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Governance Authority
Category: Investigations and Resolutions

Deferred Prosecution Agreement

Also known as: DPA, deferred prosecution
Simply put

A Deferred Prosecution Agreement (DPA) is a negotiated arrangement in which a prosecutor agrees to pause or hold off on pursuing criminal charges against a defendant, often a company, in exchange for the defendant meeting certain conditions over a set period. If the defendant complies, the prosecution is typically dropped; if it does not, the case may proceed. It is generally viewed as an alternative to a full criminal trial and, in the corporate context, functions somewhat like a form of probation.

Formal definition

A Deferred Prosecution Agreement is a voluntary, negotiated resolution between a prosecuting authority and a defendant under which the prosecutor agrees to suspend (defer) prosecution, typically in exchange for the defendant's agreement to specified conditions. In some frameworks the agreement requires judicial approval to take effect, and it may be rendered null and void if a court declines to approve it, returning the parties to their pre-agreement positions. DPAs are frequently used to resolve matters involving corporate defendants and are sometimes characterized as an unofficial form of probation. The specific availability, terms, conditions, and any requirement for court approval vary by jurisdiction and by the prosecuting authority involved; the evidence provided does not establish a single uniform standard across all regimes.

Why it matters

Deferred Prosecution Agreements have become a significant mechanism for resolving criminal exposure involving corporate defendants without proceeding to a full trial. For boards and senior leadership, a DPA represents both a potential off-ramp from the most severe consequences of criminal prosecution and a set of binding obligations the organization must satisfy over a defined period. Because a DPA is typically characterized as an unofficial form of probation, the entity generally remains under scrutiny during the agreement's term, and failure to meet its conditions can result in the deferred prosecution moving forward.

The stakes are heightened by the conditional nature of these arrangements. As reflected in the evidence, in some frameworks a DPA requires court approval to take effect, and if a court declines to approve the agreement, it may be rendered null and void, returning the parties to their pre-agreement positions. This means that negotiating a DPA does not by itself guarantee a resolution, and organizations cannot treat the arrangement as a settled outcome until any required approvals are secured and the agreed conditions are met.

For governance, risk, and compliance functions, the relevance is practical: the conditions attached to a DPA frequently touch on the very controls, monitoring, and cultural elements those functions own. The availability, terms, and requirement for judicial approval vary by jurisdiction and by the prosecuting authority involved, so the implications for any given organization depend heavily on the specific facts and the applicable regime. This entry is educational and does not constitute legal, audit, or compliance advice.

Who it's relevant to

General Counsel and Legal Teams
Legal leadership typically manages negotiations with the prosecuting authority, assesses whether a DPA is available and appropriate under the applicable jurisdiction, and advises the organization on the binding conditions and any requirement for judicial approval. Because a court's refusal to approve can render an agreement null and void in some frameworks, counsel must manage the organization's expectations about the certainty of the outcome.
Chief Compliance and Risk Officers
The conditions attached to a DPA frequently intersect with the compliance and risk controls these functions own. Where an agreement requires enhancements to controls, monitoring, or reporting, compliance and risk leaders are typically responsible for implementing and evidencing adherence over the agreement's term, since non-compliance can allow the deferred prosecution to proceed.
Boards and Audit Committees
Boards and their committees exercise oversight of how management responds to serious enforcement matters, including whether to pursue a negotiated resolution and how the organization will meet the resulting obligations. Their role is generally one of oversight and challenge rather than day-to-day execution, but the probation-like nature of a DPA means the board should understand the ongoing obligations and residual exposure during the term.
Internal Audit and Assurance Functions
Where a DPA imposes conditions on the organization, assurance functions may be called upon to test whether required controls have been designed and are operating effectively, and to provide independent evidence of compliance. This work supports both management's obligations under the agreement and the board's oversight responsibilities.

Inside DPA

Statement of Facts
An agreed factual account of the underlying conduct that the entity typically admits or accepts. This admitted factual basis is often central to the agreement and may have consequences in related or collateral proceedings; its precise weight depends on jurisdiction and the terms negotiated.
Charges Held in Abeyance
The prosecuting authority typically files charges but agrees to defer or suspend prosecution for a defined term, with the understanding that charges may be dismissed if the entity complies with all conditions. This deferral, rather than a conviction or acquittal, is the defining mechanism.
Financial Penalties and Disgorgement
Monetary terms that may include penalties, disgorgement of gains, restitution, or other payments. Specific amounts and their calculation depend on the facts, the negotiating authority, and applicable jurisdictional rules, and should not be assumed to follow a fixed formula.
Compliance and Remediation Undertakings
Obligations requiring the entity to strengthen its compliance program, governance, and internal controls. Implementing and operating these enhancements is generally a management responsibility, while the board or its committees typically retain oversight of remediation progress.
Ongoing Cooperation Obligations
Commitments to continue cooperating with the authority, which may include producing information or assisting related investigations. The scope and duration are defined by the agreement and vary by jurisdiction and case.
Monitoring or Reporting Requirements
Some agreements provide for an independent monitor, self-reporting, or periodic reporting to the authority. Whether a monitor is imposed depends on the facts, the perceived strength of the entity's controls, and the discretion of the authority; it is not a universal feature.
Term and Consequences of Breach
A defined period during which conditions apply, together with provisions specifying what constitutes a breach and what may follow, which can include resumed prosecution. The precise consequences depend on the agreement's terms and applicable law.

Common questions

Answers to the questions practitioners most commonly ask about DPA.

