Capacity shortage at the Dutch Public Prosecution Service and the possibility of extrajudicial settlement

A key recurring element in the annual report is the capacity shortage. The DPPS emphasises that environmental offences and money laundering are prioritised, but also identifies significant challenges due to capacity problems. These issues affect not only the DPPS but also the judiciary, highlighting the need to deal with cases in a timely and appropriate manner. Examples include a penalty order issued by a public prosecutor (strafbeschikking) or an out-of-court settlement (transactie). In this blog, we briefly explain the differences between a penalty order and an out-of-court settlement and conclude by considering which method of disposal is preferable. 

Penalty order 

With a penalty order based on Section 257a of the Dutch Code of Criminal Procedure (Wetboek van Strafvordering), the DPPS imposes a punishment and/or measure without the intervention of a judge. Acceptance of the penalty order implies an admission of guilt. A penalty order can therefore be equated with a criminal conviction and results in an entry in the judicial documentation (in popular parlance: criminal record).¹    

Out-of-court settlement 

An out-of-court settlement based on Section 74 of the Dutch Penal Code (Wetboek van Strafrecht) is an agreement between the DPPS and the defendant, whereby the defendant usually pays an amount and accepts one or more conditions in order to avoid prosecution. As an out-of-court settlement is offered to avoid prosecution, acceptance of it does not constitute an admission of guilt but merely an acknowledgement of the facts. An out-of-court settlement is also recorded on the criminal record.²  

Regarding so-called ‘high out-of-court settlements’, the DPPS is bound by procedural rules as set out in the Instructions on high out-of-court settlements (Aanwijzing hoge transacties). High out-of-court settlements involve payment of a sum of money to the State with a ‘fine component’³ of EUR 200,000 or more, or a total settlement value of EUR 1,000,000 or more (including any amount for confiscation of unlawfully obtained gains and compensation for damages). One of these procedural rules is that the DPPS must seek advice from an independent review committee and issue a press release to ensure publicly accountability for the handling and settlement of the case.   

Preference for method of disposal 

The annual report shows increasing use of the penalty order:   

Serious offences (misdrijven)  

Minor offences (overtredingen)  

Furthermore, the report indicates that one high out-of-court settlement was published in 2023, compared to four in 2021 and none in 2022. 

Despite the increasing use of the penalty order, out-of-court settlements are still regularly agreed upon on in the context of financial and economic criminal law involving legal entities. The key advantage for the defendant is that an out-of-court settlement does not require an admission of guilt and resolves the case in a relatively short period. It also benefits the DPPS, as it can impose additional conditions or consider remedial or compliance measures taken by the defendant. Therefore, out-of-court settlements remains useful, especially in situations where legal disagreements exist between parties but the facts are not heavily disputed. This is particularly relevant in financial and economic criminal law, where out-of-court settlements can provide a good solution preventing complex cases from getting bogged down in years of court proceedings. 
 
If a defendant is willing to agree to an out-of-court settlement, it is advisable to indicate this to the DPPS in a timely and explicit manner. This can influence the DPPS’s prosecution decision and contribute to a more efficient handling of cases.   

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^1. An exception applies to penalty orders for minor offences (overtredingen) with a fine amount of less than EUR 130.
^2. An exception applies to out-of-court settlements for minor offences (overtredingen) with a settlement amount of less than EUR 130.
^3. Legally, it is not a fine, but the payment of an amount to avoid criminal prosecution. In its publications, the DPPS refers to this as a fine.