What Is a Deferred Prosecution Agreement (DPA)?

TL;DR

• A Deferred Prosecution Agreement (DPA) lets prosecutors pause a criminal case against a company while it completes conditions like fines, compliance reforms, cooperation, and sometimes a corporate monitor.
• If the company fulfills the terms, the case is dismissed; if it breaches, prosecution resumes.
• The U.S. uses DPAs through agreements with the Department of Justice (DOJ); in the U.K., DPAs require a judge’s approval and are overseen by the Serious Fraud Office (SFO).
• DPAs aim to punish and reform without the collateral damage of a conviction to employees, investors, and markets—but they’re criticized when seen as too lenient.

What it is

A DPA is a contract between prosecutors and a company under investigation. Prosecutors file or prepare charges but agree to defer the case for a set period while the company meets specific obligations. Typical terms include paying a monetary penalty, enhancing or overhauling the compliance program, ongoing cooperation, and—in some cases—appointment of an independent compliance monitor. If the company satisfies the agreement, prosecutors move to dismiss the charges; if it fails, the case can proceed.

Where it came from

In the United States, DPAs evolved as part of corporate enforcement practice at the DOJ. They’re referenced in DOJ guidance governing corporate prosecutions and remediation tools (alongside non-prosecution agreements and guilty pleas). In the United Kingdom, DPAs were created by statute in the Crime and Courts Act 2013 and are available to corporate entities for certain economic crimes, but only with court oversight.

How it’s used today

Prosecutors consider DPAs when they believe accountability and reform can be achieved without the costs of a corporate conviction. Common elements include:

• Financial penalties and, where appropriate, victim compensation or disgorgement.
• Cooperation obligations (e.g., providing documents, facilitating interviews).
• Compliance reforms tailored to the risk areas that caused the misconduct.
• Independent monitoring in higher-risk matters to verify sustained remediation.

In the U.S., DOJ policy (the Principles of Federal Prosecution of Business Organizations) lists factors prosecutors weigh—such as the nature and seriousness of the offense, pervasiveness of misconduct, prior history, and the adequacy of the compliance program—when deciding whether a DPA is appropriate. In the U.K., the SFO must satisfy the Full Code Test and persuade a judge that a DPA is in the interests of justice and that its terms are fair, reasonable, and proportionate.

Why it matters

• Remediation without collapse: Avoids some collateral consequences of conviction (e.g., debarment or sudden job losses) while still imposing a penalty and reforms.
• Speed and certainty: Can resolve complex corporate cases faster than contested trials.
• Critiques: Critics argue DPAs can look like leniency if individuals aren’t held to account or if monitorships and reforms aren’t robust enough.

Key terms

• Non-Prosecution Agreement (NPA): A contract where prosecutors agree not to file charges if conditions are met—often considered a step short of a DPA.
• Monitorship: Appointment of an independent expert who assesses and reports on the company’s compliance remediation over a defined period.
• Compliance Program: Policies, training, controls, and culture designed to prevent and detect misconduct—often upgraded as part of a DPA.

FAQ

Q: Do DPAs apply to individuals?
A: Generally, DPAs are used for companies; individuals are typically handled separately, though practices can vary by jurisdiction.

Q: What triggers a monitorship?
A: Higher-risk cases (e.g., widespread or systemic failures) are more likely to require an independent monitor to verify reforms over time.

Q: How do DPAs differ from NPAs?
A: In a DPA, charges are filed or ready to be filed and then paused; in an NPA, charges are not filed if the company abides by the agreement.

Q: Are U.K. DPAs different?
A: Yes. U.K. DPAs require judicial approval at key stages and the court must deem the outcome fair, reasonable, and in the interests of justice.

Sources

• DOJ Justice Manual: Principles of Federal Prosecution of Business Organizations
• U.K. SFO Corporate Guidance (includes DPAs)
• U.K. SFO: Deferred Prosecution Agreements (collection)
• DOJ Guidance on Use of Monitors in DPAs/NPAs

Not legal advice.