UK: Global Settlements

Last Updated: 4 March 2010

Article by Monty Raphael, Special Counsel, Peters & Peters Solicitors


1. Overall global settlements are clearly desirable to save time and money. Delinquent businesses want to draw a line under their wrongdoing and move on. That is one approach, another is the view that global settlements are imposed by governments seeking to impose extra-territorial jurisdiction and "universal" standards. Certainly there are no universal standards, there is no global harmony in crime control, and no homogeneity of practices, concepts of criminality, jurisprudence or punishment.

2. Companies that trade globally, may bribe globally, pollute globally, price-fix globally. They can only hope that when the day of reckoning comes they will be able to negotiate with the strongest of the leading state powers in whose crosshair sights their conduct has appeared.

3. Until the day when grand corruption ranks alongside war crimes, genocide and torture and merits an international tribunal, we must make do with adapting the matrix of bilateral and multilateral treaties to this purpose. It must be borne in mind that state parties can always contract one another on a case by case basis. Again the phrase "global settlements" pre-supposes a willingness on the part of the corporate parties and, where appropriate, individuals to co-operate in this process.

4. No settlement is possible without consensuality. This requirement itself raises numerous difficulties as the state, corporation and individuals may all have different and often conflicting aspirations as to outcomes. A further complication is that state parties may wish to compete for jurisdictions, corporations will wish to maintain a competitive position to avoid debarment and, of course, individuals to avoid the most severe of sanctions, loss of liberty.

5. In the case of corruption the developed world is by no means constrained in the pursuit of punishing the supply side of corruption. However, priorities, political will, technical capacity, resources and necessary procedures all vary from country to country, even in the OECD. Add to this mix the communal views of the EU, Council of Europe and some supra-national agencies like the UN or the World Bank and you have numerous norms all vying for credibility, if not supremacy. Pragmatism and per case scenarios are all that is possible at the present time. And yet, in advising any of the parties, we as lawyers are asked to devise strategies that involve predicting likely outcomes.

Key considerations in global settlements:

1. Corporate liability

6. Where criminal convictions carry collateral consequences in addition to fines, such as debarment, the question of corporate criminal liability becomes important. However, in some jurisdictions corporate criminal liability is not available at all. Such jurisdictions adhere to the principle societas delinquere non potest, "a legal entity cannot be blameworthy", whereby corporate delinquency is addressed by means of administrative sanctions with criminal liability limited to the responsible individuals.

7. In contrast, the USA follows the doctrine of respondeat superior whereby a corporation may be convicted of a crime when one of its agents has committed a criminal act (i) within the scope of his employment, and (2) for the benefit of corporation.

8. In the UK the picture is more complex. For some offences, a company can be held criminally liable on the basis of strict liability.  For some offences which involve a fault element, a company can be held criminally liable on the basis of the doctrines of vicarious liability and delegation. For serious offences which involve a fault element, a company can only be held criminally liable if a high-ranking officer or employee of the company satisfies the fault element of the offence – the "identification" theory. 

9. Austria, Netherlands, Denmark, Finland, Switzerland, France have recently introduced some form of corporate criminal liability.

2. Sanctions

10. In different jurisdictions different offences attract different sanctions. Debarment is one of the more severe sanctions posing high risk of loss of business. Needless to say the possibility of debarment will feature prominently in considerations on how to structure a settlement in multi-jurisdictional investigations.

11. Of particular concern is Public Procurement Directive (2004/18/EC) (the "Directive"). Article 45 of the Directive provides:

12. "Any candidate or tenderer who has been the subject of a conviction by final judgment of which the contracting authority is aware for one or more of the reasons listed below shall be excluded from participation in a public contract".

13. The following offences are on the list:

(a) participation in a criminal organisation, as defined in Article 2(1) of Council Joint Action 98/733/JHA;

(b) corruption, as defined in Article 3 of the Council Act of 26 May 1997 and Article 3(1) of Council Joint Action 98/742/JHA respectively;

(c) fraud within the meaning of Article 1 of the Convention relating to the protection of the financial interests of the European Communities;

(d) money laundering, as defined in Article 1 of Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering.

14. Unlike previous EU public procurement directives, where debarment was optional, Article 45 mandates the exclusion of suppliers convicted of these offenses.

15. Regulation 23 of the Public Contracts Regulations 2006 implements Article 45 in England. Paragraph 2 of the Regulation accords very limited discretion to contracting authorities to disregard the prohibition only in cases where there are "overriding requirements in the general interest which justify doing so".1

16. In the USA, on the other hand, debarment is clearly discretionary. This is expressly specified in section 9.402 of the Federal Acquisition Regulation 2005:

"(a) Agencies shall solicit offers from, award contracts to, and consent to subcontracts with responsible contractors only. Debarment and suspension are discretionary actions that, taken in accordance with this subpart, are appropriate means to effectuate this policy.

(b) The serious nature of debarment and suspension requires that these sanctions be imposed only in the public interest for the Government's protection and not for purposes of punishment."

