DPAs have been available in England and Wales since 24 February 2014. Enacted through Sch 17 of the Crime and Courts Act 2013 (CCA 2013) and accompanied by both a code of practice (the DPA Code) and a new Pt 12 of the Criminal Procedure Rules 2013, a comprehensive, but as yet untested framework is in place. DPAs in the UK differ in some significant respects from their US counterparts; in particular, they require greater judicial oversight and sanction before taking effect. In addition, financial sanctions will not be recouped by the relevant prosecution agency in the UK, but rather by the government’s consolidated fund.

DPA procedure falls into three stages: negotiation; applying to court for approval; and oversight, specifically in relation to breach, variation, termination and completion. Detailed rules contained within CCA 2013, the DPA Code and the Criminal Procedure Rules are summarised below.

The decision to negotiate

The decision to offer a DPA rests with the designated prosecutor. They are available to bodies corporate, partnerships or unincorporated associations – but not individuals. It is a matter for the prosecutor’s discretion alone; a company has no right to request an invitation to enter into a DPA. To offer a DPA, a prosecutor must apply a two-stage test:

  • the evidential stage of the Full Code Test (ie, part of the Code for Crown Prosecutors, issued by the Director of Public Prosecutions) must be satisfied or, alternatively, there must be at least a reasonable suspicion that an offence has been committed and that further investigation would give rise to a realistic prospect of conviction; and
  • the public interest would be served by not prosecuting and by entering into a DPA.


The public interest stage requires consideration of antecedent history; whether the conduct forms part of an established business practice; the existence of, and any improvements to, a corporate compliance system; the level of harm; any failure to notify the authorities of the wrongdoing within a reasonable time; inaccurate, misleading, or incomplete reporting; and the level of cooperation offered.

Of course, the decision to offer a DPA does not exist in a vacuum. Frequently, if a company has self-reported it will also have incriminated individuals. If the Full Code Test is likely to be satisfied with respect to individuals, then it seems reasonable to suppose that this may impact favourably on the decision to offer a DPA to the company. In addition, the DPA Code confirms that significant weight will be attributed to timely self-reporting which is “genuinely proactive” and which discloses otherwise unknown conduct. A failure to verify the information, to provide sufficient information, or indeed, providing an inaccurate or misleading picture will be a factor in favour of prosecution and can lead to a separate prosecution in and of itself.

Although the statutory rules of disclosure are not engaged at this stage, it is the prosecutor’s responsibility to ensure that the corporate has “sufficient information to play an informed part in the negotiations”. The negotiations must be fair and the corporate must not be misled as to the strength of the prosecution case. This ought to include disclosure of any material which might undermine any conclusions drawn by the prosecutor, but it would appear that there is no obligation to disclose any material that might amount to a potential defence to the charge. The corporate is free, however, to make specific requests for disclosure and would be well-advised to do so in appropriate circumstances (CCA 2013 Sch 17, paras 3-4, 11; DPA Code §§ 1-3, 5).

Drafting a Deferred Prosecution Agreement

A DPA must contain a statement of facts relating to the alleged offence and an expiry date by which time the DPA will cease to have effect. The DPA may (but not must) also impose requirements on the corporate, such as: a financial penalty; compensation; a charitable donation; disgorgement of profit; implementation, or improvement, of compliance programmes; co-operation with any investigation; the payment of prosecution costs. The DPA may also impose time limits in which any of the conditions must be fulfilled as well as the consequences of any breach.

Once proposed, terms are agreed between the parties, the prosecutor applies to the Crown Court for a declaration that the DPA is likely to be in the public interest and that the proposed terms are “fair, reasonable and proportionate”.

Following agreement of the final terms, the prosecutor again applies to the Crown Court for a declaration that the DPA is in the interests of justice (this hearing can follow on from the application for approval of the proposed DPA). This application must indicate any differences between the final agreement and the proposed agreement; attach or contain the corporate’s consent; explain why the agreement is in the interests of justice, and why its terms are fair, reasonable and proportionate. There is no requirement for a formal admission of guilt, although the company will be deemed to have admitted the contents of the statement of facts and any key documents referred to within it.

Once approval is obtained, the DPA comes into force. Proceedings for the alleged offence are instituted by preferring the bill of indictment, but are then automatically suspended. While the proceedings are suspended, the company cannot be prosecuted for the offence.

