Thanks to their use elsewhere in the world – and in light of out-of-court settlements negotiated previously by the Serious Fraud Office – we know what a bad Deferred Prosecution Agreement looks like: a settlement that is not in the public interest, in which companies and individuals can buy their way out of real punishment for serious crime.
We also know what a good DPA would look like. The company must admit wrongdoing; there should be no immunity for individuals (the company should assist their prosecution); there must be a penalty that is a proper punishment and deterrent; the settlement should reflect both harm done to the victims, compensating them where possible, and the corporate gain.
Of course, we will only be able to assess all this if there is transparency. That means we need full details of the crime, and why the SFO felt it was in the public interest to reportedly enter its first DPA rather than prosecute.
Apologists might claim this sets the bar so high that no company will enter a DPA. But if a company with a genuine intent to stamp out bribery has found an isolated circumstance, and has self-reported this to the SFO, it would fit these criteria. The public interest test might also apply if the case depends on co-operation from overseas authorities which is not forthcoming, while the company itself does co-operate. Nobody wants to see great British companies brought low by the actions of rogue employees; but everyone wants to see corrupt corporate behaviour properly punished.
The SFO is itself in the spotlight. It is currently the subject of a Cabinet Office review as to whether it should exist. And while the SFO’s core budget should be in the region of £70m, it is less than half of that.
The SFO should not be manoeuvred or intimidated into a DPA by powerful companies backed by big money and big law firms that don’t co-operate with an investigation and use procedural technicalities to delay justice. While there will be legitimate reasons for the SFO to offer a DPA, corporate bullying is not one of them.
Robert Barrington is executive director of Transparency International
Q&A :Deferred prosecution agreements
Q | What are deferred prosecution agreements?
A | DPAs are deals struck after negotiations between companies and investigating prosecutors that mean companies avoid being prosecuted for corruption, but admit wrongdoing and are fined by a judge at a public hearing.
Q | What do they cover?
A | They can apply to corporate crimes including fraud, bribery, money laundering and forgery. A company has to agree to conditions, fines, changes of practices and a public mea culpa – and can still be prosecuted if it fails to honour those pledges.
Q | Will they lead to backroom stitch-ups?
A | The code of practice says that a DPA will be a “transparent public event”. The process goes before a judge on two occasions, once at a private hearing, then at a public hearing. Anti-corruption groups wrote to the head of the SFO last month to demand the “utmost transparency” including full fine calculations, full publication of the details of wrongdoing and to ensure that victims are consulted as part of the process.
Q | Will they work?
A | It remains to be seen, but considering the SFO’s patchy success in tackling corporate crime, some critics believe companies may decide to take their chances in court. The scheme has been championed in the US where prosecutors have aggressively targeted corporates who are found to have broken the rules. But pressure groups suggest DPAs fail to address the underlying problem of weak UK corporate laws.Reuse content