In the US and UK schemes, material disclosed during DPA negotiations may be used in future criminal or civil proceedings against the defendant. If evidence provided during negotiations was not able to be used in further proceedings, negotiations for a DPA could be viewed by a defendant as a way of rendering such evidence unavailable for use in future prosecutions. This may provide a perverse incentive for a defendant who has committed wrongdoing to enter negotiations for a DPA. Such a defendant may subsequently terminate the negotiations and thereby avoid being held accountable for their misconduct. Conversely, allowing any details disclosed by the defendant to be used subsequently against the defendant potentially puts the state in a powerful bargaining position, where it is able to coerce a company to accept the terms of the DPA (a criticism that has been levelled at the US scheme). This may create a disincentive for a corporate defendant to be full and frank in its disclosure. Q7: How should DPA negotiations be structured? Q8: What factors should be considered in agreeing a settlement? Q9: Should material disclosed during negotiations be available for criminal and/or proceedings? Content of a DPA In order to promote public confidence, an Australian DPA scheme could require the terms of agreements to be in the public interest and to be fair, reasonable and proportionate. Penalties would need to be appropriate and proportionate. Depending on the circumstances of the particular case, a DPA include: a statement of facts relating to the alleged offence a warranty as to the accuracy of the information provided during the negotiations a high-level guarantee that the parties enter into the agreement in good faith an acknowledgement of responsibility for the conduct and that if the defendant commits similar conduct during the period of the agreement that it may be prosecuted for any crime including that which is the subject of the agreement an obligation to cooperate with any current or future investigation the consequences for the defendant if it engages in further misconduct a prohibition on the defendant from making factual representations contradictory to those in the agreement requirements such as: payment of financial penalties payment of the reasonable costs of the prosecution compensation to victims disgorgement of any profits made from the misconduct, and/or garnishing of executive salaries or non-payment of bonuses. implementing or improving a corporate compliance program, and/or an expiry date. If an Australian DPA scheme was to be developed, consideration would need to be given to use of penalties imposed by an agreement.
In the US and UK schemes, material disclosed during DPA negotiations may be used in future criminal or civil proceedings against the defendant. If evidence provided during negotiations was not able to be used in further proceedings, negotiations for a DPA could be viewed by a defendant as a way of rendering such evidence unavailable for use in future prosecutions. This may provide a perverse incentive for a defendant who has committed wrongdoing to enter negotiations for a DPA. Such a defendant may subsequently terminate the negotiations and thereby avoid being held accountable for their misconduct. Conversely, allowing any details disclosed by the defendant to be used subsequently against the defendant potentially puts the state in a powerful bargaining position, where it is able to coerce a company to accept the terms of the DPA (a criticism that has been levelled at the US scheme). This may create a disincentive for a corporate defendant to be full and frank in its disclosure. Q7: How should DPA negotiations be structured? Q8: What factors should be considered in agreeing a settlement? Q9: Should material disclosed during negotiations be available for criminal and/or proceedings? Content of a DPA In order to promote public confidence, an Australian DPA scheme could require the terms of agreements to be in the public interest and to be fair, reasonable and proportionate. Penalties would need to be appropriate and proportionate. Depending on the circumstances of the particular case, a DPA include: a statement of facts relating to the alleged offence a warranty as to the accuracy of the information provided during the negotiations a high-level guarantee that the parties enter into the agreement in good faith an acknowledgement of responsibility for the conduct and that if the defendant commits similar conduct during the period of the agreement that it may be prosecuted for any crime including that which is the subject of the agreement an obligation to cooperate with any current or future investigation the consequences for the defendant if it engages in further misconduct a prohibition on the defendant from making factual representations contradictory to those in the agreement requirements such as: payment of financial penalties payment of the reasonable costs of the prosecution compensation to victims disgorgement of any profits made from the misconduct, and/or garnishing of executive salaries or non-payment of bonuses. implementing or improving a corporate compliance program, and/or an expiry date. If an Australian DPA scheme was to be developed, consideration would need to be given to use of penalties imposed by an agreement.
Deferred-Prosecution-Agreements-Discussion-Paper.docx