Canada's Deferred Prosecution Agreements - A Backgrounder

While it has received a great deal of attention over the past few weeks, very little has really been said about Deferred Prosecution Agreements (DPAs) or, as they are known in Canada, Remediation Agreements, the foundation of the SNC-Lavalin scandal.  In this posting, I will take a brief look at the origins of DPAs and how they function in Canada.

Despite their protestations about omnibus bills with hidden legislation when they were in Opposition during the Harper government era, the Trudeau Liberals attached the following to Bill C-74, the massive and mind-numbingly boring budget bill that was tabled in Canada's Parliament on February 27, 2018 (Part XXII.1) noting that anything in italics is a direct quote from the legislation:

Remediation Agreements

Definitions

715.‍3 (1) The following definitions apply in this Part.

court means a superior court of criminal jurisdiction but does not include a court of appeal.‍ (tribunal)

offence means any offence listed in the schedule to this Part.‍ (infraction)

organization has the same meaning as in section 2 but does not include a public body, trade union or municipality.‍ (organisation)

remediation agreement means an agreement, between an organization accused of having committed an offence and a prosecutor, to stay any proceedings related to that offence if the organization complies with the terms of the agreement. (accord de réparation)

victim has the same meaning as in section 2 but, with respect to an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, it includes any person outside Canada.‍ (victime)

Acting on victim’s behalf

(2) For the purposes of this Part, a third party not referred to in section 2.‍2 may also act on a victim’s behalf when authorized to do so by the court, if the victim requests it or the prosecutor deems it appropriate.

Purpose

715.‍31 The purpose of this Part is to establish a remediation agreement regime that is applicable to organizations alleged to have committed an offence and that has the following objectives:

(a) to denounce an organization’s wrongdoing and the harm that the wrongdoing has caused to victims or to the community;

(b) to hold the organization accountable for its wrongdoing through effective, proportionate and dissuasive penalties;

(c) to contribute to respect for the law by imposing an obligation on the organization to put in place corrective measures and promote a compliance culture;

(d) to encourage voluntary disclosure of the wrongdoing;

(e) to provide reparations for harm done to victims or to the community; and

(f) to reduce the negative consequences of the wrongdoing for persons — employees, customers, pensioners and others — who did not engage in the wrongdoing, while holding responsible those individuals who did engage in that wrongdoing.

Here are the conditions under which a remediation agreement may be negotiated:

(a) the prosecutor is of the opinion that there is a reasonable prospect of conviction with respect to the offence;

(b) the prosecutor is of the opinion that the act or omission that forms the basis of the offence did not cause and was not likely to have caused serious bodily harm or death, or injury to national defence or national security, and was not committed for the benefit of, at the direction of, or in association with, a criminal organization or terrorist group;

(c) the prosecutor is of the opinion that negotiating the agreement is in the public interest and appropriate in the circumstances; and

(d) the Attorney General has consented to the negotiation of the agreement. (my bold)

Here are the factors that must be considered by the prosecutor when a remediation agreement is considered:

(a) the circumstances in which the act or omission that forms the basis of the offence was brought to the attention of investigative authorities;

(b) the nature and gravity of the act or omission and its impact on any victim;

(c) the degree of involvement of senior officers of the organization in the act or omission;

(d) whether the organization has taken disciplinary action, including termination of employment, against any person who was involved in the act or omission;

(e) whether the organization has made reparations or taken other measures to remedy the harm caused by the act or omission and to prevent the commission of similar acts or omissions;

(f) whether the organization has identified or expressed a willingness to identify any person involved in wrongdoing related to the act or omission;

(g) whether the organization — or any of its representatives — was convicted of an offence or sanctioned by a regulatory body, or whether it entered into a previous remediation agreement or other settlement, in Canada or elsewhere, for similar acts or omissions;

(h) whether the organization — or any of its representatives — is alleged to have committed any other offences, including those not listed in the schedule to this Part; and

(i) any other factor that the prosecutor considers relevant.

Most pertinent to the ongoing SNC-Lavalin, Ms. Wilson-Raybould issue is this section which outlines the factors which are not to be considered by the prosecutor:

"Despite paragraph (2)‍(i), if the organization is alleged to have committed an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, the prosecutor must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved." (my bold)

Note - the prosecutor must not consider the national economic interest when debating whether to allow negotiated agreement or to proceed with a full court proceeding.

According to an article on the adoption of Deferred Prosecution Agreements (or Remediation Agreements as they are termed in Canada) on Denton's, the framework adopted by Canada is similar to legislation adopted in other jurisdictions, particularly the United Kingdom.  They also note that DPAs are available for a wide range of crimes including fraud, domestic bribery and other crimes that are contained within the Criminal Code and offences that fall under the Corruption of Foreign Public Officials Act, an aspect that is particularly interesting given SNC-Lavalin's connection to legal issues in both Bangladesh and Libya.  It is also key to note that only "organizations" as defined within the Criminal Code will be able to take advantage of Remediation Agreements, they will not be available to natural persons.  The legislation is also set out so that self-reporting by corporations is incentivized and proactive compliance efforts are promoted.  One of the biggest differences between Canada's Remediation Agreements and those in other jurisdictions is the potential for victim compensation; under the Canadian version, it is mandatory that victims' perspectives be considered and that victims are allowed to provide a victim impact statement.

One of the most notable aspects of the Remediation Agreement which seems particularly interesting in light of the SNC-Lavalin case is the fact that such agreements can be utilized for wrongdoing that occurred prior to the law coming into force.  

According to Dentons, there is a price to pay for Remediation Agreements including but not limited to:

1.) an agreed statement of facts and an acknowledgement of wrongdoing that must be made public.

2.) an obligation to fully cooperate in any investigation relating to the alleged conduct including providing information that may lead to the prosecution of involved individuals.

3.) an obligation to forfeit any proceeds that were derived from the wrongdoing.

4.) payment of a penalty to the federal government as well as an additional victim surcharge of up to 30 percent of the penalty.

5.) payment of reparations to any victims involved.

While Canada's new Remediation Agreement environment will allow for a win-win scenario when corporate fraud and corruption takes place, recent events in Canada suggest that the new legal reality is highly susceptible to influence by the political side of the spectrum.  Had Ms. Wilson-Raybould not stood against the Trudeau government in its alleged quest to assist SNC-Lavalin from a painful legal dilemma, Canadians would likely never have come to the realization that a Quebec-based, high profile, Liberal-friendly corporation received what could easily be perceived as preferential treatment, particularly when one considers this:

Given that SNC-Lavalin's legal issues developed over its operations in Libya when it allegedly bribed Libyan officials between 2001 and 2011, a cynic might think that the newly minted Remediation Agreement laws were tailor-made to assist the company, particularly when one considers that the law is retroactive.  Fortunately, we all know that the "sunny ways" government would never do anything so obviously in their own best interest, would they?