Those following the SNC-Lavalin controversy have likely heard the phrases “deferred prosecution agreements” or “remediation deals” quite a bit recently.
The legal regime has come under the spotlight in the conflict, which revolves around whether members of Prime Minister Justin Trudeau‘s office tried to pressure former attorney general Jody Wilson-Raybould to interfere in the Quebec engineering giant’s criminal case.
Here’s a breakdown of what deferred prosecution agreements — often referred to as a remediation deal — are, and how it all ties into the current controversy.
What exactly is a DPA or remediation deal?
A DPA is essentially a plea deal that allows corporations accused of breaking the law in cases involving allegations such as bribery, fraud or corruption to avoid a criminal trial.
Richard Leblanc, a governance, law and ethics professor at York University, explained that one chief purpose of the DPA is to avoid harming parties that aren’t directly responsible for wrongdoing.
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“The rationale for a deferred prosecution agreement is to prevent harm to innocent stakeholders, that could include employees and pensioners,” Leblanc noted.
In order to get such a remediation deal, he explained companies agree to things like fines, third-party oversight and cultural and systemic reform.
The requirements vary based on what the company is accused of doing. Agreeing to these terms and subsequently fulfilling them means the charges will eventually be dropped.
On the flip side, a prosecutor can decide that a company didn’t change enough and still go through with a criminal trial.
“If the company is charged and convicted criminally, you can’t put a company in jail,” Leblanc explained, noting that what usually results is sanctions.
“Those sanctions might be something like you’re prohibited from doing business with the federal government for 10 years.”
This is all fairly new in Canada — remediation deals or DPAs were added to the Criminal Code of Canada in September 2018. The change was introduced in the Liberal government’s 582-page budget legislation in 2018.
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How does a company become eligible?
In order to be eligible for a DPA or remediation agreement, companies need to be facing money-related offences, like bribery, corruption and insider trading. They cannot be used for offences related to bodily harm, death or when national defence or security have been compromised.
The Department of Justice’s website explains that public organizations such as government departments, trade unions and municipalities are not eligible for DPAs.
Prosecutors consider whether a company has admitted responsibility, paid fines or taken disciplinary action against the employee(s) involved in breaking the law. Whether the company has any past legal woes is also weighed.
Similar practices in other countries
While it’s fairly new in Canada, DPA agreements have been used in other countries such as the United States, United Kingdom and France.
The way the deals work differs among countries. For example, they can only be used by companies in the U.K., but individuals are eligible for them in the United States.
DPAs have been used in the U.S. for several decades, and are a few years old in most European countries.
Controversy surrounding DPAs
While DPAs may work in averting criminal prosecution and the resulting economic fallout, there has been criticism.
Last year, after the Liberals proposed the change, Democracy Watch co-founder Duff Conacher suggested that DPAs could be letting companies off the hook.
“It amounts to letting them off the hook,” Conacher told Global News. “Corporate executives will not think about committing crimes as much because they will be able to escape penalty.”
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At the time of the proposal, there was also criticism that the amendment was purposely hidden in the budget bill to avoid debate.
“Certainly, I think it was made to be made quietly,” NDP MP Pierre-Luc Dusseault said at the time, adding that governments sometimes tuck contentious changes like this one into large budget implementation bills.
How does this tie into the SNC-Lavalin affair?
SNC-Lavalin sought to have a remediation deal, but the Public Prosecution Service rejected the request in September 2018.
The company challenged the decision soon after in October.
Wilson-Raybould now alleges that members of the PMO tried to pressure to her to steer prosecutors to agree to a remediation agreement with the company.
The former attorney general says she told Trudeau and other senior members of his team that she would not do so, and continuously pressuring her to do so would be political interference in the judicial system.
— With files from Global News reporter Andrew Russell, The Canadian Press