The UK’s Serious Fraud Office (“SFO”) Chief David Green has reported a high demand for deferred prosecution agreements (“DPAs”) by companies since the introduction of the DPA law in early 2014. Despite a low number of settlements reached by the SFO thus far, Green reports that both the SFO and courts want to make DPAs work for companies that cooperate and voluntarily self-report misconduct.

DPAs suspend prosecution of companies alleged to have committed fraud, bribery, or another economic crime where the target cooperates, admits wrongdoing, and pays a fine. Although Parliament originally expected UK authorities to reach four DPAs per year when the relevant provisions of Schedule 17 of the Crime and Courts Act 2013 were introduced, the SFO has reached only two settlements to date – one in 2015 with South Africa’s Standard Bank and one this year with an as-yet-unnamed UK company, referred to as “XYZ.”  Green attributed the low figure to the relative newness of DPAs in the UK.

Companies may also find DPAs provide “insufficient incentive” to voluntary self-report misconduct. The UK guidelines require DPA settlements to undergo court review before being awarded and allow a maximum discount of 33% in penalties for companies that cooperate and self-report. Green explained, however, that “the courts …want to make the DPAs work.”  For example, Judge Brian Leveson, the head of the Queen’s Bench Division of the High Court, has overseen both of the two DPA settlements reached by the SFO.  In the second settlement, Judge Leveson agreed that the company’s penalty could be reduced by 50% to encourage other companies finding similar misconduct to come forward to authorities.