17. Section 9.406-1 further provides that "the existence of a cause for debarment, however, does not necessarily require that the contractor be debarred; the seriousness of the contractor's acts or omissions and any remedial measures or mitigating factors should be considered in making any debarment decision". The section goes on to list mitigating factors for consideration of the debarring official prior to arriving at the debarring decision.

18. The list includes, whether the contractor had effective standards of conduct and internal control systems at the time of the improper activity; whether the contractor brought the improper activity to the attention of the appropriate Government agency in a timely manner; whether the contractor cooperated fully with Government agencies during the investigation; whether the contractor has paid all criminal, civil, and administrative liability for the improper activity; whether the contractor has taken appropriate disciplinary action against the individuals responsible for the improper activity; whether the contractor has implemented or agreed to implement remedial measures; whether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs; whether the contractor's management recognizes and understands the seriousness of the misconduct giving rise to the cause for debarment and has implemented programs to prevent recurrence.

19. The mandatory nature of the EU debarment rules makes these considerations largely irrelevant. This militates against settlements that have a bearing on the EU Procurement Directive. Unsurprisingly in such circumstances corporates would be minded to resist the charges brought against them.

20. Largely for this reason the Siemens settlement with US and German authorities, which appears to have avoided the EU debarment rules, has attracted practitioners' attention on both sides of the Atlantic. The parent company (Siemens AG) admitted to violating the books and records provisions and avoided a conviction for bribery. Presumably Siemens believed that its plea would not constitute a corruption conviction under article 45 of the Directive. Significantly no Siemens European subsidiaries pleaded guilty to any charges (only non-European subsidiaries did – Siemens Argentina; Siemens Bangladesh; Siemens Venezuela).

21. Fortunately the obstacles posed by the Directive have also caught the attention of the UK government. In his June 2009 speech at the 5th European Forum on Anti-Corruption Secretary of State for Justice, Jack Straw, expressed his concern that the EU procurement rules can act as "a disincentive for businesses to come clean and change their behaviour, and that they are not necessarily applied consistently across the EU". The Secretary of State commented: "I have asked my officials to look into this further – in terms of the practice of other European countries and the implications of new [UK] plea negotiation guidelines issued earlier this year – and we will raise this with our European counterparts".

3. Self-reporting, immunity and penalty discounts

22. The problem with mitigating factors and debarment in Europe is broader. Perhaps with the exception of leniency programmes in cartel investigations, the link between self-investigation, self-reporting, cooperation and sentence/penalty mitigation is not universally established in jurisdictions outside USA.

23. It is only in 2009 that the UK saw two significant developments – the publication of Attorney General's Guidelines on Plea Discussions in Cases of Serious or Complex Fraud and Self-Reporting Guidelines by the Serious Fraud Office, Approach of the Serious Fraud Office to Dealing with Overseas Corruption.

24. The SFO Guidelines offer the prospect of civil settlement an opportunity to manage publicity as enticements for firms to self-report. As the Guidelines acknowledge, civil settlement, rather than criminal prosecution, would also avoid the mandatory debarment provisions under Article 45 of the EU Public Sector Procurement Directive.

25. The aim of the new anti-corruption strategy is to bring about behavioural change within businesses. This is reflected in the terms of the settlement with the SFO which may include restitution; an independent monitor; a programme for culture change and training; possible discussion about individuals; and a public statement agreed by the corporate and the SFO.

26. The Guidelines acknowledge that "[a] very important issue for the corporate will be whether the SFO would be looking for a criminal or a civil outcome". However they go on to state "[w]ithout knowing the facts, no prosecutor can ever give an unconditional guarantee that there will not be a prosecution of the corporate. Nevertheless, we want to settle self referral cases ... civilly wherever possible." Richard Alderman, director of the SFO, offered a list of factors that will be considered in deciding whether a prosecution is appropriate [Talking Corruption with the SFO, ICID Lecture, 20 10 2009]. These were:

the seriousness of wrongdoing;
whether the incident is isolated;
whether wrongdoing is systemic;
whether continuing Board members derived personal profit from wrongdoing;
whether the group had earlier warning regarding inadequacy of its processes;
whether the group failed to report within a reasonable time;
whether the report was full and accurate.

27. However no guarantees are given and, predictably, there has not been a rush of companies to self-report corruption in the UK to date.

28. The SFO's reluctance to guarantee civil outcomes is understandable. Invariably there will be cases where only criminal prosecution would be in the public interest. The problem is in part due to the mismatch of instruments at the disposal of prosecuting authorities. Unlike the United States, the UK does not have deferred prosecution agreements despite the canvassing by the SFO for the introduction of a similar system in the UK (see speech by Vivian Robinson QC, General Counsel at the SFO, International Co-operation in the Investigation of Serious Fraud and Corruption, 13 August 2009).

29. The Guidelines offer the SFO's assistance in achieving a global settlement. Following a self-report, the SFO would want to establish whether the corporate will "want us, where possible, to work with regulators and criminal enforcement authorities, both in the UK and abroad, in order to reach a global settlement?" However it is also made clear that the SFO will not play second fiddle to the US Department of Justice: "If the case is also within our jurisdiction we would expect to be notified at the same time as the DoJ".

