The UK Government has decided it will implement legal reforms to allow American-style 'plea bargaining' to be introduced into the UK legal system.
The proposed Deferred Prosecution Agreements are designed to tackle economic crimes including fraud, which is thought to cost the UK Economy a staggering £38bn every year.
The proposals come in the wake of other measures to tackle economic crime including the Bribery Act 2010.
Deferred Prosecution Agreements will allow a prosecuting lawyer to lay charges against an organisation for financial wrongdoing. The charges will be placed on hold, to allow the organisation the chance to 'plea bargain' with the prosecutor.
Related: Company bribery laws
Under the proposed Deferred Prosecution Agreement rules, an accused organisation could then negotiate to comply with new financial or other legal requirements, pay a fine, make reparation with any victims, refund profits and agree to future measures to prevent reoffending.
Deferred Prosecution Agreements will not replace full criminal trials, as in some cases organisations may genuinely dispute the charges against them, or may be unwilling to negotiate a settlement.
However, it is estimated that many companies will choose to accept a Deferred Prosecution Agreement to avoid the time and cost of litigation, which runs for years in complex cases and can cost millions in legal fees.
The Ministry of Justice, which announced the proposals yesterday, believes that the new Deferred Prosecution Agreements could reduce the cost of prosecuting an average case from £2.5m to just £600,000 and could reduce the length of a typical case from nearly ten years to just under five years.
Guilty companies will benefit from the new arrangements as they will be able to strike a deal, effectively saving them from being barred from making future tender applications, and whilst fines are expected to be larger they will ultimately save in legal fees.
Tony Woodcock is a partner at law firm Stephenson Harwood. He told Legal Week: "The move is sensible and mature. It has been tried and tested, usually to good effect, in other jurisdictions."
"The ultimate objective is to eradicate corruption and a tool which effects that objective, perhaps more easily and in a more structured way, is to be welcomed," he added.
Sources:
Govt confirms plans for plea bargain deals in corporate crime crackdown (Legal Week)
Government to net £60m on new financial crime rules (The Telegraph)
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