Combatting corporate crime: deferred prosecution agreements

On 6 December 2017 the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 was introduced by the government in the Senate. If passed by the Parliament, the Bill will establish a deferred prosecution agreement (DPA) scheme in Australia.

The Senate Legal and Constitutional Affairs Legislation Committee has now recommended that the Bill be passed.

The DPA scheme provides a new mechanism for addressing serious corporate crime in Australia.

The DPA scheme is designed to address some of the challenges in detecting and addressing serious corporate crime by encouraging corporations to self-report misconduct by offering greater certainty of outcome when compared to litigation, and an opportunity to avoid some of the reputational and financial costs associated with lengthy criminal investigations and trial

Under a DPA scheme, where a company engages in a serious corporate crime, prosecutors would have the option to invite the company to negotiate an agreement to comply with a range of specified conditions. The terms of the DPA would likely require the company to cooperate with any investigation, pay a financial penalty, admit to agreed facts, and implement a program to improve future compliance. A company would not be prosecuted in relation to the matters outlined in the DPA where the company fulfils its obligations under the agreement.

A corporation may also choose to seek a DPA to, for example:
a. assist the corporation to proactively identify and address wrongdoing within the corporation
b. support the directors’ compliance with their statutory and fiduciary duties to act in the best interests of the corporation, and
c. limit corporate criminal liability by proactively identifying misconduct and preventing further offending.

The Attorney-General’s Department has developed a draft code of practice in consultation with key government agencies. The draft code provides guidance on the intended operation of the DPA scheme and outlines the DPA process for industry, from the point of entering into DPA negotiations to fulfilling the terms of a DPA.

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