30. In his December 2009 speech, tellingly titled The SFO and DOJ 'Special Relationship': The future of UK/US Co-operation against Overseas Corruption and Other Crimes, Richard Alderman observed:

"We have a number of cases where we are looking at global settlements with the US. I hope that we will be able to make some announcements soon. This will show that our commitment to global resolutions is very real and that we are delivering on this."

31. The Guidelines are a welcome step towards aligning the approach of the SFO with the DoJ. However important differences, notably the deferred prosecution agreements, remain. Where authorities cannot guarantee the same outcome of investigations, multinationals will rightly stay cautious in deciding which authority to approach.

4. Prosecutorial discretion

32. An issue related to diverging regulatory "toolkits" is the divergence in prosecutorial discretion across jurisdictions. Inevitably there will be differences in prosecutorial discretion in deciding:

- whether to charge or not;
- which charges to bring;
- whether to indict or not;
- to negotiate guilty pleas.

33. The right of victims to compel prosecution if the charges are dropped will also be relevant.

34. These differences are likely to be most pronounced between the adversarial criminal systems of the common law world and the inquisitorial systems in continental, primarily civil law, Europe. In the latter systems the prosecutorial powers are often diffused among several officials, examining magistrates and the judges. Victims of crime can often file criminal charges directly with courts. This provides an incentive for the prosecutors to file charges.

35. If the judges are reluctant to shed powers to prosecutors in their own jurisdictions, the problem is only likely to be more acute where the judiciary is asked to approve a settlement reached outside jurisdiction.

36. The UK Court of Appeal decision in R. v Whittle and others [2008] EWCA Crim 2560 offers a good illustration. The facts arose from the Marine Hose cartel. The appellants were the three UK executives that were arrested in Texas in May 2007 for violation of section 1 Sherman Act. Each applicant entered into a formal plea agreement with the US authorities, which included their agreement to plead guilty in the US and to a cartel offence in the UK.

37. Each plea agreement provided that the term of imprisonment would be reduced "by one day for each day of the total term of the sentence of imprisonment imposed upon [him] following his conviction for the UK cartel offence". Part of the agreement was that each applicant would plead guilty to such an offence and further that he would not "seek from the UK court a sentence of imprisonment less than that" provided for in the agreement. The sentences provided for in the respective agreements were 2½ years for Whittle, 2 years for Allison and 20 months for Brammar. However, upon return to the UK the three were sentenced as follows: Allison/Whittle each sentenced to 36 imprisonment; Brammar sentenced to 30 months imprisonment.

38. The Court of Appeal reduced the sentences to those specified in the plea agreements, however, not without disapproval:

"Whilst each applicant through Counsel has invited us to reduce the terms imposed by the judge, none has invited us to reduce the terms below the period specified in the agreement into which he entered. It follows that this court has not had the benefit of the kind of argument from counsel to which it is accustomed; we emphasise this is through no fault of theirs. They were acting upon their instructions and their instructions were imposed upon them by the terms of the plea agreements. We have our doubts as to the propriety of a US prosecutor seeking to inhibit the way in which counsel represent their clients in a UK court, but having heard no argument on the subject we shall express no concluded view."

5. Instruments on concurrent jurisdiction

39. Finally, legal instruments may limit the ability of the defence to negotiate a settlement with one or another authority.

40. In the EU the key instrument is the Council Framework Decision 2009/948/JHA on Prevention and Settlement of Conflicts of Exercise of Jurisdiction in Criminal Proceedings, adopted on 30 November 2009.2

41. Article 10(1) of the Decision provides that "when it is established that parallel [criminal] proceedings exist, the competent authorities of the Member States concerned shall enter into direct consultations in order to reach consensus on any effective solution aimed at avoiding the adverse consequences arising from such parallel proceedings, which may, where appropriate, lead to the concentration of the criminal proceedings in one Member State".

42. Effectively the prosecuting authorities of two Member States can agree where to conduct criminal proceedings. No mention is made of the accused's right to make representations or even right to be informed. The matter is left to national law, as confirmed by Recital 17 which states that the framework decision "does not affect any right of individuals to argue that they should be prosecuted in their own or in another jurisdiction, if such right exists under national law".

43. In fact little is provided by way of objective criteria on which the authorities should reach their decision. Article 11 simply states that in order to reach the decision the authorities shall consider "the facts and merits of the case and all the factors which they consider to be relevant". In contrast, the original, January 2009, proposal contained article 15 which provided for criteria to determine the best placed jurisdiction. This included a general presumption in favour of jurisdiction where most of the criminality had occurred. The adopted Framework Decision contains analogous criteria. However the criteria is only in a Recital (Recital 9). Competent authorities should take it into account but are not obliged to do so.

44. Similarly the 2007 Attorney General Guidance for Handling Criminal Cases with Concurrent Jurisdiction between the United Kingdom and the United States provides neither an obligation to consult or reveal information to the defence, nor any rules or principles for allocation of jurisdiction.

45. The instruments offer no guide to businesses to ascertain what types of cases will be investigated or where.

The author acknowledges the assistance of Vlad Meerovich in the preparation of this paper.


1. The Public Contracts Regulations 2006 are available at

2. The Framework Decision is available at

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.