International - Written by on Wednesday, November 2, 2011 0:48 - 0 Comments

View from accross the pond: UK Deferred Prosecution Agreements – you don’t need them when UK has a defence

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We disagree with the headline by the way.

Continuing our series of comment on the UK proposals to implement a US style Deferred Prosecution Agreement regime today we publish by kind permission the views of Professor Mike Koehler, a leading expert on the FCPA and other anti-corruption laws and initiatives.

Professor Koehler has testified before Congress on the FCPA and he is also a frequent speaker before business and academic audiences.

Leading law reviews and journals have published Professor Koehler’s scholarship and he is a frequent featured source on the FCPA and related topics in various media including the Wall Street Journal, New York Times, Reuters, Time, CNN, BBC, and Al Jazerra.

Professor Koehler’s expertise and views are informed by a decade of FCPA practice experience at a leading international law firm during which he conducted FCPA investigations around the world, negotiated resolutions to FCPA enforcement actions with government enforcement agencies, and advised clients on FCPA compliance and risk assessment.

Mike also writes the excellent and well known FCPAprofessor.com blog (one of our recommended daily reads).  We don’t share Mike’s view on this one.  But this is all about airing all views and having an active debate.

By Michael Koehler

This previous post discussed U.K. plans to introduce U.S.-style corporate plea bargains, including deferred prosecution agreements. Among other things, the post mentioned an October 17th meeting with U.K. prosecutors at Pinsent Mason’s London office.

thebriberyact.com summarizes the meeting and nicely frames the issues  here and here.

The post states as follows.  “We think that the need for DPA legislation is obvious. Its absence has often been remarked upon by the Director of the SFO and for very good reason. It is a serious hole in the UK law. Its absence has a chilling effect on the attempts to ensure that ethical attitudes become a permanent feature of corporate life in all companies, be they International, SME or small.”

Others have shared their views on whether the U.K. should adopt U.S. style alternative resolution vehicles and, if so, how.

Thomas Fox at the FCPA Compliance and Ethics Blog (here) believes “that the ability to enter into a DPA is a powerful tool that advances the interests of prosecutors, the judiciary and the public.”  Fox states that “the primary reason for both the prosecution and a company which violates the Bribery Act entering into a DPA is certainty.”

Ross Parlane of McGuire Woods writing at The Bribery Library (here)  states as follows.  “There are a number of benefits to be gained from giving UK prosecutors the power to negotiate DPAs.  Certainly the cost and time involved in investigating offences would be significantly reduced, which is good news for the public purse.  Further, a well negotiated DPA that gives proper attention to remediation (e.g. through monitoring) as well as to punishment, has the potential to effect a permanent positive change in the culture of an organisation.”  Yet Parlane states (and identifies) that “there are a number of tricky issues that need to be resolved before the use of deferred prosecution agreements can be adopted in the the U.K.”

Michael Volkov, writing at thebriberyact.com (here) notes that ”for UK policymakers, the balance between judicial review and prosecutorial discretion is one which has to be resolved before any new policy can be enacted.”

Let me contribute to the dialogue by posing this question.  Why does a law with an adequate procedures defense require the third option of a deferred prosecution agreement – the first two options being prosecute vs. not prosecute?

If a corporate has adequate procedures, but an isolated act of bribery nevertheless occurs within its organization, the corporate presumably would not face prosecution under the Bribery Act.  Seems like a reasonable result.  In other words, no need for the third option in such a case.

On the other hand, if a corporate does not have adequate procedures (i.e. has no committment to anti-bribery compliance) and an act of bribery occurs within its organization, it presumably would face prosecution under the Bribery Act.  Seems like a reasonable result.  Does a third option really need to be created for corporates who do not implement adequate procedures?

Because the FCPA does not have an adequate procedures / compliance defense (at least not yet), the same analysis does not apply.

 

 

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