Does a deferred prosecution agreement mean the company has been found guilty?
No. A deferred prosecution agreement (DPA) is a negotiated resolution under which a prosecutor agrees to defer or suspend the pursuit of charges in exchange for the organization meeting specified conditions over a set period. It generally does not represent a determination of guilt by a court in the way a conviction after trial or a guilty plea would. In many jurisdictions a DPA involves an agreed statement of facts and, under certain regimes, judicial approval, but its central purpose is to hold the entity accountable while avoiding a full criminal prosecution. The precise legal effect, including any admissions required, varies by jurisdiction and by the terms of the individual agreement, so the specific consequences should be assessed with reference to the governing law and the agreement itself. This entry is educational and not legal advice.
Is a DPA simply a way for a company to buy its way out of wrongdoing?
This characterization is generally misleading. While DPAs typically involve financial penalties, they also commonly impose non-monetary conditions such as remediation of the underlying misconduct, cooperation with ongoing investigations, enhancements to compliance programs, and in some cases external oversight or reporting obligations. The availability, structure, and stringency of DPAs differ substantially across jurisdictions and prosecuting authorities, and in certain regimes they are subject to judicial scrutiny intended to test whether the resolution is in the interests of justice. Whether a DPA is appropriate in a given matter depends on facts, jurisdiction, and prosecutorial discretion. This entry does not constitute legal advice, and the terms of any actual DPA govern its effect.
Which functions within an organization are typically involved in negotiating and monitoring a DPA?
Responsibility is generally distributed across several roles. Management, often led by the general counsel or chief legal officer working with external counsel, typically handles the negotiation of terms and the operational delivery of any required remediation. The chief compliance officer commonly owns the design and enhancement of compliance controls that a DPA may require, while the board or a designated committee generally exercises oversight of the resolution and monitors management's execution against agreed conditions. Internal audit or another assurance function may be asked to provide independent assurance over remediation. The exact allocation depends on the entity's governance structure and the terms of the agreement, and roles should not be conflated between oversight and operational execution.
What compliance program conditions are commonly attached to a DPA?
Conditions vary by agreement and jurisdiction, but they frequently focus on strengthening the areas of the compliance program relevant to the misconduct. These may include enhancing policies and procedures, improving risk assessments, upgrading controls, providing additional training, strengthening reporting and escalation channels, and improving governance around the affected activities. Some agreements require periodic reporting to the authority or the appointment of an independent monitor. When assessing such conditions, it is useful to distinguish control design from operating effectiveness: implementing a new control is not the same as demonstrating it operates as intended over time. The specific obligations are set by the individual agreement, and organizations should rely on the agreement text and qualified counsel rather than general expectations.
How should a board oversee the organization's performance against a DPA's terms?
The board or a designated committee generally exercises oversight rather than operational delivery. This typically involves setting clear expectations for management, receiving regular and reliable reporting on progress against each condition, and satisfying itself that adequate resources and accountability are in place. Boards often seek independent assurance, for example from internal audit or, where required, an external monitor, to corroborate management's reporting rather than relying solely on it. Effective oversight also includes tracking deadlines, escalating shortfalls, and documenting the board's engagement. The board should avoid assuming operational responsibility for remediation, which sits with management. The appropriate depth of oversight depends on the entity's circumstances and the agreement's terms; this is not legal or compliance advice.
What are the consequences of failing to meet the conditions of a DPA?
In general terms, a DPA suspends prosecution on the understanding that the organization satisfies its conditions within the agreed period; failure to comply can expose the entity to resumed prosecution or other consequences provided for in the agreement or the governing regime. The specific outcomes, the process for determining a breach, and any role for a court differ by jurisdiction and by the terms negotiated. Because the stakes of non-compliance can be significant, organizations typically treat the conditions as binding commitments requiring active management and assurance. The precise consequences in any matter depend on the agreement, applicable law, and the discretion of the relevant authority, and should be assessed with qualified legal counsel. This entry is educational only.

Common misconceptions

A deferred prosecution agreement is a finding of guilt or an acquittal.
It is generally neither. Prosecution is deferred rather than resolved by conviction or acquittal; while the entity often accepts an agreed statement of facts, the mechanism suspends charges subject to compliance and typically differs from a judicial finding of guilt. The exact legal characterization varies by jurisdiction.
Signing the agreement ends the entity's obligations and the matter is closed.
The agreement typically imposes ongoing obligations over a defined term, such as remediation, cooperation, and reporting or monitoring. Failure to meet these conditions may expose the entity to resumed prosecution. Compliance is an active, continuing effort, not a one-time event.
Every deferred prosecution agreement requires an independent monitor.
Monitorship is one possible feature but not a universal one. Whether an authority requires a monitor generally depends on the facts, the maturity of the entity's compliance program, and the authority's discretion. Availability and use of these agreements also vary by jurisdiction and sector.

Best practices

Confirm at the outset which conditions are legally binding obligations under the agreement versus expectations or non-binding guidance, and track each against a clear owner and deadline.
Assign management ownership for implementing and operating the required compliance and remediation enhancements, while ensuring the board or a designated committee maintains documented oversight of progress.
Treat any agreed statement of facts as potentially significant in collateral matters, and involve legal counsel before accepting factual admissions or negotiating terms.
Establish a monitoring and reporting cadence that maps to the agreement's term, so cooperation and reporting undertakings are met continuously rather than reconstructed near deadlines.
Distinguish control design from operating effectiveness when remediating; verify that enhanced controls are not only designed but are functioning as intended over time.
Engage qualified legal and compliance advisers on jurisdiction-specific requirements, since the availability, characterization, and consequences of these agreements differ across jurisdictions, sectors, and entity types.