While an application to approve a proposed, or final, DPA will generally be in private, any decision to approve a DPA, and the reasons for doing so, must be given in open court (CCA 2013 Sch 17, paras 2, 5, 7, 8; Crim. P.R. rr 12.2, 12.3, 12.4; DPA Code §6).


A prosecutor may make an application to the Crown Court to determine whether, on the balance of probabilities, the terms have been breached. The court may invite the parties to agree proposals to remedy the failure, or it can terminate the DPA. Any finding and solution must be published, together with reasons for the decision (CCA 2013 Sch 17, para 9).


A DPA may only be varied following an invitation by the court, or in response to an application by the prosecutor for a finding that the variation is necessary to avoid a failure to comply in circumstances that were not, and could not have been, foreseen at the time the DPA was agreed. A court must declare that the variation is in the interests of justice and that the terms of the DPA as varied are fair, reasonable, and proportionate (CCA 2013 Sch 17, para 10).

Discontinuance of proceedings

Criminal proceedings against the company are discontinued once the prosecutor gives notice to the court after the DPA has expired.  Once discontinued, fresh proceedings cannot be instituted unless the prosecutor discovers that the company provided inaccurate, misleading, or incomplete information (CCA 2013 Sch17, para 11).


Financial Penalty

A financial penalty under a DPA is to be broadly comparable to the fine that the court would have imposed following an early guilty plea. Broad discretion is available when considering a financial penalty and hence reductions greater than one-third will be possible, particularly for those companies cooperating with the authorities (in R v Innospec [2010] Lloyd’s Rep FC 462, it was suggested that discounts of up to 50% may be expected in such cases). The starting point, in most cases, will be the Definitive Guideline on “Fraud, bribery and money laundering: corporate offenders”, effective from 1 October 2014.

The process of arriving at the correct sentence begins by placing the defendant into a “culpability” bracket: high, medium or lesser. The next step is to assess the harm. The focus will generally be the amount laundered, profit made, or sum obtained or sought through fraud or bribery. It could also include the cost avoided by the company in failing to put in place effective AML/adequate procedures to prevent bribery.

Once the harm is quantified, then a multiplier is applied to it to reflect the culpability. For example, the starting point for a company of high culpability convicted of a substantive bribery offence will be 300% of the gross profit from the contract obtained, with a range of 250% to 400%. One then turns to the application of common sense factors increasing or reducing the seriousness of the offence and/or mitigating the offence, to adjust the figure accordingly. In practice then, it would seem that the guidelines will, in due course, give effect to Thomas LJ’s portentous observations in Innospec that an appropriate fine in serious bribery cases ought to be “measured in tens of millions” (CCA 2013 Sch 17, para 5).


At the point at which a prosecutor gives notice to the court that the prosecutor does not wish the proceedings to continue, a corporate defendant can be safe in the knowledge that the authorities will not be in a position to pursue confiscation proceedings. This may, no doubt, represent one of the arguments in favour of self-referral with a view to securing a DPA. In light of the availability of disgorgement as a term of a DPA, the extent to which this fact mitigates in favour of setting out on the path towards a DPA remains to be seen, particularly in light of recent developments in the law of confiscation, which mean there may be no practical difference between the sum of profits identified for disgorgement and the sum likely to be arrived at when calculating a company’s criminal benefit during the course of confiscation proceedings.

A new path for corporate prosecutions?

DPAs generally have been welcomed as a practical alternative to the expensive and uncertain trial process. Any controversy attracted over their sole application to corporate defendants has been leavened by the requirement for judicial approval, as compared with their US counterparts. However, it should not be assumed that DPAs will become the norm. To find it in the public interest to propose a DPA to a corporation involved in serious criminal conduct is a significant hurdle. Indeed, the DPA Code states that “the more serious the offence, the more likely it is that prosecution will be required in the public interest”.

Furthermore, if prosecutors faithfully apply the Code of Conduct and seek to incorporate financial terms such as the disgorgement of profits into DPAs, then the gulf in overall financial penalties between those prosecuted but who enter into a plea agreement and those entering into DPAs may not be as great as many anticipate.

However, there is no question that the likely saving in legal costs, the speed with which it is likely to be possible to reach a DPA (as compared to awaiting the conclusion of a full investigation and prosecution) and the associated savings to reputational damage, are still likely to see those approached by a prosecutor to discuss a DPA think long and hard before choosing not to enter into negotiations.

Who will be the first? The ball is firmly in the prosecutors’ court.