A new enforcement mechanism, previously under consultation and now contained within the Crime and Courts Bill 2012-2013, is designed to give companies more confidence to admit their part in crime without opening themselves up to criminal prosecutions.
Whilst not presently proposed for tackling regulatory crime, voices within the environmental industry have called to make this mechanism also available to regulators to deal with certain environmental offences. Whilst this could open another avenue for dealing with such offences, businesses should be warned that the suggestions could still leave them vulnerable to prosecution. Concerns have also been raised that if this mechanism is extended to all environmental offences this could leave the civil sanctions regime redundant in tackling this area.
What is a DPA?
The Ministry of Justice recently published a consultation paper on deferred prosecution agreements ("DPAs") and the Government has now provided its response. A DPA is an agreement between a prosecutor and a commercial organisation that the prosecutor will initiate but not proceed with criminal charges if the business successfully complies with agreed terms and conditions stated in the DPA. Interestingly, a DPA would have to be approved by the Crown Court for it to come into force, raising questions as to how workable this would be in practice.
The DPA could include payment of a financial penalty, restitution for victims and measures to prevent further offending. If, at the end of the specified period, the prosecutor is satisfied the organisation has fulfilled its obligations, there will be no prosecution. DPAs would not be available to individuals.
What would DPAs be used for?
At the moment, the proposals focus on making DPAs available for corporate economic offences, such as fraud, bribery and money laundering, and the draft Bill does not cover regulatory crime. However, it is being mooted within the industry that a DPA may be particularly useful for regulators in dealing with certain environmental offences, such as large-scale waste offences where the proceeds of crime could be recovered, pollution cleaned up and victims compensated.
Whilst fulfilling the conditions of a DPA would not result in a criminal conviction it should be noted that it would involve admission by the organisation of certain facts and wrongdoing which, in some cases, could contribute to a criminal conviction in the event that the DPA is not complied with. It is also likely that DPAs would be published, giving rise to commercial considerations and potential adverse publicity. Therefore there are still dangers for businesses in engaging in a DPA.
Does this sound like civil sanctions?
Questions have also been raised as to where this would leave the civil sanctions regime. The civil sanctions regime has been used by the Environment Agency since January 2011 against organisations that have breached environmental legislation as an alternative to bringing criminal prosecution. In a previous edition of this newsletter (please click here for our previous newsletter), we reported on how civil sanctions are being considered in an ever-increasing number of cases, potentially resulting in streamlined regulation of environmental obligations. Careful consideration must therefore be given to whether use of DPAs is appropriate when a seemingly effective alternative to environmental prosecutions is already available.
What is the future for DPAs?
Whilst there are certainly potential benefits to introducing DPAs for environmental offences, both for regulators keen to target their prosecution resources towards the most serious cases, and for organisations anxious to avoid the ramifications of a criminal prosecution and conviction, businesses should remain on their guard that they may not be the answer to suitable alternatives to prosecution and could trespass into areas which already target this.
Whilst there is presently no suggestion of extending DPAs to regulatory crime, we will continue to monitor the passage of the Bill through Parliament and keep you appraised of any developments.
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.
