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The SFO's guidelines for deferred prosecution agreements

Chris Hamblin, Editor, London, 19 January 2021


Lisa Osofsky (pictured), the director of the United Kingdom's Serious Fraud Office, has an appetite for negotiating deferred prosecution agreements. In line with this, the SFO has released guidelines on the subject recently.

The SFO has concluded most of its DPAs in the period since Ms Osofsky took over in September 2018. These have been with: Serco Geografix Ltd (2019); Güralp Systems Ltd (2019); Airbus SE (2020); G4S Care & Justice Services (UK) Ltd (2020); and Airline Services Ltd (2020).

There were only four previous DPAs, concluded with: Standard Bank (2015); Sarclad Ltd (2016); Rolls-Royce (2017); and Tesco (2017). DPAs were introduced on 24 February 2014 in Schedule 17 Crime and Courts Act 2013. They are available to the Crown Prosecution Service and the Serious Fraud Office, which together issued a "DPA code of practice" at the time, as required by the Act.

Under a DPA, a prosecutor charges a company with a criminal offence but proceedings are automatically suspended if the judge approves it. The SFO only invites banks and other companies to enter negotiations for DPAs if they have already co-operated with its investigations fully.

Last October the SFO published a chapter from its operational "handbook" which lays out its approach to DPAs most comprehensively. It states that if a bank under investigation is to benefit from a DPA, the prosecutor must apply an evidential test and a 'public interest' test.

Evidential test

To satisfy the evidential test either the Full Code Test in the Code for Crown Prosecutors (there must be enough evidence to provide a realistic prospect of conviction) must be met, OR there must be at least a reasonable suspicion based upon some admissible evidence that the company has committed an offence, with reasonable grounds for believing that a continued investigation would provide further admissible evidence.

'Public interest' factors

The prosecutor must also be satisfied that the public interest would be properly met by a DPA rather than a full-blown prosecution. It must have regard to public interest factors set out in the Code for Crown Prosecutors.

In addition to this, the DPA Code also sets out further non-exhaustive factors that the SFO ought to consider. Additional public interest factors in favour of prosecution include:

  • a history of similar conduct (including prior criminal, civil and regulatory enforcement actions against the company and/or its directors/partners and/or majority shareholders);
  • the alleged conduct being part of the firm's established business practices;
  • the offence having been committed at a time when the company had an ineffective corporate compliance programme, with no demonstrable improvement since then;
  • the company having been previously subject to a warning, sanctions or criminal charges and having nonetheless not taken adequate action to prevent future unlawful conduct;
  • failure to tell the SFO about the wrongdoing within reasonable time of the offence coming to light;
  • reporting the wrongdoing but failing to verify it; and
  • significant harm caused directly or indirectly to the victims or a substantial adverse effect on the integrity or confidence of markets.

Additional public interest factors against prosecution include:

  • co-operation (see below);
  • no history of similar conduct (the SFO should contact regulators to ascertain this);
  • the existence of a proactive corporate compliance programme both at the time of offending and at the time of reporting but which failed to be effective in this instance;
  • the offending coming from the isolated actions of individuals such as rogue directors;
  • the offending not being recent, with the company in its current form being a more or less different entity from the one that committed the offences;
  • a conviction being likely to have disproportionate consequences for the company; and
  • a conviction being likely to have collateral effects on the public, the company’s employees and shareholders or the company itself.


The aforementioned DPA code lists certain indicators of co-operation, stating that the SFO will place considerable weight on a genuinely proactive approach which may include:

  • the reporting of the company’s offending otherwise unknown to the prosecutor within a reasonable time of wrongdoing coming to light;
  • remedial action, which might include compensation for victims;
  • the prompt preservation of available evidence in an evidentially sound format;
  • the identification of relevant witnesses and the disclosure of their accounts and documents;
  • making witnesses available for interview when requested;
  • a report in respect of any internal investigation, which includes source documents.
  • a waiver of privilege over any "legal professional privilege" material.

It is important to note here that the company can neither be compelled to waive privilege, nor can it be penalised for not waiving privilege.

Voluntary reporting

The voluntary reporting to the SFO of probable wrongdoing within a reasonable time of suspicions coming to light is an important aspect of co-operation. When the SFO considers whether such a report is meretricious, it must consider the totality of the information that the company has given it, the extent to which the offending was previously known, if at all, to the SFO, and the extent to which the company is providing it voluntarily, that is without the threat of imminent disclosure by a third party or compulsion.

Other guidance

In addition to the Code for Crown Prosecutors and DPA Code, there is other guidance which should be considered at this stage: the Joint Prosecution Guidance on Corporate Prosecutions and, in relation to cases of bribery, the Bribery Act 2010: Joint Prosecution Guidance is also relevant.

Before negotiations for a DPA can begin, the parties must agree upon the terms of those negotiations in writing. While negotiations are going on, the parties ought to attach the utmost confidentiality to: (i) the fact of the negotiations taking place; and (ii) the information and material provided by both parties during the negotiations. The company must also undertake to retain all relevant material or documents until the SFO says otherwise.

A DPA should ordinarily require the company not to make any public statements which are inconsistent with it and to consult the SFO's press office before making any press release about it.

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