US-style deferred prosecution agreements (DPAs) – effectively plea bargains – should provide a powerful weapon in the fight against white collar crime. DPAs offer a better way for the authorities to deal with wrongdoing and for businesses to resolve their exposure to prosecution in appropriate circumstances. The present choice for the authorities, either to prosecute or not, is too unsophisticated for complex financial cases. DPAs offer more flexibility. DPAs also provide businesses with incentives to act ethically: self-report rather than cover up and criminal prosecutions could be avoided in some cases. DPAs still mean penalties for wrongdoing, but they allow for swifter rehabilitation and restitution. They importantly also safeguard jobs where a corporate conviction could spark the demise of a business. The Serious Fraud Office is under pressure to perform, but needs the tools to do the job. DPAs should go a long way to help.
Barry Vitou is a partner at Pinsent Masons, the law firm.
DPAs are another tool in the Serious Fraud Office and Crown Prosecution Service toolbox. They are relatively cheap, quick, and produce money by way of fines and disgorgement. But they do not add a satisfactory degree of foreseeability and certainty for those businesses that self-report crimes. The terms that may be extracted from business on threat of further reputational damage, and the costs of a possible trial may also be very harsh. We may end up with purely financial outcomes for economic crimes committed by business. The US model at which the government casts admiring glances has, during its worst excesses, replaced due process with crime control by negotiation, with the state holding all the trump cards. DPAs are not part of a coherent crackdown on economic crime. Only taking this delinquency seriously, and allotting appropriate resources to its confrontation, will be a satisfactory answer.
Monty Raphael QC is special counsel to Peters & Peters Solicitors.