Following the publication of the new Criminal Code, the legislator also took the amicable and so-called "guilty plea" procedures under review. These procedures are attractive to companies and directors by allowing them to settle criminal cases with no or limited reputational damage. The trend about which we have already previously reports to hit companies and directors more heavily in criminal law, however, will go ahead. The new rules will apply from 2 May 2024.
Reform of amicable settlements
The amicable settlement makes it possible to avoid a (lengthy and public) criminal trial through a deal conclude with the prosecution. In doing so, the person does not acknowledge any guilt and the amicable settlement is not mentioned on the criminal record (only on the very restricted criminal record). In exchange, a fine (usually hefty) must be paid, any assets must be surrendered and victims (including tax and social administration) must be compensated.
The recent legislative amendment aims to do away with criticism that the amicable settlement is a form of "class justice" would imply: mediated defendants could quietly " the risks associated with a criminal trial.redeem”.
The legislature is therefore making the following adjustments:
- Governance ban: the prosecution can now also demand a board ban of three to 10 years as part of the settlement. Evidently, this so-called security measure has very far-reaching consequences for the day-to-day activities of directors. An amicable settlement on that basis will therefore be unacceptable to many directors.
The prosecution would do well to specify that a board ban could only be demanded in certain serious cases. In addition, in our opinion, the public prosecutor should take into account other "security measures" that the director concerned may have already taken (e.g. strict monitoring by a numerical officer or in-service training) that make the board ban no longer strictly necessary. All this will therefore be fodder for negotiations between the lawyer of the director concerned and the prosecution. - Transparency: ratification of amicable settlements are now pronounced in public session. If this receives press coverage, reputational damage is possible. However, this potential reputational damage is dwarfed by the damage that can be caused during a fully public criminal trial.
Reform of the guilty plea
Also with the prior admission of guilt ("VES") or guilty plea A criminal trial is avoided by a deal with the prosecution. Unlike the amicable settlement, however, the VES does involve an admission of guilt and a conviction and a penalty pronounced which is mentioned on the criminal record. The full range of penalties is thereby available. So whereas in an out-of-court settlement a fine must always be paid, in a VES a suspension or (partial) postponement of the sentence can be agreed, among other things.
This procedure was rarely used since its introduction in 2016. In particular, the limited focus on victims and the cumbersome procedure made magistrates reluctant. Defendants shied away from admitting guilt at a public hearing, with no guarantee that the VES would then be effectively ratified.
The legislature meets this as follows:
- Greater role for victims: victims are given the same position as in the amicable settlement. Without an agreement with the victims (including tax and social administration) and full compensation for damages, a VES is not possible. From now on, the amount of compensation must be in the agreement with the prosecution.
As with the amicable settlement, the VES can still be adopted if the defendant acknowledges his civil liability in writing and proves that the uncontested part of the damage was compensated. In practice, this will have to avoid that the role of the victim would lead to excessive problems and delays. The victim can then start another procedure before the civil court to obtain compensation for the disputed part of the damage. Only tax and social adminsitration have an effective veto right. - Discretion: the court's review of the VES will now be done behind closed doors. Only if the court subsequently ratifies the VES will this take place in public session. Thus, the rights of defence of the accused, who would still have to appear before the criminal court in the absence of ratification of the VES, must be safeguarded. The strict confidentiality of the VES until possible ratification is crucial for this.
Short-term risk management
Despite the tightened conditions, we believe these methods of handling criminal cases remain interesting for directors and companies. On the basis of energetic negotiations with the prosecution and/or any victims can still come to a reasonable deal that allows the risks of a criminal trial in the short term are mastered.
