Baker & Partners secure the first DPA in Jersey

Baker & Partners in conjunction with Baker Regulatory Services Limited have successfully negotiated Jersey’s first deferred prosecution agreement following the introduction of the Criminal Justice Deferred Prosecution Agreements (Jersey) Law 2023 that came into force on the 3rd of March 2023.

This is the first deferred prosecution agreement in Jersey and was ratified by the Royal Court. Given that the case will act as a template for future cases the Royal Court issued a comprehensive judgment setting out why it believed the case met the legal thresholds for a deferred prosecution agreement and endorsed the content of the agreed statement of facts and the level of financial penalty agreed between the entity and the Attorney General. Read the full judgment here.

So, what is a DPA and the process for securing such an agreement?

A Deferred Prosecution Agreement (“DPA“) is an agreement reached between the Attorney General and a corporate entity which could be prosecuted for specific offences including breaches of the Money Laundering (Jersey) order 2008. The agreement is subject to approval by the Royal Court. It is a discretionary tool which enables a corporate to make full and carefully structured reparation for its conduct and avoid the damaging consequences of a conviction. A corporate that enters into a DPA with the Attorney General may avoid a complex, lengthy and costly trial. A DPA can also have a significant adverse impact on a business and such drawbacks need to be considered and discussed with a client before embarking on the process.

Attorney General guidance

The Attorney General issued helpful and high-level guidance setting out the process for securing a deferred prosecution agreement.

The Royal Court must be satisfied that the DPA is in the interests of justice and that the terms are fair, reasonable and proportionate. The effect of the DPA is that a prosecution is suspended for a defined period provided the corporate meets certain specified conditions. A DPA is an exceptional criminal justice tool and is not a routine measure. In the event that the terms of the DPA are breached the proceedings can be revived.

All DPAs must start with a self-report that is compliant with the Law.  Any breaches identified in a self-report must be supported with evidence of the breach. The contents of the self-report are private and confidential. Once the Entity has compiled an acceptable and comprehensive self-report in accordance with the guidelines, the Attorney General is obliged to carry out a determination as required in Article 5 (1). No determination will commence unless the Entity undertakes to meet the costs of the Attorney General. The quality of the report is key to securing the Attorney General’s approval to enter into DPA negotiations.

Next steps after an agreement

Once such agreement has been secured the next step and a key part of the process is negotiating the content of an agreed statement of facts. The statement of facts will ultimately represent a full public record of the wrongdoing in which the Entity has engaged. The guidance issued by the Attorney General states that “The public are entitled to a full statement of the facts in order to understand why the Entity is not being prosecuted”.

The following standards apply to a statement in Article 3 (1) (b):

1. The particulars relating to each alleged offence must be clearly set out.
2. The statement must give details of any financial gain or loss, with reference to key documents.
3. Mitigation or explanations for misconduct should not be included, save where remediation steps have been taken since the self-report or where it is necessary to explain a complex programme of remediation.
4. The Entity should take care to avoid assertions relating to matters wholly outside the knowledge of the Attorney General or irrelevant matters of fact that would not make a material difference to any financial penalty
5. Where the mens rea for particular offences requires alternative states of mind (intention or recklessness, knowledge or suspicion), the Entity must make it clear which applies to the misconduct alleged in the indictment and the Attorney General must agree which applies before any statement of facts is agreed.
6. There is no requirement for formal admissions of guilt in respect of the offences alleged in the indictment. However, it will be necessary for the Entity to admit the contents and meaning of key documents referred to in the statement of facts. Where admissions are made, these should be clearly stated and explained. If possible, they should mirror the misconduct alleged in the indictment.
7. The statement of facts will explain that in the event the DPA proceedings are terminated, and the Entity is subsequently prosecuted for the alleged offences in the self-report or, where the Entity, for example, misled the Attorney General during DPA proceedings the statement of facts is admissible against the Entity in those subsequent criminal proceedings.

Financial Penalty

Any financial penalty must be broadly comparable to a fine that the Royal Court could have imposed upon an Entity if had pleaded guilty to all of the offences in the Indictment.

The following will normally be requirements of the DPA:

1. A financial penalty.
2. that the DPA relates only to the offences particularised in the counts of the draft indictment.
3. an undertaking provided by the Entity that the information provided to the Attorney General throughout the DPA negotiations and upon which the DPA is based does not knowingly contain inaccurate, misleading or incomplete information relevant to the conduct the Entity has disclosed in its self-report or at any stage to the Attorney General;
4. a requirement on the Entity to notify the Attorney General and to provide where requested any documentation or other material that it becomes aware of whilst the DPA is in force which an Entity knows, or suspects would have been relevant to the offences in the draft indictment.
5. the payment of the reasonable costs of the Attorney General; and
6. Co-operation with any investigation into the alleged offence(s).

Royal Court Approval

The Royal Court is required to approve the DPA in its final form. The Attorney General is likely to bring to the Court’s attention the Entity’s conduct and the extent of its cooperation during the DPA process. In the first DPA the excellent level of cooperation from the entity was recognised in the Court judgment and by the Attorney General.

Unlike other jurisdictions, the appointment of an independent monitor is not optional and represents an essential part of the process. The content of the DPA must provide for the appointment of such a monitor and is subject to approval by the Court. The scope of the appointment is negotiated during the DPA process. The entity incurs the cost of the appointment that the update reports that the Monitor will be expected to make during the term of the appointment.

The Attorney General may make an application to the Court if, at any time while a DPA is in force, he has reasonable grounds to suspect that the entity has failed to comply with the terms of the DPA. Factors which may influence the exercise of the Attorney General’s discretion under Article 10 include the contents and findings of the reports made by the independent monitor.

DPA Advice

The first DPA case creates the foundations for future settlements, and it is clear from the judgment that the prospect of a DPA should, wherever possible, be explored before any entity is placed under formal investigation.

If you are considering seeking a deferred prosecution agreement and would like to discuss the benefits and drawbacks of a DPA contact either Barry Faudemer or Simon Thomas.