US-style plea bargaining system takes off as SFO secures first DPA

Lord Justice Leveson has approved the Serious Fraud Office's (SFO) first deferred prosecution agreement (DPA) in a watershed moment for criminal justice.

First introduced last year, DPAs allow businesses which admit to involvement in corporate crime the possibility of avoiding a criminal prosecution if they meet strict conditions agreed by a judge.

The facts of the DPA concern UK-based ICBC Standard Bank Plc and a failure to prevent corrupt payments to officials of the Tanzanian government.

The fine of £16.8m was accompanied by disgorgement of the profits of the transaction, compensation to Tanzania, and an agreement to pay the SFO's costs.

According to legal experts, the fine agreed between the bank and the SFO was said to be at the higher end of the range available.

Jessica Parker, a partner at Corker Binning, observed that while lawyers will be considering the detailed terms of the DPA, it was notable that the investigation had remained confidential until the DPA was announced last Friday.

'This is a significant advantage of this type of negotiated justice,' said Parker. 'The publicity surrounding conduct is substantially reduced compared to a full scale investigation and prosecution.'

Barry Vitou, a partner and head of global corporate crime at Pinsent Masons, expected this to be the first of many DPAs to come.

'Once companies understand how they work in practice, more are likely to follow suit - the SFO has indicated that there may be another DPA before the end of the year,' he explained.

Vitou added that getting this DPA over the line was an important milestone for the SFO and followed its first successful LIBOR prosecution last August.

'There has been fairly widespread concern that the US-style plea deals present a way for big companies to simply "buy their way out of trouble",' said Vitou.

'The bar in the UK will, however, be set much higher - a key difference here is that judges will independently assess DPAs, and will only sign off on them if they are in the interests of justice.'

The Pinsent Masons partner opined that DPAs may also prove to be effective in preventing the collateral damage to multiple parties, such as investors and employees, which typically follow a prosecution.

'A full scale prosecution could see the company lose its contracts with public sector bodies, for instance,' he continued.

Vitou added: 'The DPA regime underscores that criminal investigations and corporate resolutions remain firmly on the agenda, as they can offer greater speed and certainty than what can be lengthy, costly and adversarial litigation.'

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD