Just days before the UK Parliament broke up for its February recess, the introduction of deferred prosecution agreements (“DPAs”) in the UK came a step closer to realization when the Crime and Courts Bill completed its Committee Stage in the House of Commons. The anticipated introduction of DPAs in the UK should be of particular interest to medical device companies that are incorporated in – or otherwise carry on business in – the UK. Their introduction is expected to lead to an uptick in major enforcement actions in the years ahead.
How UK DPAs Will Work
Under the proposed legislation, the UK Serious Fraud Office (“SFO”) and Crown Prosecution Service (“CPS”) would be given the authority to use DPAs to resolve a limited list of economic crimes, including bribery, fraud and money laundering cases. Organizations entering into DPAs would be required publicly to admit certain facts indicating wrongdoing and to comply with rigorous conditions (e.g., the payment of a financial penalty, implementation or updating of a compliance program, payment of compensation to any victim(s), and disgorgement of profits). In return, the SFO/CPS would agree to suspend criminal charges and, crucially for medical device companies, the organization subject to the DPA would not face mandatory debarment from competing for potentially lucrative government contracts.
Novel Features of the UK DPA
Medical device companies should be mindful of a number of key aspects of the current proposals that are peculiar to the UK’s proposed version of DPAs. The progress of DPA negotiations between an organization and a prosecutor will be overseen by a judge from an early stage in the discussions. The judge will be called upon to decide, at a preliminary hearing held in private, whether entering into a DPA in a particular case is likely to be in the interests of justice and whether the emerging terms of the agreement are fair, reasonable and proportionate.
Assuming the discussions are permitted to proceed, the judge will, at a final hearing, revisit and decide once again whether resolution of the matter with a DPA is in the interests of justice and whether the final proposed conditions attached to the DPA are fair, reasonable and proportionate. The details of a successful DPA are to be made public at the final court hearing.
David Green, Director of the SFO, recently stated while giving evidence to the Justice Select Committee that he expects the SFO to have its first DPA in place in early 2014. Before DPAs become available to UK prosecutors, however, MPs will have one final opportunity to amend the DPA legislation after they return from recess in late February. The legislation will then have its third and final reading in the House of Commons before being returned to the House of Lords, where its wording will be finalized so that it can receive Royal Assent and become law.