Deferred Prosecution Agreements must be closely scrutinised to avoid perception of double standards

THE anticipated implementation of Deferred Prosecution Agreements (DPAs) this year must be handled with exceptional care to ensure the country’s legal system is not perceived as practising double standards.

Public unease is well founded, given the long-standing perception that “big sharks” can evade criminal prosecution merely by paying financial penalties, while “anchovies” involved in corruption involving tens or hundreds of ringgit face years of imprisonment.

If this perception is not addressed transparently and decisively, it risks eroding public confidence in the courts and in the very principle of justice.

DPAs are not intended to serve as a “get-out-of-jail-free card” for criminal wrongdoing. Rather, they are designed as a tightly regulated mechanism imposing stringent conditions, including admissions of misconduct, the payment of penalties and compensation, reimbursement of investigation costs, contributions to society, and comprehensive reforms to corporate governance and anti-corruption policies.

Failure to comply with these conditions would result in the reopening of prosecution, potentially with heavier penalties.

International experience shows that DPAs are typically applied to large corporate entities with vast legal resources, often in high-profile cases in developed jurisdictions.

In such contexts, the mechanism is used to address large-scale corporate crime by combining punitive measures with corrective action aimed at reforming wrongful practices and strengthening governance.

The real challenge, however, lies not in the legal framework itself, but in how it is implemented and whether justice is both done and seen to be done.

Canada offers a notable example of a more robust approach, where a Remediation Agreement cannot take effect without judicial approval. In the second such case approved by the Quebec Superior Court in 2023, the court explicitly assessed whether the agreement genuinely served the public interest and whether its terms were fair, reasonable and proportionate to the seriousness of the offence.

While the court accorded a degree of deference to negotiations between prosecutors and the company, approval was not automatic.

Judges were empowered to raise concerns, seek further clarification and even direct amendments to the agreement before granting approval.

Crucially, the court emphasised that its role was not merely to endorse the agreement, but to ensure that the penalties imposed stripped away any benefits derived from criminal conduct and compelled meaningful corporate governance reform.

In that case, the company was required to pay C$10 million (RM29.6 million), including the forfeiture of corrupt proceeds, criminal penalties and a victim surcharge, and was subjected to compliance monitoring by an independent auditor for several years.

Judicial approval mechanisms of this kind also limit the scope for closed-door negotiations and external interference, as processes involving only prosecutors and defendants can fuel perceptions that undermine public trust.

Canada’s approach demonstrates how a balance of power between prosecution and the judiciary can curb the misuse of discretion and serve as a vital safeguard against DPAs being seen as a means of purchasing freedom rather than a credible instrument of justice.

Against this backdrop, the government is urged to ensure that DPAs are implemented only with rigorous judicial review and strict transparency requirements, so as not to weaken public confidence.

Ultimately, success should not be measured solely by the recovery of funds or improvements in corporate governance, but by the extent to which integrity and the rule of law are upheld and seen to prevail. - January 2, 2026