A New DPA Sheriff In Town?

On 5 December 2023, the Crown Prosecution Service (CPS) entered into a deferred prosecution agreement (DPA) with Entain, a global online sports betting and gaming business (owner of Ladbrokes and Coral bookmakers) headquartered in London, to settle the HM Revenue & Customs (HMRC) investigation into the company and its group.

DPAs provide a mechanism by which an organisation can avoid prosecution for certain economic offences through an agreement with the relevant prosecuting authority. The conduct which is the subject of this DPA relates to the alleged failure by GVC (the predecessor to Entain) to prevent bribery contrary to Section 7 of the Bribery Act 2010 between July 2011 and December 2017. It is the first time in which a DPA has been entered into by the CPS as the prosecutor, with all previous DPAs having been entered into by the Serious Fraud Office (SFO).

The DPA itself entails Entain agreeing to:

Pay a financial penalty and disgorgement of profit totalling Ł585 million.
• Pay HMRC and the CPS' costs, totalling Ł10 million.
• Make a charitable payment of Ł20 million.
• Comply with other obligations outlined in the DPA, which include cooperation obligations and extensive corporate compliance obligations for a period of four years.

It is of note that there were two 'significant precursors' to the DPA process which was subsequently entered into:

Entain provided significant cooperation to the investigation and had made significant admissions for the purposes of Section 7 of the Bribery Act 2010. Although there was no initial 'self-report' by the company prior to the investigation, the CPS considered that the extent of the voluntary production of material by Entain was 'akin to self-reporting', and that Entain's standard of cooperation had been exemplary.
• There had been a 'wholesale change of senior management and approach', as well as an acknowledgement by the company that it was necessary to overhaul its culture and practices. The court went so far as stating that there had been 'sweeping changes to the compliance procedures in place'.

The court was satisfied that the DPA applied for was in the interests of justice, and that its terms were fair, reasonable and proportionate, leading to the second-largest corporate criminal settlement reached in the UK.

Takeaways

This result demonstrates that UK enforcement agencies beyond the SFO are becoming confident in using DPAs in appropriate cases. The capability of DPAs to include substantial compensation for victims and to offer companies relatively speedy resolution of criminal investigations may be increasingly appealing to investigators and companies alike.

It also is expected that DPAs will no longer be regarded as being in the exclusive domain of the SFO (which has secured 11 DPAs to date), and that they will be increasingly utilised once the new failure to prevent fraud offence is introduced (examined in this April 2023 blog post).

Companies under investigation by UK agencies besides the SFO would be advised to consider whether a DPA may be an appropriate resolution.

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