NPA has plan to unclog courts for companies
The National Prosecuting Authority (NPA) has published a directive on a new corporate alternative dispute resolution (Corporate ADR or CADR) mechanism for companies accused of corruption and other criminal offences, which the NPA hopes will expedite justice.
This is similar to mechanisms in place for adult offenders and children in conflict with the law.
Criminal cases will be diverted from the formal criminal justice system at pre-trial stage, with a view to disposing of the cases early in the process, while still being able to proceed with prosecution and asset forfeiture against the company’s directors, employees or agents.
This could short-circuit long and costly litigation, replacing the adversarial tug-of-war in the courtroom with one of relative cooperation and contrition.
Companies will be allowed legal representation during the process but will be expected to make a full disclosure of wrongdoing. The information disclosed may be used later to prosecute company directors or employees.
The CADR mechanism would be particularly useful where multinationals are accused of multi-jurisdictional offences, allowing the NPA to obtain the disgorgement of the proceeds of unlawful activities and compensate victims of corruption or crime.
Corporate cooperation
Companies are expected to preserve and provide the NPA with all material evidence, or point to its whereabouts as part of a broader expectation of cooperation with investigations and prosecutions, both in SA and elsewhere if necessary.
They will also be required to pay the costs of a private forensic or similar investigation, subject to the control of the NPA or other law enforcement agencies.
The willingness of a company to make “fair, reasonable and proportionate” restitution will influence the NPA’s decision to allow use of the CADR mechanism.
Other factors weighing on the NPA’s decision to use the mechanism include the nature and seriousness of the unlawful activities, and whether the decision would be in the public interest.