Issues in Brief

DOJ Envy? UK Finally Embraces Deferred Prosecutions

Associate General Counsel
June 4, 2013

If imitation is the sincerest form of flattery, the UK is positively infatuated with the United States. Two years ago, the UK essentially copied U.S. anti-corruption laws by adopting the UK Bribery Act—a British version of the Foreign Corrupt Practices Act (FCPA)—to criminalize corporate corruption. Its passage created an initial firestorm of concern that global companies would have to overhaul their anti-corruption programs or face potentially company-crushing penalties for any miscues. Thankfully, that hullabaloo died down as companies quickly realized that their existing FCPA compliance programs were at least sufficient, if not more robust, than the UK Bribery Act demanded.

DPAs in the UK
The UK has seemingly dusted off its copiers again in the form of newly adopted legislation[1] creating deferred prosecution agreements (DPAs) and allowing their use starting in early 2014. This is good news for global companies operating in the UK because it provides a legal “middle ground” for companies to cure a recognized financial misstep, including bribery, fraud, or money laundering. The U.S. has been using DPAs for years, much more so recently, as a tool to push companies to right their wrongs without resorting to prosecutions. Don’t get me wrong . . . companies are not eagerly jockeying to obtain the next DPA on the block, but given the choice between an expensive, protracted, publicly demoralizing prosecution and a potentially face-saving DPA, most companies would choose the latter.

U.S. and UK DPA Comparison
As expected, there are differences between U.S. and UK DPAs, perhaps most notably that UK judges have early and active roles in them. In the UK, judges must approve DPAs recommended by the DOJ-equivalent Serious Fraud Office (SFO) or the Crown Prosecution Service (CPS). Judges make the determination of whether a company has breached any part of a DPA, whereas in the U.S., the Department of Justice has this authority. Table 1 provides a quick comparison of the major differences between U.S. and UK DPAs (but by no means captures every nuance; consult your own attorneys about this issue).

The Bottom Line
Doing business through the UK just became a little less risky with the adoption of deferred prosecution agreements. Although UK DPAs differ from their American counterparts, both offer a middle ground of relief for companies that may have made or recently identified a legal misstep.


[1] DPAs are included in the Crime and Courts Act 2013 under Schedule 17.

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