Trying corporations: why not prosecute?

ABSTRACT

This article examines whether deferred prosecution agreements (DPAs), which allow prosecutors to negotiate and enter into agreements with corporations to defer or suspend criminal proceedings, can ever be in the public interest as a way of addressing corporate crime. DPAs are seen as quicker, cheaper and more predictable than the conventional criminal trial but raise questions of consistency, proportionality and fairness, as well as the circumvention of conventional criminal justice by corporations. I consider if and how a mechanism for deferring prosecution in this way coheres with the existing scheme of corporate criminal liability, relying on four United Kingdom case studies to demonstrate the array of issues raised by DPAs. I argue that DPAs are both necessitated by but also misconstrued as a way of offsetting problems with corporate criminal liability. Moreover, and paradoxically, while DPAs are introduced in an effort to remedy such issues, they are deployed also to mitigate the inevitable consequences of conviction. DPAs therefore both serve to supplement as well as dilute corporate criminal liability. This is a tension that has to be confronted.

KEY WORDS:

• corporate crime
• corporate criminal law
• deferred prosecution agreements
• negotiated settlements

Acknowledgements

My thanks to the two anonymous referees, Arie Freiberg, Michael Thomas, and the participants at the 2019 Criminal Law Workshop, University of Adelaide, for thorough and helpful comments on earlier drafts. Any errors are my own. An overview of this article was presented at the inaugural Francine V. McNiff Lecture, Monash University, Melbourne, April 2019.

Disclosure statement

No potential conflict of interest was reported by the author.

Legislation

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Bribery Act 2010

Commonwealth Criminal Code

Corporations Act 2001

Crime and Courts Act 2013

Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017

Trade Practices Act 1974

Court cases

Australian Securities and Investments Commission v Ingleby [2013] 39 VR 554

New York Central & Hudson River Railroad Co. v. United States 212 U.S. 481 (1909)

SFO v Rolls Royce PLC, 17 January 2017

SFO v Standard Bank plc, 30 November 2015

SFO v XYZ, 11 July 2016

Tesco Supermarkets Ltd v Nattrass [1972] AC 153

ORCID

Liz Campbell http://orcid.org/0000-0003-1328-1481

Notes

1 The Corporate Prosecution Registry, run by the University of Virginia School of Law and Duke University School of Law, provides comprehensive information on federal organisational prosecutions in the United States. Retrieved from http://lib.law.virginia.edu/Garrett/corporate-prosecution-registry/browse/browse.html (date accessed 24 April 2019).

2 The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 will also amend the Criminal Code Act 1995 to amend the offence of bribery of a foreign public official and to create a new offence of failure of a body corporate to prevent foreign bribery by an associate.

3 This is the term used in the draft Code of Practice, though not the Bill, which refers to ‘person’.

4 All DPAs to date have been agreed by the SFO, whose very existence once hung in the balance. The recent appointment of Lisa Osofsky, formerly of the US Department of Justice, may be indicative of a desire for a more robust approach.

5 See Director of the Serious Fraud Office v Eurasian Natural Resources Limited (Law Society Intervening) [2018] EWCA Civ 2006.

6 It seems for corporations that prosecution is the punishment, insofar as prosecution rather than conviction affects share price: Pierce, 2018.