Canada Should Consider Using Deferred Prosecution Agreements
A Deferred Prosecution Agreement (“DPA”) is a discretionary tool available to prosecutors for the resolution and disposition of corporate criminal conduct. Essentially it is an agreement between a criminal prosecutor and an indicted accused to forgo prosecution of the crime with which the accused is charged on the understanding that the accused will fulfill the obligations imposed on it by the DPA. The obligations can involve the accused making restitution to victims, paying penalties and investigation costs and undertaking remedial work to minimize the risk of the wrongdoing being repeated. If the accused complies with its obligations the prosecutor agrees not to prosecute the accused, meaning there is no finding of guilt and no conviction registered against it. If the accused fails to comply, the prosecutor is free to prosecute the accused for the alleged crime. In all cases, the rationale for a DPA is that the public interest would be better served without proceeding with a prosecution.
For many years now, DPAs have been used by the U.S. Department of Justice in criminal proceedings involving corporate offenders who have committed financial and corruption offences. Prosecutors will only consider proceeding by way of a DPA when the entity has: (1) self-reported the wrongdoing to law enforcement authorities; (2) completely and honestly assisted with the subsequent criminal investigation; and (3) acted quickly to remediate the cause of the offence.
In 2013, the United Kingdom enacted the Crime and Courts Act permitting prosecutors to enter into DPAs. Its first DPA was approved by the British courts late in 2015, and involved Standard Bank PLC, which admitted that it had bribed foreign government officials contrary to s.7 of the Bribery Act. Here is a copy of that DPA.
Canada does not have any formal DPA policy applicable in corporate criminal prosecutions. That is probably because such prosecutions in Canada have been rare. But that is changing. Subsequent to the 1992 Westray mine-disaster, there is now a greater inclination to hold corporations accountable for alleged criminal wrongdoing. Consequently, corporations have been successfully prosecuted for criminal negligence causing the deaths of their employees. In addition, SNC-Lavalin is the fourth company to be charged under Canada’s anti-foreign corruption legislation.
Parliament has also simplified corporate prosecutions. Bill C-45, enacted over 10 years ago, has eased the burden on the Crown in the prosecution of corporations through the elimination of the “identification doctrine”. It required the Crown to prove corporate fault through the wrongful acts or omissions of senior decision-makers. Now, through amendments to the Criminal Code, the wrongful acts or omissions of employees who have only operational responsibilities – like a manager or supervisor – are sufficient to engage corporate criminal liability.
It is because of the C-45 legislation that a strong case can be made for the use of DPAs in Canada. Responsible corporations invest in policies, procedures and training that foster a compliance culture. But this does not insulate corporations from criminal liability. As examples, if a well trained supervisor inexplicably acts contrary to his or her responsibilities causing the death of an employee in the workplace, or a regional manager well-versed in the employer’s anti-corruption policies and procedures nevertheless bribes a local foreign official, under the C-45 amendments the corporation is exposed to criminal liability. Satisfactory corporate compliance policies and procedures and robust employee training may act as mitigating factors when it comes to sentencing, but they will not exculpate the corporation.
DPAs can contribute positively to the administration of justice in circumstances wherein the stigma of criminal conviction may not be warranted, such as when the corporation: (1) has no previous convictions; (2) has satisfactory compliance systems; (3) has self-reported the criminal conduct; (4) has fully co-operated with the criminal investigation; and, (5) has undertaken remedial steps to avoid a repeat. Circumstance (2) has the added benefit of limiting the risk of corporate wrong doing and contributing to overall compliance with our laws.
Within the context of financial crimes, the federal government’s Integrity Framework provides another compelling reason to consider the use of DPAs. It prohibits convicted Canadian corporations and their affiliates from bidding for government contracts for at least 5 and in some cases 10 years. In the circumstances described above, that harms, not serves, the public interest.