Advantages and Disadvantages of a DPA Scheme

 

Nyman Gibson Miralis | July 2017   

Subject: Deferred Prosecution Agreements

Keywords: deferred prosecution agreements, white collar crime, the introduction of a DPA scheme in Australia, protection to whistleblowers.

Australia is continuously striving to improve its approach towards combatting corporate white collar crime. One new approach being considered is the introduction of deferred prosecution agreements (DPAs).

These instruments, which are designed to facilitate self-reporting by corporations and encourage whistleblowers to come forward, are already being utilised with some success in the United Kingdom and the United States of America.

However, there are numerous pros and cons associated with the introduction of a DPA scheme in Australia, as set out in the Attorney-General’s Department public consultation paper on the issue, titled Improving Enforcement Options for Serious Corporate Crime: Consideration of a Deferred Prosecution Agreement scheme in Australia.

We address the key advantages and disadvantages below.

What is a DPA?

In its broadest terms, a DPA is a negotiated agreement between a prosecutor and corporate defendant, akin to what is frequently colloquially referred to as a “plea deal.” The circumstances in which a DPA could be offered would be at the discretion of the prosecution.

Generally, the prosecution would offer, as the name suggests, the deferral of a prosecution in return for compliance with a number of strict terms and conditions, which may include:

  • Full cooperation with any ongoing investigation.
  • The admission of agreed facts.
  • The implementation of an internal program to promote and ensure future legal compliance.
  • The payment of a fine or penalty.

Unsurprisingly, if the terms of the DPA are breached, the prosecution can reopen and proceed with the case.

Key advantages of a DPA

There are many pros of participating in a DPA scheme.

 

These include:

  • Improving the ability of law enforcement agencies to identify and prove corporate crimes, by relying on information provided during the DPA process. This is particularly important in an environment where corporate crimes, by their very nature, can be difficult to establish or even detect unless a whistleblower or somebody in the know provides information to the Authorities
  • Facilitating compensation for victims of corporate crimes. By securing the guaranteed payment of fines through the DPA process, lengthy court battles which might result in low or no penalties can be avoided, and victims can receive payouts much more quickly and reliably.
  • Saving government funds and resources by avoiding lengthy and protracted legal proceedings. Prosecuting matters requires the provision of a detailed and lengthy dossier by investigators such as the Australian Federal Police (AFP) to the Commonwealth Department of Public Prosecutions (CDPP) before proceedings can commence. Not only does this process take significant time and resources, but given the opaque nature of many white collar crimes, there may simply not be enough evidence to proceed to a prosecution. This will also mean that government resources are free to focus on more significant and egregious wrongdoing.
  • Encouraging companies to self-report wrongdoing in hopes of avoiding prosecution. Associated with this is the potential trickle-down effect that companies will provide greater protection to whistleblowers who come forward.
  • Avoiding the “whole company” effect of a successful prosecution – not only the wrongdoers are affected, but employees, shareholders and even trading partners could suffer significantly.
  • Negotiated settlements are already being used with some effect by agencies such as the corporate watchdog ASIC in relation to certain white collar crimes under the Corporations Act 2001 (Cth). The expansion of this approach across all areas of white collar crime would provide increased coherence in Australia’s legal framework

What are some of the disadvantages of a DPA?

On the flip side, there are also disadvantages associated with the introduction of DPAs in Australia.

The main ones include:

  • Successful prosecution remains the key deterrent for individuals and companies to avoid criminal behaviour. If DPAs are available, high net worth individuals and companies may be prepared to commit crimes knowing that they will likely be referred to a DPA structure, and consider the need to pay the resultant fine simply as the cost of doing business.
  • It could be perceived as inequitable to allow corporate wrongdoers to participate in a DPA scheme without permitting others charged with crimes, especially individuals operating without motives of financial gain, to have the same opportunity to avoid prosecution.
  • There may be insufficient incentive to guarantee self-reporting, particularly in circumstances where the offer to participate in a DPA remains at the discretion of the prosecutor. Companies and individual employees may be concerned about this uncertainty and prefer to keep silent rather than risk “coming clean” without the guarantee that a DPA will be on the table at the end of the process.

Conclusion

As with many aspects of public policy, there are points in favour of and against the introduction of DPAs, although on balance it would seem that there are more advantages related to the introduction of DPAs than disadvantages. It will certainly be interesting to see what policy outcomes the responses to the paper will elicit.

 How can Nyman Gibson Miralis assist you with white collar crime?

Our criminal defence lawyers specialise in all aspects of white collar crime, and have both the knowledge and experience to provide you with expert legal advice in relation to your charge/case. If you need assistance from a legal expert in relation to white collar crimes, contact one of our criminal defence lawyers to arrange a consultation.