Survey Finds that Corporate Pretrial Pacts Increased in 2007

Interestingly, the same findings also revealed that while the number of agreements increased from 2006 to 2007, there was actually a decrease in the number of agreements that contained waivers regarding attorney-client privilege and work-product protection.
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Among the results, the authors found that there were three major trends that revealed themselves during the previous year. First, while such pretrial agreements did increase — there were 35 in 2007, compared to 20 in
2006 — 2007 also saw the biggest monetary penalty ever imparted for a violation of the Clean Air Act. After pleading guilty to violating the act, oil mammoth BP, PLC, was forced to pay $50 million.

Second, of those agreements that were publicly accessible, of which there were 29, only three contained privilege waivers. Moreover, none involved nonprosecution agreements. This represented a 50% decline from previously collected statistics corresponding to the period 2003-2006.

Finally, 12 of the 35 agreements were directly related to violations associated with the Foreign Corrupt Practices Act. This finding was somewhat expected as the Department of Justice has begun to concentrate more heavily on such cases within the past few years, giving them time to mature and find their way into a courtroom.

Susan Hackett, senior vice president and general counsel of the Association of Corporate Counsel, addressed one disconcerting finding related to the large number of deferred prosecution agreements (DPA) and nonprosecution agreements (NPA).

"Why are there suddenly so many agreements as opposed to the previous way, where you were either going to be prosecuted because the department had a case to prosecute or there was going to be some other resolution — the company was exonerated in some way or came to some other kind of settlement that didn't necessarily require a DPA or NPA?" she asked.

Also of interest, over the course of four years, from 2003 to 2007, the number of agreements that required corporate monitors appears to have stayed consistent. According to Finder, due to the fact that there are no set policies to determine how these agreements are handled, each is unique, which is why it may appear as though monitors are chosen rather sporadically.

However, now that Congress has started to follow these cases more closely, Finder believes that there will be policies set in place for future deferred prosecution agreements that will more closely regulate the process of how monitors are appointed, resulting in more uniformity.
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