To avoid long and publicly exposed trial, legal persons and their executives may resort to negotiated justice mechanisms in France such as deferred prosecution agreement (“Convention Judiciaire d’Intérêt Public”, or “CJIP”), or plea bargaining (“Comparution sur reconnaissance préalable de culpabilité”, or “CRPC”). French criminal law does not however have a very long-standing tradition of negotiated justice and the CJIP introduced by the Sapin II law in 2016 renewed the use of the CRPC. The following may be useful to know for in-house counsel advising businesses that operate in France (or working in French businesses that operate in other countries):
Legal entities may enter into CJIP, i.e., settlement with prosecutors for white collar offences, subject to court approval. A CJIP involves inter alia (1) payment of a fine; (2) and implementation of a compliance program. A CJIP also circumvents the drawbacks of a criminal conviction for legal entities such including the exclusion from public procurements.
The opportunity to offer a CJIP and the amount of the fines are assessed by the prosecutor on three main criteria: (1) the legal entity’s criminal background; (2) the entity’s voluntary and prompt disclosure of facts to the authorities; (3) and cooperation with authorities, highlighted by the entity’s early initiative to conduct internal investigation.
A CJIP does not preclude criminal proceedings against the legal entity’s executive managers and admission of facts made in the CJIP will necessarily influence the defence of individuals involved. In that respect, in conjunction with a CJIP, Public prosecutors may offer or agree to a plea bargain (“CRPC”) with the executives subject to their prior admission of guilt. The CRPC entails reduced sentences, yet it has the same effect as a criminal conviction.
When companies face allegations of white-collar crimes, in-house counsels should therefore act promptly and determine whether French Law is applicable and whether the conditions to resort to negotiated justice mechanisms are met. They could also pre-emptively initiate internal investigations and enhance their compliance program to demonstrate cooperation with authorities. To this end, in-house counsels may seek independent attorneys to build a proactive and adequate strategy, to conduct independent internal investigation, negotiate with prosecutors and later foster improvements of the entity’s compliance program.