Remediation agreements, known as deferred prosecution agreements in the United States and United Kingdom, are a new tool for enforcing and resolving corporate crime in Canada. Remediation agreements are made between the Crown and an organization charged with a criminal offence, whereby the Crown agrees to suspend prosecution if the organization complies with certain terms and conditions, including providing a statement of facts and admission of responsibility related to the underlying misconduct; forfeiting property, benefits or advantages obtained from the underlying conduct; and agreeing to pay fines or reparations, among other things.

Prosecutors may invite an accused organization to negotiate a remediation agreement only if they are satisfied that it is in the public interest and appropriate in the circumstances. The Criminal Code sets out several factors that prosecutors may consider to determine this, including the circumstances in which the underlying misconduct was brought to the authorities.

Negotiated remediation agreements are subject to court approval. Courts will approve a remediation agreement if they are satisfied it is in the public interest and its terms are fair, reasonable and proportionate to the underlying misconduct.

Upon receiving court approval, prosecution against the accused organization is stayed, subject to satisfaction of the terms of the remediation agreement. Approved remediation agreements, including the statement of facts and admission of responsibility, are publicly available, subject to a court sealing the record, and may be admissible as evidence in other matters related to underlying misconduct

A Helpful Update to Canadian Enforcement

Remediation agreements are a welcome addition to Canada's enforcement landscape. Prosecuting corporate crime often involves complex legal issues and substantial amounts of financial and business records that may require specialized review. As a result, prosecutions can be prohibitively expensive and slow. This concern has been exacerbated since the Supreme Court of Canada (SCC) set out ceilings for what constitutes a reasonable amount of time to bring an accused to trial in R. v. Jordan in 2016, which has resulted in charges being permanently stayed in several prosecutions against individuals for corporate criminal offences.

Remediation agreements also allow organizations to cooperate with enforcement authorities to gather evidence related to individuals most responsible for the underlying misconduct, leading to more efficient and effective prosecutions.

Additionally, by including how misconduct was discovered as a consideration about whether to negotiate a remediation agreement, the Criminal Code encourages organizations to self-report misconduct. In other jurisdictions, such as the U.S. and U.K., an uptick in self-reporting has been associated with increased detection and remediation. While there is still no formal credit system for self-reporting non-competition offences in Canada, remediation agreements provide more incentive for self-reporting than previously existed in Canada and are a step toward more modern enforcement.

Business with Government

Remediation agreements are especially important for organizations that do business with government. Pursuant to a suite of policies known as the Integrity Regime, any organization convicted of a corruptionrelated offence is debarred from contracting with the federal government for 10 years, or five years if an Administrative Agreement is entered into, and simply being charged with a corruption-related offence may result in an 18-month debarment.

Additionally, other jurisdictions and certain financial institutions, such as the World Bank, have similar debarment regimes that may be triggered by a conviction of a corruption-related offence under Canadian law. Because remediation agreements do not result in a conviction, organizations may resolve criminal charges without debarment consequences.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.