The “Orphans” of DPAs: What Fate Awaits Individuals After a “Successful” DPA? | Greece
Ilias G. Anagnostopoulos, managing partner of Anagnostopoulos, discusses the promises and perils of Deferred Prosecution Agreements and their repercussions for individuals.
The attractions of DPAs
Deferred Prosecution Agreements (DPAs) are attractive. Prosecutors favour them as a practical tool to resolve company offences instead of opening lengthy trial proceedings of uncertain outcome. Moreover, DPAs force companies to dig deep into their pockets and establish robust compliance systems in order to secure immunity against criminal prosecution.
Companies are also attracted by DPAs as a means to avoid the devastating consequences of criminal indictment and continue their normal business including in the public procurement sector.
The success story of DPAs in the US (USD13.57 billion paid by companies between 2013 and 2022 in FCPA-related settlements with the DOJ and SEC) initiated their export to European jurisdictions, among them England and Wales (since 2014) and France (since 2016).
“Airbus entered into three separate DPAs in the US, UK, and France to resolve allegations of corrupt practices in various third countries, agreeing to a record payment of EUR3.6 billion in total.”
US-styled DPAs are now considered successful on this side of the Atlantic. The Serious Fraud Office (SFO) has received judicial approval for 12 DPAs with various companies including Standard Bank, Rolls Royce, Tesco, and G4S.
In France, CJIPs (conventions judiciaires d’intérêt public) are flourishing with companies like HSBC, Crédit Suisse, Google, and Bank of China agreeing to pay heavy fines and enhance their compliance mechanisms in order to resolve cases of alleged corporate wrongdoing.
Since the introduction of DPAs in Europe, significant progress has been made in co-ordinated cross-border enforcement. The Airbus case serves as a prominent example of such trans-jurisdictional tripartite co-operation. In 2020, the company entered into three separate DPAs in the US, UK, and France to resolve allegations of corrupt practices in various third countries, agreeing to a record payment of EUR3.6 billion in total.
The contractual character of DPAs
DPAs are of a contractual nature and only bind the parties who conclude them. Third parties – if natural persons or legal entities – are not bound in any respect by their terms or by the attached statement of facts where the agreed facts of the case are set out.
DPAs do not grant immunity from criminal prosecution to individuals involved in the corporate wrongdoing. On the contrary, the competent authorities are at pains to demonstrate that they increasingly focus on bringing individuals to justice. In a recent speech at the 2023 ABA National Institute on White Collar Crime in Miami, US Deputy Attorney General Lisa Monaco stated: “So, our message is clear: the department will zealously pursue corporate crime in any industry, and we will hold wrongdoers accountable, no matter how prominent or powerful they are.”
Criminal enforcement against individuals
Statistics do not seem to confirm such official assertions. It is reported that, of 136 corporate DOJ FCPA enforcement actions between 2006 and 2022, 104 have not resulted in criminal charges against company employees. And where individuals had been indicted, US courts have returned acquittal decisions in a remarkable number of cases. The acquittals of employees of Deutsche Bank, Rabobank, and Société Générale on charges of rigging the Libor following billion-high DPA settlements of the banks are prominent examples of unsuccessful individual enforcement actions.
The picture in the UK is even more striking. In DPA-related cases, the SFO has secured only one guilty plea by an individual, while the indicted employees of five companies (Sarclad, Tesco, G4S, Bluu Solutions, and Tetris Projects), who had admitted to corporate wrongdoing (bribery, fraud, and the like), were acquitted by trial courts.
Courts in other jurisdictions (Sweden, Greece, and Hong Kong) have also acquitted employees of companies (LM Ericsson, Siemens AG, and JP Morgan, respectively) which had resolved their cases in the US via DPAs or plea agreements on charges of bribery, money laundering, and related offences.
Are DPAs credible?
The above trial outcomes give reason to question the credibility of DPAs, especially the validity of their factual basis. In this respect, courts in the UK have repeatedly emphasised that the facts which form the basis of a DPA are not the result of a judicial fact-finding process, but a version of the case agreed upon by the parties with no judicial involvement.
In R v Bluu Solutions Ltd and Tetris Projects Ltd, Mrs Justice May DBE, who approved the DPAs of the companies with the SFO on 19 July 2021, made clear in this respect that:
“In deciding whether or not to approve the DPA, the court exercises no fact-finding function and a consideration of the seriousness of the corporate offending will involve reference to the actions of individuals.”
The quest for fair trial rights
The protection of individuals charged with criminal offences in parallel to or after a DPA from the prejudicial effect of companies’ admissions is of paramount importance. The anonymisation of the persons referred to in the statements of facts, the non-publication of the DPAs until the conclusion of criminal proceedings against individuals, and the exclusion of DPAs as evidence in such court proceedings, are intended to serve this purpose.
Moreover, the non-evidentiary use of DPAs against individuals should apply to court proceedings initiated in other countries in which DPA-styled legal tools are not available. This is the case, for example, in Greece, where former Johnson & Johnson / DePuy Ltd employees, who were spared prosecution in the US and the UK on bribery allegations, now face bribery, fraud, and money laundering charges before the Athens Court of Appeal in relation to contracts with Greek public hospitals following J&J’s DPA settlement with the DOJ and a guilty plea in the UK by a former company director.
DPAs are undoubtedly a practical mechanism to address corporate misconduct, and it is expected that more countries will be attracted by their obvious advantages. However, their advance should not “orphanise” individuals by depriving them of their fair trial rights.