A Quick Walk Though Negotiated Settlements in Criminal Proceedings

Last year Southwark Crown Court approved the terms of a Deferred Prosecution Agreement (DPA) in respect of Standard Bank Plc which resulted in the suspension of criminal proceedings brought by the Serious Fraud Office (SFO) against the bank for failing to prevent bribery in relation to a US$ 6 million payment made by its former sister bank in Tanzania to a local partner. Under the terms of the DPA, Standard Bank was ordered to pay fines compensation and costs, to cooperate with the SFO, subject itself to independent review of its anti bribery and corruption policies and implement recommendations of the reviewer. Provided Standard Bank complies with the terms of the DPA it will avoid prosecution.

In the past prosecutors have struggled to prove corporate criminal liability for many types of business crime, especially in the case of larger companies. This is due to the“Identification Principle” requiring proof that offences were committed at board level with the relevant “criminal” state of mind. DPA’s have been in operation in the USA for many years but were introduced to the UK in 2014 as a way of helping Prosecutors, such as the SFO, satisfy political and public demand to hold companies to account for serious misconduct.

DPA’s are not available for individuals, but people wishing to avoid being convicted of a crime have a number of other options. Many plead not guilty and work towards being acquitted in court. For minor offences a person may seek to persuade the prosecutor that criminal proceedings against them are not in the public interest or that regulatory proceedings can be brought instead. Some may also agree to plead guilty to a less serious offence in return for the prosecution dropping a more serious one. In serious cases, a person may be invited to enter into an agreement with a prosecutor to assist them in exchange for immunity, a reduced sentence or agreement not to use certain evidence in court.

Negotiated settlements can sometimes be a way of avoiding a worse outcome and achieving certainty and a conclusion of proceedings at an earlier stage than might otherwise be possible. That can be an attractive prospect for a company with an eye on its long term business interests or an individual who wants to put their  past mistakes behind them as soon as possible. Unfortunately there is no guaranteed outcome. If negotiations are unsuccessful or either side later resiles from the agreement, information provided at an earlier stage is likely to have yielded material to support a prosecution. If the conduct under investigation took place in a  number of countries it is also possible that even if proceedings are settled in the UK, the agreement does not put a stop to cases elsewhere , and civil suits might follow which can risk leading to the unpicking of what appeared to be watertight agreements.

Rarely is a speedy or risk free exit to be found from a probe into serious forms of business crime, but with cool headed consideration of all the relevant evidence and circumstances it is possible to pick the best solution and develop a clear strategy to achieve it.

This article was first published in Canary Wharf Magazine.