Legal

Corporate crime: more tools needed in DPP's toolbox?Ireland has a robust regime for investigating and prosecuting corporate misconduct that helps maintain its reputation as a low-risk country in which to do business.

However, criminal actions against corporate entities are historically difficult to prosecute. A company can commit a criminal offence but attributing acts of an employee/director to a corporate entity for the purpose of imposing criminal liability can prove difficult. As a result, corporate entities are predominately punished for strict liability offences where proving the guilty knowledge or intent is not required. The most common form of sanction against a corporate entity is a fine.

LRC has Recommended a Scheme for DPAs

In October 2018, the Legal Reform Commission ("LRC") recommended that a statutory scheme of Deferred Prosecution Agreements ("DPAs") should be introduced as one option to address corporate crime. A DPA is an agreement between a prosecutor and the accused pursuant to which the prosecuting body agrees to dismiss a criminal charge provided that the accused fulfils specified obligations during a defined period and cooperates fully with an investigation. The LRC recommended that the process should be controlled by the Director of Public Prosecutions ("DPP") and overseen by the High Court. The High Court's role would be to consider whether a DPA is "in the interest of justice" and whether the terms were fair, reasonable and proportionate. A detailed Code of Practice was recommended setting out circumstances in which the DPP might engage in DPA negotiations and the public interest considerations the DPP should take into account when considering DPA discussions.

To date the LRC recommendation has not been implemented but DPAs would potentially provide a reasonable compromise between sanctions for criminality, certainty and speed of outcome. It would therefore suit both prosecutor and prosecuted.

What is the situation in the UK?

In the UK, DPAs were introduced on a statutory basis in 2013. To date UK DPAs have returned an estimated £1 billion to the exchequer and so, despite various criticisms, including the perceived Americanisation of the process, the financial benefit is clear.

What next?

DPAs are unlikely to replace traditional prosecutions in Ireland in the immediate future. However, as the Bill to establish the Office of the Director of Corporate Enforcement as an independent agency with enhanced powers has priority in the legislative programme, it would seem there is renewed vigour for tackling corporate crime.  DPAs could provide an attractive option to resolve certain disputes without the necessity for costly and time intensive trials.

By Simona Mulligan of William Fry.