The Serious Fraud Office (“SFO”) has recently updated its Operational Handbook to include a chapter on DPAs (the "Updated Handbook"). For companies under investigation, the question of whether or not to cooperate with the SFO in the hope of obtaining a DPA has long been a difficult one. The SFO will generally require an extremely high standard of cooperation from companies, without offering any certainty that this will ultimately result in the offer of a DPA. This has led to much debate over when it is in a company’s interests to self-report wrongdoing and hand over documents and work product from internal investigations to the SFO. The updates to the Operational Handbook will not put an end to these discussions. According to the SFO, the Updated Handbook was published “for internal guidance only” and “solely in the interests of transparency”. The law on DPAs therefore remains the same: the relevant provisions are found in Schedule 17 of the Crime and Court Act 2013 (“CCA2013”) and it should be read alongside the Code of Practice for DPAs and other guidance including the SFO’s Corporate Co-operation Guidance. However, the Updated Handbook contains some potentially helpful guidance on the SFO’s approach, which we discuss here.
In brief, a DPA is an agreement between the prosecution authorities (currently the Crown Prosecution Service (“CPS”) and SFO) and a company that criminal charge(s) will be brought, but not proceeded with, provided the organisation complies with certain negotiated terms. Terms typically include payment of financial penalties, cooperation with ongoing investigations/prosecutions, and compliance with measures to prevent future offending. DPAs must be approved by a judge who must agree that: (a) that it is in the interests of justice for the matter to be resolved by DPA and; (b) that the terms proposed are fair, reasonable and proportionate in the circumstances of the case. Judges have so far shown a willingness to challenge such terms.
The Updated Handbook refers to cooperation being the “key factor” for the SFO when deciding whether to enter into a DPA. Broadly speaking, cooperation is viewed by the SFO as providing assistance that goes “above and beyond” what the law requires. The Updated Handbook provides several examples of cooperation, two of which are of particular interest:
Entering into negotiations with the SFO to agree a DPA is not without risk. As reflected in the Updated Handbook, both the fact that negotiations are taking place, and the information and material provided by the SFO and the company during negotiations, should be kept confidential. Save in very narrow circumstances, if negotiations fail then material showing that the company entered into DPA negotiations (such as any draft of the DPA or any draft statement of facts intended to be included within the DPA), or other material created solely for the purpose of preparing the DPA or the statement of facts, should not be used in a subsequent prosecution against the company.
However, the Updated Handbook makes clear “there is no limitation on the use to which other information obtained by the prosecutor during the course of DPA negotiations may be put during a criminal trial of the company and/or linked individuals to the extent that the rules of evidence permit”. In the course of its negotiations the SFO might, for example, obtain pre-existing contemporary records such as contracts, accounting records, e-mails and other communications, all of which would be available to be used by the prosecutor in a subsequent prosecution of the company (if the matter does not proceed to a DPA).
Under CCA2013, a DPA must contain a statement of facts relating to the alleged offence “which may include admissions by [the company]” (emphasis added). There is therefore no requirement for the company to admit any guilt (albeit they will need to admit the contents and meaning of key documents referred to in the statement of facts that accompanies the DPA). This is reflected in both the Code of Practice for DPAs and the Updated Handbook (the latter states that “There is no requirement for formal admissions of guilt in respect of the offences charged on the indictment.”
However, the Updated Handbook indicates that when agreeing the terms of the DPA “consideration should be given to including admissions where appropriate”. In our view, the SFO is under some political pressure to avoid what critics of DPAs see as companies avoiding both admissions of wrongdoing and prosecutions such that we expect there will be added impetus by the SFO on companies to make admissions (beyond confirming the truthfulness and accuracy of the statement of facts).
The default position is that once approved by the court the DPA (including the statement of facts) must be published unless prevented by court order. However, the SFO in its Updated Handbook acknowledges that where charges against individuals have been brought, or are contemplated, the "publication of the DPA may pose a risk of prejudice to the administration of justice". In these circumstances, the Updated Handbook stipulates that the statement of facts, which will typically refer to key individuals, could be postponed from publication (as occurred in the recent judgment approving the G4S DPA), or that concerns about publicity could be addressed “by publishing a redacted or (further) anonymised statement of facts”.
To date, the SFO has never successfully prosecuted an individual following entry by the company of a DPA. This is undoubtedly a sore point for the SFO and we expect they make every effort to improve their chances of securing a conviction, including by anonymising linked individuals or (in appropriate cases) withholding of the statement of facts from publication.
The Updated Handbook confirms that any financial penalty under a DPA must be "discounted in a manner comparable to a fine imposed upon a conviction under a guilty plea". The Updated Handbook confirms that the level of discount applied should be determined “based in large part on the nature and extent of the company’s co-operation with the SFO’s investigation”. It acknowledges that in the majority of DPAs to date, the court has approved terms permitting discounts of 50% in recognition of the levels of cooperation demonstrated.
 Under English law DPAs can only be agreed with corporate entities
 Such as the appointment of a monitor
 See SFO corporate co-operation guidance
 Such as in a prosecution against the company for an offence of providing inaccurate, misleading or incomplete information to the SFO.
 See para. 13(6) of Schedule 17, CCA2013
 See para. 4.6 of the Code of Practice for DPAs
 See para. 5(1) of Schedule 17
 See para. 6.3 of the Code of Practice for DPAs
 Para. 5(1), Schedule 17 of CCA2013
 Para. 8(7), Schedule 17 of CCA2013
 SFO -v- G4S Care and Justice Services (UK) Limited at para. 45-46