Mohit Rohatgi and Kaustub Narendran
India is in the process of replacing its existing criminal laws to, among other things, provide for a more reparative approach to justice where necessary. One modern-day instrument that must be considered is non-trial resolutions.
While there are several iterations of non-trial resolutions, one of the most common ones is deferred prosecution agreement (DPA). Under this, the prosecution is suspended or deferred for a pre-determined period, provided certain conditions are complied with (by way of, say, a corporate compliance monitor programme and/ or payment of monetary penalties). If complied, the prosecution is eventually dropped. If not, charges are brought, and the trial continues.
The last two decades have seen growing global acceptance of this regime. In the UK, for instance, Section 45 and Schedule 17 of the Crime and Courts Act 2013 now authorise the Crown Prosecution Service and the Serious Fraud Office to enter into a court-approved DPA. Other examples include Chile’s Conditional Suspension of Proceedings under Article 249 of the Chilean Code of Criminal Procedure, Canada’s Remediation Agreements, and the French Convention Judiciaire d’Interêt Public (CJIP). In fact, it has now become so common that proposing new criminal legislation sans this regime is met with criticism. When Australian introduced the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 earlier this year without DPA provisions, the OECD’s Working Group on Bribery in International Business Transactions urged the country “to consider introducing such a scheme into its arsenal of resolution mechanisms in the future”.
Over the years, countries have taken the liberty to device their own forms of non-trial resolutions. Under Italy’s patteggiamento rulings, there is neither an affirmation of liability nor an acceptance of guilt. However, once approved by a court, it typically results in the closure of the criminal proceeding without a trial and a significant reduction in the pecuniary fine. Another example is Brazil’s Acordo de leniência—to resolve foreign bribery cases by imposing damages and other non-pecuniary conditions on the corporate body and requiring it to admit taking part in the wrongful acts without recognition of guilt. Both Italy and Brazil have successfully used these instruments (disclaimer: the authors have been involved as counsel in India-related investigations in two such cases).
There are good reasons for India to adopt some form of non-trial resolution.
Settlement-like concepts are not alien to India. In 2005, a provision for “plea bargaining” was introduced under Chapter 21A of the Criminal Procedure Code, 1973. Plea bargaining is a pre-trial negotiation between the prosecution and the accused where the latter agrees to plead ‘guilty’ in exchange for accepting a lesser punishment. However, this system falls short on three accounts. First, offences that entail more than 7 years of imprisonment and that which are considered “socio-economic” in character are, by law, excluded. Second, the focus continues to be on punishment (being a ‘sentence’ bargain, in effect). Third, there must be a clear admission of guilt, something that most corporate bodies would naturally hesitate to do. Examples in other regulatory contexts include amnesty schemes for EXIM traders defaulting in their export obligations, “compounding” of offences under the SEBI Act or FEMA, etc.
Also, a substantial percentage of corporate white-collar offences occur at the behest of a few rogue individuals. However, a criminal investigation and a trial could destroy a corporation’s reputation, demoralise the employees and eventually reduce its financial viability. While recalcitrant corporate bodies should be dealt with firmly, making a corporation undergo such turmoil when it is willing to cooperate, provide evidence against rogue individuals, and comply with imposed conditions makes little sense.
The global shift towards non-trial resolutions shows a widely accepted progressive and nuanced outlook towards the criminal process, bringing much needed focus towards restorative justice in contrast to the traditional crime-and-punishment approach. In the US, for instance, the DOJ reports that between 2017 and 2021, it entered into 17 DPAs with billions of dollars of recoveries. These recoveries are then better applied towards pursuing restorative outcomes and conserved resources towards monitoring compliance and a pointed prosecution.
All these considerations are in line with India’s developing legislative stance. This is not to say that this is a fool-proof system—several jurisdictions are facing criticism of their use of non-trial resolutions as “sweet-heart deals” for those that are “too big to jail”. However, we can learn, and even profit, from lessons across the world.
(Authors are respectively, partner, andsenior associate, Trilegal.)