The Future for DPAs


Sometimes the best ideas just don’t turn out to be as good in practice as they were on paper or in the heads of those who devised them. And, so far, 2019 seems to be the year that deferred prosecution agreements (DPAs) have joined the list of things that haven’t really lived up to their promise. Like certain overpriced footballers and an outgoing prime minister, DPAs have –  so far at least –  failed to live up to expectations. Inevitably, this has led to calls for some quarters for them to be dropped. Based on this year, the most ardent supporters of DPAs would struggle to produce a convincing argument for their continued use, let alone a case for using them more often.

Let’s not forget, this year started with the acquittal of the last of the three Tesco executives charged with fraud in relation to the company’s accounting scandal. Carl Rogberg walking free meant that all three executives had been cleared. Nobody, therefore, had been convicted for the offences that Tesco admitted had been committed – an admission it made when reaching a DPA with the Serious Fraud Office in 2017 in relation to the accounting scandal.

If this problem was not embarrassing enough, it was repeated almost note for note last week. Three Sarclad employees were acquitted at Southwark Crown Court of bribery, three years after the company had agreed a DPA with the SFO in relation to the wrongdoing. Another case of wrongdoing being identified and admitted and another failure to convict any company or individual for it. Hardly the revolutionary approach to justice that the cheerleaders for DPAs would have hoped for when they became part of UK law.

Introduced under the provisions of Schedule 17 of the Crime and Courts Act 2013, which made them available to the SFO and Crown Prosecution Service, DPAs were supposed to be a breath of fresh air, enabling a relatively speedy and efficient conclusion to what could be long-running, complex investigations.  The benefit of them to a corporate entity is still plain to see. However it is the difficulties encountered in translating the admissions made into real and tangible culpability for individuals which will give pause for thought.

Sarclad, following as it does in the footsteps of the Tesco verdicts, raises real questions about the value (or otherwise) of the DPA process. The three Sarclad individuals who were acquitted will undoubtedly be happy about the outcome. The disturbing thing about it is that they are just the latest executives to be proven innocent, even though the SFO and their former employers had agreed there had been wrongdoing.

What must be remembered is that the SFO reached a DPA with Rolls-Royce in 2017 over the large-scale bribery it committed over decades. Rolls-Royce did not self-report its wrongdoing but its cooperation with the investigation led to a DPA being granted and a discount on the financial penalty imposed. Rolls-Royce escaped prosecution yet there was no guarantee the individuals involved would do. Come February 2019 this year, however, the SFO announced it was closing the investigation with no charges being brought against individuals. Like Tesco and Sarclad, this is another DPA-fuelled contradictory situation – the company has openly accepted that wrongdoing was committed but yet again nobody is held to account for it in a court of law.

Such outcomes have prompted fierce criticism. What remains to be seen is whether such criticism – or to be more precise the high-profile failings that provoked the criticism – leads to the SFO becoming more reluctant to use DPAs.

The SFO’s Director Lisa Osofsky has talked at length about the value of corporates cooperating with her agency and the need to speed up investigations.  This could be seen as an indicator of greater use of DPAs in the future. This may appeal to many companies who have little option but to admit wrongdoing: three of the five DPAs granted so far have led to what can only be considered a failure to hold anyone to account, which any company under investigation would be happy to have as an outcome. But as we have seen, this is a far from perfect situation. Alternatively, the dropping of the post-DPA Rolls-Royce investigation may just embolden companies, making them less likely to admit any wrongdoing regardless of whether or not a DPA is on offer.

DPAs may be a swifter course of action than a lengthy investigation and trial. But if they are going to lead to more of the conflicting outcomes we have seen this year, it would be little surprise if DPAs were consigned to the back of the cupboard, like the once-new toy that nobody wants to play with anymore.  Certainly if they are to continue to be offered as a carrot for co-operation, then the SFO needs to up its game if prosecutions of individuals are to follow. On the current evidence, a company may well wish to wait and see if there is a knock on the door rather than invite the SFO over the threshold.


Neil Williams,  Legal Director, Rahman Ravelli

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