November 24, 2007
Deferred Prosecutions Article
Deferred and non-prosecution agreements are fast becoming the accepted means for corporations to settle a range of criminal investigations, from FCPA violations to healthcare fraud to accounting problems. What little law there is in the area has developed haphazardly, and there has not been much attention paid to these agreements in academia. Stetson law professors Candace Zierdt and Ellen Podgor, co-editor of this blog, have contributed to the discussion with their new article, Corporate Deferred Prosecutions Through the Looking Glass of Contract Policing. From the abstract:
This article examines deferred and non-prosecution agreements entered into between corporations and the Department of Justice (DOJ) through the lens of contract policing theory. It adds a new dimension to the contractual law now applicable to plea bargains and proffer agreements by suggesting key provisions that should be prohibited in deferred prosecution agreements. Three provisions common to many deferred prosecution agreements, or used by the government as leverage to secure a deferred prosecution agreement, are of particular interest here. These are: (1) the requirement of a corporation to waive its attorney-client privilege; (2) the determination of a breach of the agreement being within the sole province of the government; and (3) the provision that corporations not abide by previously negotiated contract terms that allow the corporation to pay the attorney fees of corporate employees. Specifically, this article examines the viability of specific provisions within these agreements when matched up against contract policing principles such as duress and unconscionability. This article concludes that corporations are deprived of basic contract rights as a result of the over-powering prosecutorial power used in reaching these agreements.
The article is available to download on SSRN (here). (ph)
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