The Use of Non Prosecution Agreements and Deferred Prosecution Agreements

Trends in the Use of Non-Prosecution, Deferred Prosecution, and Plea Agreements in the Settlement of Alleged Corporate Criminal Wrongdoing (April 2015)

Executive Summary

Full Report

  • Cindy R. Alexander, PhD, Principal Investigator
    Research Fellow, Law & Economics Center
  • Mark A. Cohen, PhD, Principal Investigator
    Justin Potter Professor of American Competitive Enterprise and Professor of Law, Vanderbilt University
  • Michael P. Wilt, JD, LLM, Legal Research & Policy Associate
  • Matthew D. Sibery, Research Coordinator
  • Sophia R. Higgins, Economic Research Associate

Over the past decade, two novel approaches to resolving corporate criminal investigations have developed, the Deferred Prosecution Agreement (“DPA”) and Non Prosecution Agreement (“NPA”).

There is both legal scholarship and policy debate surrounding the efficacy of DPAs. On the one hand, scholars have questioned whether DPAs usurp the power of judge and jury and provide undue power to prosecutors, while other scholars have warned that DPAs allow the prosecutor and corporate management to negotiate settlements that are neither socially desirable nor in the interest of shareholders. Some say that DPAs result in sanctions (both government-imposed and market-imposed) that are more severe than criminal resolutions while others claim the opposite and that DPAs provide socially desirable alternatives to costly sanctions such as debarment. Yet there is currently no data that would allow policy makers to systematically compare the provisions of DPAs to criminal resolutions or to understand which firms (and type of crimes) are targeted for criminal versus DPA resolution.

In 2012, the Searle Civil Justice Institute commissioned a research plan, which is designed to place the policy debate on a firm empirical foundation. The project collected 15 years of data (1997-2011) for the over 400 public companies whose criminal investigations have been settled either through NPAs, DPAs, or pleas.

Preliminary findings from this report were presented at the December 8, 2014 Academy Briefing: Non-Prosecution and Deferred Prosecution Agreements: Promoting Efficient Settlements or Over-expansion of Corporate Criminalization? Videos of the event are available here.