Canadian Lawyer InHouse

17 CANADIANLAWYERMAG.COM/INHOUSE MARCH 2018 process that is likely to take several months before any amendments become law. One of the more controversial aspects of the proposals, from the perspective of the corporate sector, is that more internal in - formation may be recorded or be required to be submitted in documentary form at an early stage and could then later be disclosed to third parties. From the perspective of the regulator and the federal prosecution service, the goal is obviously to encourage companies and in - dividuals to come forward when there is evidence of a conspiracy that has resulted in price fixing or bid rigging. As well, once immunity is granted, the hope is that this in - formation will provide a greater likelihood of convictions against other parties follow- ing a prosecution. The reaction to these proposals though, in terms of whether they are needed and will achieve the desired goals, has been somewhat mixed from those who practise in the competition law sector. "Are two unsuccessful prosecutions suf - ficient justification to change the whole program?" asks Donald Houston, a partner in the competition law group at McCarthy Tétrault LLP. "On a global level, this not a welcoming document," he suggests. Robert Kwinter, a senior competition law partner at Blake Cassels & Graydon LLP in Toronto, says that the Bureau should be careful not to make it too onerous to be granted immunity. "What is the problem ARE DPAs THE ANSWER? T he issue of alleged corporate wrongdoing and how to investigate and prosecute it effectively has been front and centre for the federal government in recent months. Along with the request for comment by the Competition Bureau about proposed revisions to its immunity program, the federal government began its own consultation process on a related subject — deferred prosecution agreements. The purpose, the government stated, was to determine if it had the "right tools" in place to address corporate crime and whether its "tool kit" should include a deferred prosecution regime. Its deadline for feedback was last December and while it is still early in the process, there appears to be momentum to move forward with adding this as an option to try to deter illegal corporate conduct. In short, these types of agreements would suspend a criminal prosecution for a specific period of time. During that period, there would be terms that must be followed such as identifying responsible individuals, enhancing compliance measures and the imposition of financial penalties. At the end of the term of the agreement, if there is full compliance, the criminal charges are withdrawn. A process in which a company does not have to enter a guilty plea for illegal conduct has obvious long-term benefits, such as reducing the likelihood of prohibitions on bidding for government contracts. The challenge, though, is to convince the public that this is not another way for corporations to pay financial penalties as the so-called "cost of doing business" without any executives or other high-level employees facing criminal prosecution and the possibility of ending up in prison. "The availability of another tool makes sense," says Andrew Matheson, a litigation partner at McCarthy Tétrault LLP in Toronto, who specializes in white collar and securities defence. At the same time, he agrees there is public cynicism about prosecutions of these types of offences. "Critics of DPAs suggest this can diminish the likelihood of the prosecution of individuals and result in shareholders paying most of the cost," he notes. "Entering into a DPA, though, is no light undertaking. It will involve a lot of time and effort and potentially significant admissions," Matheson says. Mark Morrison, a partner at Blake Cassels & Graydon LLP in Calgary, says the public interest can be addressed by ensuring there is a "properly structured" framework in place. "It could lead to more prosecutions rather than less. DPAs should be seen as ensuring genuine compliance reform and as a way to pursue the actual wrongdoers," says Morrison, who is co- chairman of the firm's business crimes, investigations and compliance group. DPAs have been in place in the United States to deal with white collar crime since the early 1990s. In fact, the original concept originated in that country in the 1930s to deal with juvenile offenders. In the United Kingdom, legislation creating this option to deal with corporate wrongdoing took effect in 2014. The application of these agreements differs significantly in the two countries. In the U.S., they can also be entered into with individuals, which is not the case in the U.K. Under the The current immunity program has been an overwhelming success and has enabled the Competition Bureau to secure guilty pleas, collect significant fines and enforce the cartel provisions of the Competition Act in a cost-effective manner," says Danielle Royal of Stikeman Elliott LLP. "It is puzzling why the Bureau is proposing significant changes which may change significantly the risk analysis of a company that discovers potential cartel behaviour and is considering seeking immunity.

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