UK: Court Of Appeal Overturns Prison Sentence in Corruption Case

Last Updated: 20 May 2010
Article by Omar Qureshi and Joe Smith

As reported in our previous Law-Now , on 14 April 2010, John Dougall, a former director of a UK medical devices manufacturer, became the first British citizen to be convicted in the UK of a corruption offence for overseas corruption of foreign public officials. Following an appeal, the Court of Appeal has reduced his sentence to a suspended prison term, but reiterated the seriousness of corruption offences.

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As reported in our previous Law-Now , on 14 April 2010, John Dougall, a former director of a UK medical devices manufacturer, became the first British citizen to be convicted in the UK of a corruption offence for overseas corruption of foreign public officials. Following an appeal, the Court of Appeal has reduced his sentence to a suspended prison term, but reiterated the seriousness of corruption offences.

Background

Prior to his conviction, Mr Dougall had entered into a cooperation agreement with the Serious Fraud Office ("SFO"), as a result of which the SFO had made representations on his behalf that a suspended sentence would be appropriate. Although this was not accepted by the lower-court Judge, he gave permission to appeal the sentence due to the public policy issues raised.

On 29 April 2010, the Court of Appeal suspended Mr Dougall's sentence in light of the particular circumstances of the case, including: "[T]he value of the defendant's early admissions of guilt, the considerable assistance given by him to the authorities investigating complex multi-jurisdictional corruption, and the public interest in bringing these cases to justice, as well as the contribution the defendant may already have made and intends to continue to make to that process..." .

Citing the decision of Thomas LJ in the recent Innospec case (see our earlier Law-Now ), the Court of Appeal has emphasised the "true constitutional position" that it is for the Court (and not the SFO) to make sentencing decisions in cases of fraud or corruption. The decision also highlights aggravating and mitigating factors that the Court may take into account when sentencing an individual convicted of corruption who has formally agreed to co-operate with the investigating authorities.

A full copy of the judgment can be found here .

Plea Agreements

The outcome of the appeal for Mr Dougall is a sentence that, seemingly, is the same as was recommended to the Court by the SFO. However, the Court of Appeal was at pains to stress that this result was not reached through the adoption of the recommendations of the SFO. It was solely the result of a pragmatic approach to sentencing, in the particular circumstances of the case.

The Lord Chief Justice, who gave the lead judgment on the appeal, fully endorsed the remarks of Thomas LJ in the Innospec case, that "a plea agreement or bargain between the prosecution and the defence in which they agree what the sentence should be, or present what is in effect an agreed package for the court's acquiescence is contrary to principle". He noted that neither the Attorney General "Guidelines on Plea Discussions" nor sections 71-75 of the Serious Organised Crime and Police Act 2005 ("SOCPA") (which provide for sentencing reductions where a defendant assists the authorities in pursuing others – i.e. turning "Queens Evidence") envisage that such an agreement is permissible.

Sentencing

The aggravating and mitigating features of the case – which included recognition of Mr Dougall's full cooperation with the SFO pursuant to a SOCPA agreement, were considered. The Court considered the following mitigating factors to be important:

  • The corrupt practices predated Mr Dougall's involvement
  • More senior executives in the company knew of and instructed the continuation of the corrupt practices - Mr Dougall, was a middle-manager acting under the instructions of his bosses
  • Mr Dougall had attempted at an early stage to end the corrupt practices, but was overruled by more senior staff
  • Mr Dougall received no personal benefit from the corrupt conduct and was previously of good character.

However, the Court rejected the SFO's arguments that:

  • The only realistic incentive for "white-collar" offenders to cooperate was the chance to avoid an immediate custodial sentence - the implication that a suspended sentence should always be available to white collar offenders on the basis that, if this were not the case, the SOCPA process would become redundant was rejected. The comments of Thomas LJ in Innospec was reiterated – white-collar crime is not a more respectable form of crime, and does not by its nature warrant avoidance of a custodial sentence; the Court maintained that "the suspended sentence should only be imposed where there are particular features of the appellant's involvement in the crime, including matters the of mitigation, which justify it. That is fact specific".
  • The first person to co-operate with investigating authorities should receive the most favourable sentencing outcome – the Court flatly rejected the invitation to adopt this US style approach, pointing out that there is no such principle under English law; cooperation is a mitigating factor which will be considered in light of the "overall context of the case, the defendant's criminality and the level of his culpability, the circumstances in which he came to co-operate and the extent of his co-operation".

Nevertheless, the Court acknowledged that a combination of sentencing factors could result in an unsatisfactory situation where the reward for full co-operation in a SOCPA agreement was disproportionately small compared to the substantial burden shouldered by a defendant entering into such an agreement in terms of the ongoing cooperation this entailed. This was a particular problem where the appropriate sentence in all the circumstances was low.

The Court therefore concluded that in cases where the appropriate sentence for an offender (taking into account the level of criminality, features of mitigation, an early guilty plea, full cooperation with the authorities and compliance with a SOCPA agreement) would be 12 months or less, the argument for a suspended sentence was "very powerful" – albeit not to be seen as an automatic outcome in every case.

Comment

This decision clarifies the apparent benefits available to individual offenders who assist and co-operate with the investigating authorities where they are implicated in wrongdoing. However, the case is fact specific and, in terms of sentencing guidance, the application of this decision is limited; the Court has only "spelled out the appropriate guidance in cases where the appropriate sentence is 12 months or less".

The Court has, however, delivered a further blow to the SFO in its seeking to influence sentencing decisions, to the extent that this has been the SFO's aim. The Court has yet again made clear that the power and responsibility of sentencing lies with the Court, and the Court alone. While it may be appropriate for the SFO to conclude a plea agreement with an offender, it should not seek to make recommendations on sentencing. While the SFO has welcomed the decision, it will need to re-visit its strategy to encourage whistle-blowing and to promote self-reporting, in light of the legal and procedural limitations it faces.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 18/05/2010.

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