The application of the criminal law to modern business in the UK has highlighted a number of deficiencies with the current criminal justice system. The recent past has, however, seen a concerted effort on the part of UK policy and law makers to demonstrate that the UK is capable of securing efficient and effective redress for corporate offending.

Briefly, these measures have included: (i) the introduction of guidelines on plea negotiations; (ii) guidance on the use of civil recovery powers; (iii) the introduction of the Bribery Act 2010 (Act); and (iv) the proposed creation of the Competition & Markets Authority. This year will also see legislation to introduce Deferred Prosecution Agreements (DPAs).

The prevailing view is that with the severe penalties (criminal conviction and the potential for debarment) and few benefits, corporates are not inclined to self report wrongdoing. A key driver in UK self reporting cases to date has been the overlap with foreign regulatory or criminal jurisdictions. Such jurisdictions are typically flexible and mature in their approach to managing the issues raised in such cases. Prior to a number of recent corruption related cases brought by the Serious Fraud Office (SFO) there was little meaningful enforcement in the UK of the sort that would naturally fit within the scope of a DPA regime. A majority of the SFO cases involved parallel US or World Bank action. The policy aims behind DPAs include the enabling of greater cooperation between international crime agencies and to provide certainty and finality within a shorter time frame.

What then are the potential pitfalls for DPAs in achieving the stated aims for their introduction in the UK?

Jan-Mar 2013 issue

Kirkland & Ellis International LLP