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Prosecution deferred is justice denied

21 September 2013

David_-_The_Death_of_SocratesYesterday the consultation period ended for the draft Code of Practice to be applied by the DPP and the SFO to using the Deferred Prosecution Agreements (or DPAs) introduced in the Crime and Courts Act 2013 (they are expected to take effect next year). If you are among the many whom this passed by unnoticed, I shall only attempt the shortest summary of what these achieve: essentially they allow companies suspected of financial crime to do a deal with prosecutors, pay a fine and avoid being convicted of an offence which (for banks or government contractors, for example) might have broader consequences than just the penalty a court would impose. For the DPP (or SFO, the other prosecuting organisation likely to use the scheme), it raises money without the time, trouble and hazard of trial – where costs are at risk (and with alarming frequency the incompetence of these organisations becomes visible to all).

It’s perfectly clear that wrong-doing by big companies is a major issue for society, and something needs to be done. I don’t need to rehearse all the examples you find in the newspapers by the day.  So should we regard that as a “win–win” (I’ll permit myself some management jargon given the nature of this blog)? Or do you share my disquiet?

There are several things that worry me. Firstly, we are putting a great deal of power in the hands of prosecutors – who are not normally charged with this, don’t have a record of doing what they should do that inspires confidence, and will have a perverse incentive to misbehave. When the DPP decides what charges to prosecute before a court, he throws out the ones that are not going to stick, and it is in everyone’s interests that he do so. But with a DPA, the opposite is the case: the threat of an outlandish crime with very severe consequences becomes an additional bargaining chip however improbable conviction by a court might be. In games theory terms, this is even worse than Athenian justice (of which David shows the famous example, above). The legislation promises judicial oversight of the procedure, which is to be welcomed; but that is not a complete protection: under the rules, the judge isn’t allowed to adjudicate on the facts in dispute which are likely to be crucial in evaluating whether the threatened charge might succeed.

So in effect we have replaced the courts with a kind of state-sanctioned extortion. That is not the rule of law, and I should be interested as to how this is seen to escape the Article 6 right to a fair trial. Of course the corporate offered a DPA is unlikely to challenge it on human rights grounds – they can simply refuse it and go for trial. But there is nevertheless a sense in which society as a whole, not just the person charged, has the right to see justice delivered fairly. It is never in the public interest to allow the accused and the prosecutor to contract out of due process.

At present the agreements are not offered to individuals, But with the cost savings they achieve, this may only be a matter of time. And here the moral pressure becomes an even clearer issue. As with plea bargaining (where the abuses are particularly obvious in the USA), the idea that someone suspected of a crime is charged with a much more serious one, effectively blackmailing them into pleading guilty to a lesser charge, offends natural justice. I go so far as to argue that pleading guilty should have no effect on a prisoner’s sentence.

But on the present proposals for dealing with corporate crime, there is a further aspect which seems to be entirely overlooked. Whether convicted by a court or forced into a DPA, companies are penalised by paying fines. And those fines ultimately fall on the shareholders. They are as much the victims of the crime as the customers, competitors or governments that were cheated in the first place. Because companies don’t commit crimes; the people who manage them do. And they are the ones who should be prosecuted.

Perhaps that’s difficult, but punishing the people whose collars you grab rather than the ones who run faster isn’t the rule of law either.

Update, 14 February 2014

The code of practice issued today together with a response to consultation addresses none of these fundamental questions.

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