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Deferred Prosecution Agreement in Canada: Understanding the Basics

Deferred Prosecution Agreement (DPA) is a legal agreement that allows companies accused of corporate crimes to avoid prosecution by meeting certain conditions. DPAs have been implemented in several countries around the world, including the United States and the United Kingdom, but it was only in 2018 that Canada passed legislation allowing them.

DPAs are a way for companies to avoid the reputational and financial damage that comes with a criminal conviction, while still being held accountable for their actions. The agreement is negotiated between the company and the prosecution, and if approved by the court, it allows the company to avoid a criminal trial.

The conditions that must be met in a DPA typically include a financial penalty, admission of wrongdoing, and implementation of remedial measures such as compliance programs and increased oversight. If the company fails to meet the conditions of the DPA, it can still be prosecuted for the original offense. However, if the conditions are met, the charges against the company are dropped.

DPAs have been controversial in some countries, with critics arguing that they allow companies to escape punishment for serious crimes. However, supporters of the agreements argue that they are a way to hold companies accountable while avoiding the collateral damage that can come with a criminal conviction.

In Canada, DPAs have been available since September 2018, under the Canadian Criminal Code. The legislation allows for DPAs for certain economic crimes, such as fraud, bribery, and corruption. The decision to offer a DPA is made by the Director of Public Prosecutions in consultation with the Attorney General, and the agreement must be approved by a judge.

To date, only one DPA has been approved in Canada. In 2019, SNC-Lavalin, a Montreal-based engineering firm, entered into a DPA after being charged with corruption and fraud. Under the agreement, the company paid a $280 million penalty and agreed to cooperate with ongoing investigations, implement compliance measures, and provide regular updates to authorities.

While DPAs are still relatively new in Canada, it is likely that more companies will seek to enter into such agreements in the future. As a professional, it is important to stay up-to-date on the latest developments in DPAs and other legal issues affecting businesses in Canada and around the world.