When criminal proceedings end without an indictment

Not every investigation ends in an indictment. There are two routes out before that point, and they are legally very different.

Discontinuance

The public prosecutor's office must discontinue proceedings if the act is not subject to a court-imposed penalty, if there is no actual reason for further prosecution, or if a procedural bar exists. Discontinuance is not an acquittal, but it ends the proceedings without any sanction. Under narrow conditions it can be reopened, as long as limitation has not set in – for instance if new evidence emerges.

Diversion

In the case of offences where culpability is not regarded as serious and no serious consequences have occurred, proceedings can be resolved by way of diversion: against payment of a sum, community service, a probationary period or victim-offender mediation. What matters is the outcome: no conviction, no entry in the criminal record.

What this means for companies

Legal entities, too, can be held liable under the Verbandsverantwortlichkeitsgesetz (Austrian Corporate Criminal Liability Act), and diversion is available there as well. For managing directors, the difference between discontinuance and diversion is not only legally relevant, but also matters for reporting obligations towards banks, insurers and principals – a point that often comes up too late in advice.