When Does a Deferred Prosecution Agreement Actually Expire?

Fatima Jama evaluates the Divisional Court’s ruling in Guralp Systems Limited v Director of the Serious Fraud Office [2026] EWHC 37 (Admin).

Introduction

The Divisional Court delivered crucial guidance in Guralp Systems Limited v Director of the Serious Fraud Office [2026] EWHC 37 (Admin) on the enforceability of Deferred Prosecution Agreements (“DPA”), holding that such agreements remain in force beyond their specified expiry date when financial terms remain unsatisfied.

In a decision handed down on 13 January 2026, Lord Justice Edis and Mr Justice Calver addressed a question of fundamental importance to corporate criminal enforcement: Can prosecutors take action against a company that fails to pay agreed sums by the deadline specified in a Deferred Prosecution Agreement?

The High Court’s answer, yes, provides essential clarity on the scope of DPAs and confirms that these statutory instruments cannot be rendered ineffective by the simple advantage of allowing time to run out.

The Background

Guralp Systems Limited (“GSL”) entered into a DPA with the Serious Fraud Office (“SFO”) on 22 October 2019, following the company’s admission of conspiracy to make corrupt payments and failure to prevent bribery. The agreement, approved by the late William Davis J, required GSL to pay £2,069,861 in unlawful profits within five years.

The DPA’s critical paragraph stated that it was “effective for a period beginning on the date on which the Court makes a declaration under Schedule 17, Section 8(1) and (3) of the Crime and Courts Act 2013 and ending on or before 22 October 2024, when the financial terms set out in Paragraphs 13-14 below have been fully satisfied.”

By midnight on 22 October 2024, GSL had paid nothing. The SFO issued a breach application on 21 November 2024, 30 days after the apparent expiry date. GSL challenged the court’s jurisdiction, arguing that the DPA had expired and with it the SFO’s right to enforce its terms.

The Jurisdictional Gateway

Before addressing the substantive dispute, the court first confirmed its own jurisdiction to hear the appeal. The Senior Courts Act 1981 permits appeals by case stated from Crown Court decisions, except those “relating to trial on indictment.”

The court held that DPA enforcement proceedings do not fall within this exclusion. As the judges observed, “the effect of a DPA is to prevent a trial on indictment from ever taking place, provided its terms are complied with.” Once a DPA is approved and criminal proceedings suspended, “a trial on indictment is impossible.”

The decision produces “a sensible result in line with the statutory purpose,” ensuring prosecutors can challenge adverse judicial rulings during the suspension period, whilst defendants are not left without remedy until an actual trial occurs.

Expiry or Enforcement?

GSL’s case was straightforward. Schedule 17 to the Crime and Courts Act 2013 requires every DPA to specify an expiry date. Paragraph 4 of the DPA identified 22 October 2024 as that date. Paragraph 9 of Schedule 17 permits breach applications only when a DPA “is in force.” The application was filed when the agreement had expired. Therefore, the court lacked jurisdiction, and the suspended criminal proceedings must be discontinued under paragraph 11 of Schedule 17.

The SFO’s response required the court to construe the DPA as a coherent whole. Paragraph 4 specified that the agreement would end “on or before 22 October 2024, when the financial terms set out in Paragraphs 13-14 below have been fully satisfied.” The natural meaning was that compliance with the financial terms would trigger expiry on or before that date. The provision did not specify what would happen if the financial terms remained unsatisfied.

However, multiple other provisions anticipated enforcement action in the event of non-payment. Paragraph 14 expressly stated that failure to pay by the deadline “will constitute a breach of this Agreement.” Paragraphs 25 and 26 established a 30-day notice procedure before the SFO could commence breach proceedings. These provisions would be rendered meaningless if the DPA automatically expired at midnight on 22 October 2024.

The Judgment

The Divisional Court firmly endorsed the SFO’s interpretation. In doing so, it emphasised that DPAs are not ordinary commercial contracts, but statutory instruments designed to operate in the public interest.

As the court explained, “the agreement concerned is not a commercial contract negotiated between commercial organisations. It is an agreement of a kind which was created by statute and which is intended to operate in the public interest.” Such agreements can only be reached between designated prosecutors and corporate entities when prosecuting specified financial or corporate crimes. They cannot take effect without judicial approval following a public hearing.

The judges noted that William Davis J, when approving the DPA in 2019, understood that enforcement action could follow non-payment. In paragraph 41 of his original judgment, he had stated: “It also must be recognised that another consequence of GSL failing to meet the terms of the agreement might be that the company will be prosecuted.”

Counsel for GSL at that hearing had not suggested the judge had misunderstood the contract. There was no evidence that GSL held a different view and deliberately remained silent, which “would have involved a failure to deal with the court and the SFO in good faith… In these circumstances it appears that all parties to the hearing in October 2019 understood that if the money was not paid by the expiry date the SFO could take the steps which it has now taken to renew the criminal proceedings.”

