How to more effectively deal with white collar crime is an issue that
Australian legislators and law enforcement are increasingly focused on. A
particular area of consideration is whether there is some merit in introducing
deferred prosecution agreements (DPAs) to Australia.

DPAs have already been implemented relatively successfully in the United
States and the United Kingdom, and given the similarities in our legal systems,
may be suitable for introduction to Australia.

The pros and cons of introducing DPAs have been considered in some
detail by the Attorney-General’s Department in its public consultation
paper Improving Enforcement Options for Serious Corporate Crime:
Consideration of a Deferred Prosecution Agreement scheme in Australia.

So how might a DPA scheme be structured and work in practice in
Australia?

What is a Deferred Prosecution Agreement / DPA scheme?

The purpose of a DPA scheme is to encourage corporate entities to
self-report potential liabilities and white collar crimes, as well as
supporting whistleblowers to report misdeeds within their organisations.

A prosecutor may, at their own discretion, negotiate a DPA with a
defendant. Although the offered content of each DPA is up to the individual
prosecutor, generally the DPA involves the deferral of prosecution for an
alleged white collar crime.

In return, the corporate defendant must comply with certain
requirements, generally including cooperation with ongoing investigations,
agreeing to certain facts (to minimise matters in issue should a trial
proceed), the issue of a penalty, and the requirement to have an internal
system to ensure compliance going forward.

A failure to comply with any agreed conditions may result in the
prosecution case being reopened, or further penalties being imposed.

How would a DPA scheme operate in practice?   

In order to determine how a DPA scheme would work, it is important for
Australian legislators to decide which key elements from other jurisdictions
where DPAs are already in place should be implemented here.

 

1.    What crimes should
be subject to DPAs?

 

As set out in the consultation paper, a DPA scheme would, at least
initially, focus on “serious corporate crime” including fraud, bribery and
money laundering. The Commonwealth Government would need to introduce
legislation setting out which crimes could appropriately be the subject of DPA
offers. One potential difficulty could arise in circumstances where the charges
include state crimes as well as federal crimes – as individual states would not
have the power to draft legislation authorising the offer of DPAs.

 

2.    Who should be
offered a DPA?

 

Another key issue requiring consideration is to whom a DPA might be
offered. The paper notes that in the UK, only corporate entities can
participate in a DPA. In the United States, individuals or corporations can
enter such agreements. The Attorney-General’s Department has stated that
although there is some merit in following the UK model, on balance the intended
deterrent effect of the DPA scheme is best achieved by permitting individuals
to participate. By disallowing individual participation, it could
disincentivise people who may have some personal liability or involvement in
illicit activities from reporting corporate misconduct.

By the same token, Australian legislators will need to give serious
consideration to whether they wish to implement a system whereby big companies
could effectively buy their way out of difficulties by meeting large fines and
penalties, in return promising to implement weak or vague training or education
regimes.

 

3.    The role of the
courts

 

Australia’s Constitution requires that our courts cannot simply sign off
on penalties or outcomes which have previously been agreed between the parties.
Therefore, Australian DPAs would need to be characterised more in the manner of
interim settlement agreements. DPAs would need to be approved by the
Commonwealth Director of Public Prosecutions, with indictments and other
procedural steps filed in the court suspended, and the terms of the DPA
provided for the court file in the event that proceedings need to be
re-enlivened.

The judiciary could also be called upon prior to the offer of a DPA, in
order to provide prosecutors with a view as to whether a DPA would be a
suitable measure or whether the public interest and other factors dictate that
a prosecution should proceed. Alternatively, the prosecutor would at a minimum
need to make an assessment against a pre-determined checklist of factors
determining suitability for the offer of a DPA. Those factors could include:

·        The imperative of preventing future criminal activity and the likelihood
that the offer of a DPA would achieve this.

·        The severity of the alleged offence.

·        The conduct of the company (or individual if this is permitted in
practice) including the history of any prior similar offending.

·        The possibility of disproportionate consequences of prosecution for the
offender or effects on employees, third parties or the public.

 

4.    Policy principles

 

Additional key factors which need to be decided prior to the
implementation of any DPA scheme in Australia include whether negotiated DPAs
should be made public, or whether the content of any material provided during
the course of the DPA could be used for future civil or criminal
proceedings.  These are factors that can best be assessed once preliminary
matters relating to the broader framework of introducing DPAs have been
finalised.

 

Conclusion

While the outcome of the public consultation remains to be seen, there
is certainly much work involved before the specifics and nature of any
practical implementation of DPAs in the Australian legal landscape can be
worked out. An assessment of the implementation of DPA schemes in international
landscapes is likely to provide the best path forward for Australian lawmakers
to determine whether, and how, DPAs should be used in Australia.