Deferred Prosecution Agreement

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Deferred Prosecution Agreement

A Brief Introduction About the Deferred Prosecution Agreement

A Deferred Prosecution Agreement is a special type of legal document that is created between a company or organization and a prosecutor who is either representing the state or another company. The most common application of such a legal document can be found widely in the case of corporate misunderstandings such as corporate frauds, leak of trade secrets, corporate espionage, and many more.

In the simplest of terms, this contract and or legal document outlines the list of amendments, fines, and corporate reforms that the company or organization has to accept and that it will fully cooperate with ongoing investigations and in exchange for the same all charges on them will be dropped.

Who Takes the Deferred Prosecution Agreement? – People Involved

In the formation of such a legal document, there are usually two parties involved, the first being the legal prosecutor who is representing either the state or an organization and the second being the company or organization on which the current investigations are ongoing. The first party is known as the Prosecutor and the second as the Defendant in legal terminologies.

Purpose of the Deferred Prosecution Agreement – Why Do You Need It?

The main aim of this agreement is to establish a proper understanding between both the organizations and to make sure that the interests of the private parties along with the collective are protected at all points in time.

Important aspects to note about a Deferred Prosecution Agreement are the following:

The most common use of a Deferred Prosecution Agreement is found when it is used to resolve a criminal case and sometimes even a civil case against a company or an organization.

The government organizations which are permitted to make use of the Deferred Prosecution Agreement are the SEC, the FBI, CIA, and many more. Having this Agreement outlines the fact that the government can and will bring charges against the company or organization, but at the same time will agree not to move forward with them, in exchange for which, the company needs to fulfill certain conditions.

If the Defendant, that is the company, in this case, abides by the conditions set forward by the government charges will be dropped. However, if the company regencies and violates the terms and conditions, the government has the full right to go ahead with the charges and prosecute a case.

Contents of the Deferred Prosecution Agreement – Inclusions

Parties Involved: There are two parties involved; the first being the prosecutor who is representing the interests of the government, also known as the prosecutor and the second being the company or organization, who is also known as a Defendant in legal terminologies.

Effective Date: This section of the agreement outlines the date from which this contract will stand legally binding and also the date on which the same can be dissolved.

Where does it Apply: This agreement is legally applicable within the boundaries of the state, city, or county where it was originally drawn at.

How to Draft the Deferred Prosecution Agreement?

A Deferred Prosecution Agreement can be drafted by simply following the steps.

Organize a meeting between both the parties and discuss upon the terms and conditions of the agreement, such as how many charges will be dropped, when will the charges be dropped, the amount of fines the Defendant needs to pay, the corporate reforms that need to be addressed and also until when the same agreement will hold legal weight.

When the parties have mutually agreed to all the terms and conditions, reach out to a lawyer and ask him to draw up a Deferred Prosecution Agreement according to the specifications discussed. Make the parties to sign the contract and get it registered in a house of law as suggested by your lawyers.

Negotiation Strategy

While negotiating the formation of a Deferred Prosecution Agreement, it must be taken care that the individual interests of both parties must be addressed along with the common cause.

Benefits & Drawbacks of the Deferred Prosecution Agreement

The most significant benefits of having a Deferred Prosecution Agreement are as follows.


The contract mentions the individual responsibilities, duties, and limitations and therefore makes sure that both parties are well aware of them at all points in time.

This is document acts as legal proof and thus can be produced in court if there is a need in the future.

In the absence of a Deferred Prosecution Agreement, neither of the parties have legal proof of an understanding taking place between two entities, and thus if the matter is ever brought to court, both parties stand to lose.

The terms and conditions of the Agreement are mutually decided between the company’s prosecutor and the representative of the government. Although the terms and conditions are negotiable, there are still some standard contents that make up a Deferred Prosecution Agreement; for example, the company might need to admit wrongdoing publicly, they might need to provide compensation to those who were injured or harmed in any form due to their wrongdoing and also they will be instructed to take specific measures, so that these aren’t repeated in the future.

One of the most common terms and conditions that are found to be mentioned in Deferred Prosecution Agreements is to fire the executive or team of employees who were responsible for this wrongdoing in the first place as well as to take precautionary measures while hiring new ones, as a costly mistake can’t be borne in the future. Companies are also advised to put a more robust compliance program in place and also submit a report to the government stating the measures they have put in place along with the changes that have been instituted.

What Happens in Case of Violation?

In this case, the fact that a Deferred Prosecution Agreement is in no way similar to a plea bargain or a sentence of probation. Those two are entirely different legal instruments, which have no similarity to this. If a plea bargain is issued, a defendant is charged with committing a crime, and a court entirely oversees compliance with a plea agreement.

On the other hand, this agreement is mostly stated as well as overseen by a judicial system and not a court per se. One of the essential points to note here is the fact that a defendant who submits a Deferred Prosecution Agreement is not convicted of any crime. The charges are dismissed as soon as the company or organization in context abides by the rules and regulations as outlined in the Deferred Prosecution Agreement

A Deferred Prosecution Agreement document is designed such that both the parties involved in the transaction are mutually benefited. This contract is a legal document, and the same is legally binding in court and is meant to protect both parties in the event of a dispute, violation or misunderstanding(1).

Another point that you need to note is the fact that DPAs often vary in their contents between different countries. For example, the DPA issued in the US has a significant amount of difference as compared to the DPA issued in the UK. As a company, if you have multiple locations around the globe, it is essential to understand these critical differences as it will help you in shaping company policy better, as well as let you be better prepared at the early stages of a prosecution or a legal case.