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Would You Prefer to Defer? - Deferred Prosecution Agreements and the SFO

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Deferred Prosecution Agreements (DPA) were largely considered an American mechanism until their introduction in February 2014 by Schedule 17 of the Crime and Courts Act 2013. Since then, there has been 12 DPAs between the Serious Fraud Office (SFO) and organisations, with two being approved by Mrs Justice May on Monday 19 July 2021.  

What are Deferred Prosecution Agreements?

A DPA is an agreement between a prosecutor (usually the SFO) and an organisation which could be prosecuted. The prosecution is started, and then suspended, subject to a number of conditions being completed within a specified period of time. The most common conditions are a financial penalty, to improve practices, to assist in the prosecution of others and compensation to parties affected by the criminality. 

DPAs can only be entered into with organisations, not individuals, and more often than not are made in respect of failure to prevent bribery allegations contrary to section 7(1) of the Bribery Act 2010.  DPAs are only used for Fraud, Bribery and other economic crime. 

Lisa Osofsky became Director of the SFO in September 2018. Before her appointment, the SFO had only entered into four DPAs in four years. In three years under Osofsky, the SFO have entered into eight DPAs. It was thought that when she moved to the SFO from her role with the FBI that we would see an increase in DPAs and indeed Osofsky makes no secret of the fact that she supports the use of DPAs saying “DPAs have teeth and are a vital tool in enforcing the law.”


When might a DPA be entered into?

The SFO also require full and frank engagement during their investigations in order to obtain a DPA, simply self-reporting will not be enough. There is also joint guidance published by the SFO and CPS in respect of when it might be appropriate to enter into a DPA. The prosecution have to be satisfied that either the Full Code Test in the Code for Crown Prosecutors is met (or a reasonable suspicion based upon admissible evidence that the company has committed an offence; The full extent of alleged offending had been identified and the public interest would likely be met by a DPA (2.2 DPA Codes of Practice). 

Factors in favour of not entering into a DPA include

  • A history of similar conduct (including prior criminal, civil and regulatory enforcement actions against the organisation and/or its directors/partners and/or majority shareholders)
  • The conduct alleged is part of the established business practices of the Organisation. 
  • The offence was committed at a time when the Organisation had no (or ineffective) corporate compliance programme and it cannot show any improvement 
  • The organisation has been previously warned and nonetheless continued to engage in conduct, or failed to take steps to prevent the conduct 
  • Failure to report once the organisation found out 
  • Reporting the wrongdoing but failing to verify it, or reporting it knowing or believing it to be inaccurate, misleading or incomplete. 
  • Significant Harm

Factors in favour of entering into a DPA

  • Full and frank co-operation; 
  • A lack of a history of similar conduct involving prior criminal, civil and regulatory enforcement actions against the organisation and/or its directors/partners and/or majority shareholders.
  • 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 represents isolated actions by individuals, for example by a rogue director; 
  • The offending is not recent and the organisation in its current form is effectively a different entity from that which committed the offences
  • A conviction is likely to have disproportionate consequences for the organisation, under domestic law, the law of another jurisdiction, always bearing in mind the seriousness of the offence and any other relevant public interest factors;
  • A conviction is likely to have collateral effects on the public, for example employees and pension holders

No-one has a “right” to be invited to negotiate a DPA and the use of DPAs, although increasing, has been sparse considering the SFO prosecute approximately “60 cases at any one time”.  It is therefore important to engage with the SFO should the opportunity arise. No organisation wishes to be prosecuted, and of course an opportunity to defer and amend the practices of the organisation would be preferable. It allows the reputation of organisations to remain intact and often keeps the true extent of any issues that might be disclosed discrete and private.


Is the DPA the end of it all?

No is the short answer. The SFO often will still prosecute the individuals involved in the criminal conduct, as has been seen most recently in the Serco trial in April 2021. Serco entered into a DPA in 2019 with the SFO however that did not prevent the SFO prosecuting the alleged individual perpetrators of the economic crime, it simply meant that Serco did not become a co-defendant. 

In the Serco case, having spent eight years investigating the allegations surrounding the hiding of profits from the electronically monitored tagging contract which Serco held. Two former senior executives were prosecuted for their actions at Southwark Crown Court, and the case collapsed due to disclosure issues with the SFO ultimately offering no evidence having called 3 weeks of prosecution evidence. 

However, the SFO has a poor track record when prosecuting the individuals following entering into DPAs. Three people were acquitted in December 2019 arising from the allegations surrounding Güralp Systems Ltd, the Rolls Royce prosecutions failed in 2017 and Serco in 2021. 

The future in the prosecution and detection of economic crime is that we will continue to see the Americanisation in the approach of the SFO. DPAs will continue to increase I their number particularly in a post covid environment where funding issues continue to plague most organisations. The financial benefit to the treasury is vast with DPAs and they often are headline grabbing. Lisa Osofsky recently wrote in The Times on 30 June 2021 (Paywall) “Our strategy is paying dividends. As companies learn the lessons from DPAs, compliance and behaviour improves. And, in the four years to 2020, the SFO’s financial impact has tripled. Through fines and other penalties the agency has contributed more than £1.3 billion to the Treasury”. 

Because of the financial penalties involved, it comes as no surprise that the SFO and CPS do not enter into DPAs with either individuals or non-economic crime. They simply would not be able to obtain the same level of financial penalty. Admittedly, it would also be somewhat peculiar to enter into a DPA for general crime, such as an allegation of GBH, although similar things are available such as conditional cautions, and arguably suspended sentences. 

Whilst the introduction of DPAs has broadly been a success, it remains to be seen how the SFO might find a “strategy that pays dividends” when prosecuting the individuals involved in criminality associated to a DPA. 

For further advice, please get in touch by calling 020 7790 4032 (for out of hours, please call 07841 454 170) or by emailing

Liam Lane is a Trainee Solicitor at Edward Fail, Bradshaw & Waterson.