Canadian Lawyer

www.canadianlawyermag.com 25 "The message to corporate Canada is, [DPAs] are out there. But that doesn't mean you get to commit all sorts of crimes and then get a free pass." Kenneth Jull, Gardiner Roberts LLP SOME CRIMINAL CODE OBJECTIVES FOR DPAS to denounce an organization's wrongdoing and the harm that the wrongdoing has caused to victims or the community to hold the organization accountable for its wrongdoing through effective, proportionate and dissuasive penalties to impose an obligation on the organization to put in place corrective measures and promote a compliance culture to encourage voluntary disclosure of the wrongdoing often conditions to a deferred prosecution agreement — and the impact of prolonged litigation on the shareholders who have already suffered from the actions that gave rise to the underlying investigation in the first place. The fact that the DPA has to be made public means "the company has to deal with the reputational fallout and the impact on stakeholders of admitting to the wrong- doing," he says. "In the appropriate circumstances, where there's a demonstration that there is no further public harm, and there is a level of deterrence that will have an impact on people who are in similar circumstances, then I think the public is properly protected," Ritchie adds, "and at a much lower cost to the affected stakeholders than running a company to the ground, where the share- holders — who are innocent and probably have been harmed — have no way out. "I think [DPAs are] a very important tool, and I do think they're underutilized. I find it surprising that the right circum- stances haven't arisen more in Canada." As for SNC-Lavalin, Jull says, "I always thought they should get a DPA. A lot of people were innocent in that — a lot of employees, engineers who were designing bridges, who had nothing to do with the bribery [of foreign officials in Libya] — and who would have been punished by the debar- ment. It makes sense to punish the people who are guilty [and] make the company pay a fine, put in a monitor, but don't punish all the employees and the stakeholders for this." In the end, he says, "I thought it was the right result." And his advice to clients: "If you want to get a DPA, you can't just say, 'we've been bad, can we have our DPA now?'" A company must show it had a compliance program already in place, and although it failed in this instance, the company is now taking steps to right the transgression. SNC-Lavalin did all that, says Jull: "they cleaned house." In a new wrinkle, Quebec prosecutors announced in late September that they were charging two SNC-Lavalin business entities and two former vice-presidents with bribes relating to a 2002 Montreal bridge contract. Officials indicated they would invite the SNC units to negotiate a deferred prosecu- tion agreement — perhaps Canada's first. Change may be around the bend, but the message to corporate Canada is that DPAs are out there but are not a free pass, Jull adds. "And, of course, the other advantage of a compliance program is it stops the bad things from happening in the first place."

• Cover