The court applied established principles of contractual interpretation from Arnold v Britton [2015] AC 1619, focusing on what “a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean.”

Against this background, the judges concluded that “very clear words would be required to show that it was the intention of the parties that GSL would be relieved of any obligation to pay any part of the disgorged profits which remained unpaid at 22 October 2024. There are no such clear words; indeed, that construction would be quite contrary to the interests of justice which the hearing in October 2019 had been concerned to promote.”

Paragraph 4 specified that the agreement would cease to have effect on or before 22 October 2024 if GSL satisfied the financial terms. This represented the expiry date for a compliant company.

Paragraph 7 reinforced this interpretation, expressly providing that if GSL “fully complies with all its obligations under this Agreement,” then the SFO would not continue prosecution and “at the conclusion of the Term the Agreement will expire.” The necessary corollary was that “if the financial terms have not been fully satisfied by GSL by 22 October 2024 then (i) the SFO is free to continue to prosecute GSL and (ii) the DPA remains in force.”

The enforcement provisions, particularly paragraphs 25 and 26 establishing the 30-day notice procedure, demonstrated that the parties contemplated action being taken after breach was established. Reading paragraph 4 in isolation “from the rest of the DPA and from its context” would render these provisions nugatory.

The court held that the DPA remains in force “for the purpose of dealing with GSL’s breach of contract.” The SFO may either seek variation of the terms under paragraph 10 of Schedule 17 or make a breach application under paragraph 9. To enable fair procedure, “the SFO is afforded a reasonable period of time in order to determine whether to make such an application to the court and if it determines to do so, to make it.”

The SFO’s application, filed 30 days after the payment deadline, was “certainly made within a reasonable time.” At the expiry of such reasonable time, if no application has been made, the DPA would then expire.

The Unanswered Question

The court did not specify the maximum duration for which a DPA might remain in force post-expiry date before any application is made. The judges noted only that the SFO’s application “was certainly made within a reasonable time and it is not necessary to consider how much longer may have been available before the DPA would have expired.”

This leaves open the question of how long the enforcement window extends. The contractually-specified 30-day notice period is the time GSL must be given to respond to the SFO’s written notice of breach before the SFO commences court proceedings. This notice period operates as part of the procedural fairness machinery in paragraphs 25-26 of the DPA. Separately, the court held that the SFO must make its breach application within a “reasonable time” after the payment deadline expires. In this case, the SFO’s application 30 days after the deadline satisfied both requirements, but these represent related yet distinct timeframes, one protecting GSL’s right to respond, the other limiting how long the DPA remains enforceable without action.

The judgment says at paragraph 48 that “at the expiry of that reasonable time, if no application has been made to address the breach, the DPA will expire”. This suggests the window might close if the SFO takes no action, but remains open once an application is filed.

Future cases may require judicial guidance on this temporal boundary. However, the court’s emphasis on the statutory scheme and the interests of justice suggests that prosecutors will be afforded sufficient time to conduct necessary assessments and commence proceedings, provided they act with reasonable expedition.

Conclusion

The Divisional Court’s judgment in Guralp Systems Limited v Director of the Serious Fraud Office [2026] EWHC 37 (Admin) represents an important contribution to the developing law on DPAs. By confirming that such agreements remain enforceable after their stated expiry date when financial terms remain unsatisfied, the court has protected the integrity of this corporate enforcement mechanism. The ruling clarifies that the expiry date specified in a DPA operates conditionally: it marks the automatic termination point when the company has fully complied with its obligations but does not extinguish enforcement rights when financial terms remain unsatisfied. The expiry date functions as the intended conclusion for compliant companies, not as a temporal shield behind which non-compliant companies may shelter from accountability

The ruling demonstrates sophisticated contractual interpretation that looks beyond isolated paragraphs to discern the parties’ objective intentions from the agreement as a whole and its unique statutory context. As instruments of criminal justice subject to judicial scrutiny and approval, DPAs must be construed to give effect to their public purposes, recovering proceeds of crime, imposing appropriate penalties, and securing future compliance, rather than as commercial contracts where parties may seek technical escape routes.

Prosecutors retain a reasonable window after the specified expiry date to assess whether breach has occurred and initiate appropriate proceedings, with the length depending on circumstances including any contractually-specified notice periods. For corporate defendants, the judgment confirms that payment obligations are enforceable commitments backed by the ultimate sanction of renewed criminal prosecution, and that companies cannot simply run down the clock to claim immunity from enforcement.

The enforcement of DPAs now proceeds on a firmer foundation, with greater certainty about the temporal scope of these important tools in combating and deterring corporate crime.