WHEN IS A CRIMINAL NOT REALLY A CRIMINAL? WHEN IT IS A CORPORATION WITH A REMEDIATION AGREEMENT - de

Stephen Aylward (“Why Canada needs deferred prosecution agreements”, Globe and Mail, June 8, 2018) suggests that the addition of deferred prosecution agreement (DPA), known as a “remediation agreement” in the amendment to the Criminal Code, is good for society. I cannot agree. This type of agreement occurs in instances in which an organization (such as a corporation) has committed a criminal offence (say, theft). It allows a corporation or other organizational offender to avoid conviction for serious criminal wrongdoing by making an agreement with the prosecutor, possibly involving firing employees, payment of monetary amounts and/or changes to its governance structures. In return, the charges against the organization are stayed, meaning that the government does not pursue the matter. Basically, the DPA allows the corporation to avoid being labelled a criminal.

My objection to DPAs runs deep, straight to the core of the criminal law. The criminal law represents the things that we, as a society, believe are inherently wrongful. They are so wrongful in fact that we insist that convictions be public. The public nature of a conviction is part of the punishment. Most punishment theorists say there are two elements to punishment: hard treatment and censure. For individuals, imprisonment or a fine is hard treatment. What, then, is censure? Censure is the communication to both the particular offender and to society as a whole that there was moral wrongdoing on the part of the offender. Society is communicating to the offender that society moral code was broken. The wrong is not merely private, it is also a wrong a wrong done to the social fabric that needs to be recognized publicly. DPAs are not matters for public trial. They are private arrangements between the prosecutor and an organizational offender. They run contrary to the foundation of the criminal law. Moreover, a court may choose to never publicize that a DPA was entered into.

If we wanted the criminal law to be private, we have a way of redistributing money to inflict hard treatment on wrongdoers. It is called a tort system. If one person beats up another without just cause, the criminal law calls this “assault”. The tort system calls the same wrong “battery”. The direct victim can sue the wrongdoer in tort for beating them up and receive damages from the civil courts. The parties can even agree to skip the trial and enter into a private arrangement whereby the wrongdoer agrees to pay a certain amount of money to the victim without ever admitting publicly that they committed the act. The law permits this because the issue is between the people who were direct parties to it. If they choose not to tell the rest of society about their private agreement, that is perfectly acceptable.

The criminal law says that the wrongdoing is not purely between the direct parties. Society has been wronged, and can demand that that wrong be publicly acknowledged. The DPA allows those with power, money and influence to use all three of these elements to change the basic rules of the game. The criminal law simply becomes a mirror of its tort cousin. Those situations that involve an organizational offender in large-scale fraud can get a deferred prosecution agreement, and protect against public shaming.

Moreover, shame matters. Corporations want to sell their wares to the public. DPAs allow corporations to simply “externalize” (the economic term for making someone else pay for something the corporation did) their wrongdoing. A simple example: a corporation enters into a large-scale fraud. It gets caught. Before being charged, however, the corporation seeks a deferred prosecution agreement. It pays a large fine. It then externalizes that fine by charging higher prices to its customers. In essence, members of society are being asked to pay for the very wrongdoing that they did not even know occurred.

Criminal fines can be large enough to bring down an organizational offender altogether. One need only look at corporate scandals in the last two decades to see examples of penalties so large that they shut down organizational offenders. But, hard treatment is only supposed to be half of the equation. The public nature of the censure means that there is a penalty to be paid outside of the economic loss. If people know that an organization misbehaved, they are less likely to support that organization. In a DPA, the corporation can externalize the economic loss, and avoid the reputational damage that comes with the public censure. In other words, criminal wrongdoing can simply be part of the business, until a DPA is unavailable.

Secrecy has always been the exception when it comes to matters of criminal law, and then only in unique circumstances, when issues such as national security or extreme vulnerability of the victims are at play. We should not normalize the secrecy inherent in DPAs. Public wrongs demand public accountability. Organizational offenders should be stigmatized as criminals. Their criminality must be made public. Money should not always talk. Money should not always win. Let us leave DPAs to our friends south of the border.

* Professor, Faculty of Law, University of Manitoba, Winnipeg, Manitoba.