Articles 18th Dec 2015

Deferred Prosecution Agreements

On Monday 30th November, the President of The Queen’s Bench Division (The Rt. Hon. Sir Brian Leveson) sitting in The Crown Court at Southwark approved this jurisdiction’s first deferred prosecution agreement, upon the application of the SFO in respect of potential proceedings against Standard Bank PLC for failing to prevent bribery contrary to s.7 of The Bribery Act 2010.

In handing down his judgment approving the DPA which had been agreed between the parties Sir Brian Leveson P also made public his judgment of 4th November in which he had indicated his provisional approval of the proposed DPA.

From those judgments the following principles are clear:

  • The DPA must be in the interests of justice.
  • The first consideration in determining this is the seriousness of the conduct as “the more serious the offence, the more likely it is that prosecution will be required in the public interest and the less likely it is that a DPA will be in the interests of justice”.
  • The fact that Standard Bank immediately reported itself to the authorities and adopted a genuinely proactive approach to the matter was the second significant feature in favour of a DPA.
  • Thirdly the fact that Standard Bank had no history of similar conduct involving prior criminal or civil actions against it was another element in favour of the approval of a DPA (the court distinguished prior regulatory enforcement against the Bank brought by the FCA in respect of its inadequate anti-money laundering procedures).
  • The fourth factor which the court had regard to was the fact that the organisation was now a different corporate entity from that which had committed the offence.

The terms of the DPA must be fair, reasonable and proportionate:

  • It must be of sufficient length that the proposed terms are effective and their aims accomplishable
  • The Act favours compensation, which must be commensurate with the loss suffered
  • Disgorgement of profit so as to remove any benefit is specifically encouraged by the statute
  • The requirement to pay a financial penalty broadly comparable to the fine which a court would have imposed is a fourth important feature. In this case the court conducted a careful analysis of the Sentencing Council Guideline and considered the cases of R v Innospec Ltd (26th March 2010 Southwark CC) and R v Thames Water Utilities Ltd [2015] EWCA Crim 960.
  • Co-operation and future corporate compliance are further important features of a DPA.
  • The payment of the prosecutor’s reasonable costs are another legitimate requirement of a DPA.

The court retains control of the process and must “examine the proposed agreement in detail, decide whether the statutory conditions are satisfied and, if appropriate, approve the DPA.”

In what was clearly the court’s express approval not just for the DPA in this case but for the concept of DPAs Sir Brian expressed himself thus in both judgments: “I have no doubt that Standard Bank has far better served its shareholders, its customers and its employees (as well as all those with whom it deals) by demonstrating its recognition of its serious failings and its determination in the future to adhere to the highest standards of banking. Such an approach can itself go a long way to repairing and, ultimately, enhancing its reputation and, in consequence its business.”

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