreement was entered instead of prosecuting.
The Director of the SFO, David Green CB QC commented that "At present, when a company is convicted of a criminal offence, a Court can impose a fine or put it out of business by winding it up. 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."
Mr Green however stressed that the agreements are not a “panacea” and cannot be used by companies to “buy itself out of trouble”.
The Director of Public Prosecutions, Alison Saunders 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 for the CPS, the guidelines published today set out our approach to this new legislative function in an open and transparent way."
Deferred Prosecution Agreements will be available to prosecutors from 24th February 2014.
The guidance forms part of a Code of Practice which followed an extensive consultation last year. For more information please click here.
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