UK: Further Tensions Emerge Between Judiciary and SFO in Corruption Sentencing

Last Updated: 19 April 2010
Article by Omar Qureshi

On 14 April, John Dougall, a former director of marketing and business development for DePuy International Limited ("DPI"), an orthopaedic products manufacturer, pleaded guilty to conspiracy to corrupt doctors in the Greek public healthcare system, between February 2002 and December 2005. He is the first British citizen to be convicted in this country of a corruption offence for overseas corruption of foreign public officials.

Although Mr Dougall provided significant help to the SFO in its investigation of DPI under an assistance agreement, resulting in the SFO seeking a lenient sentence for his involvement, the Judge decided the minimum sentence should involve a term of imprisonment. This casts a further shadow over the SFO's efforts to persuade businesses to self-report corruption in return for more lenient treatment.

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On 14 April, John Dougall, a former director of marketing and business development for DePuy International Limited ("DPI"), an orthopaedic products manufacturer, pleaded guilty to conspiracy to corrupt doctors in the Greek public healthcare system, between February 2002 and December 2005. He is the first British citizen to be convicted in this country of a corruption offence for overseas corruption of foreign public officials.

Although Mr Dougall provided significant help to the SFO in its investigation of DPI under an assistance agreement, resulting in the SFO seeking a lenient sentence for his involvement, the Judge decided the minimum sentence should involve a term of imprisonment. This casts a further shadow over the SFO's efforts to persuade businesses to self-report corruption in return for more lenient treatment.


Prior to Mr Dougall's involvement, DPI had developed a practice of paying sums through a local intermediary to Greek surgeons as inducements or rewards for purchasing DPI's products. These payments were referred to as "professional education" costs. In reality, they were used to pay cash incentives or to send doctors on "vanity meetings" (i.e. holidays). The cost of these payments was ultimately reflected in the price paid for DPI's products by the Greek healthcare system, so that the bribes were ultimately funded by the Greek taxpayer. The total amount involved was around £4.5m.

Mr Dougall continued the practice for the benefit of DPI. He received no personal benefit from doing so. Once the SFO opened its investigation in May 2008 (following a referral from the US Department of Justice), Mr Dougall fully cooperated with the prosecutor, helping to 'break open' the case and promising to testify in any future trials against other individuals. The SFO said that he "co-operated fully with and provided substantial assistance" to them and had sought a lighter sentence for him as a result, arguing a suspended sentence was appropriate in all the circumstances.

However, Mr Justice Bean decided it was appropriate to give an immediate custodial sentence of 12 months. He said, "I consider the public simply would not understand if someone involved in criminality of that scale were the subject of anything other than an immediate sentence of imprisonment". However, the Judge also recognised there were public policy considerations in seeking to persuade businesses and individuals to self-report and work with the prosecutor to ensure investigations are conducted and concluded effectively and efficiently. On that basis, he gave permission to appeal the sentence, although Mr Dougall's lawyers have not yet confirmed whether they intend to do so. The Judge nevertheless made his own view clear that the public policy issues "did not justify a suspended sentence in a case where corruption was systemic and long-term and involved several million pounds in corrupt payments".


The SFO's July 2009 guidance (see our LawNow here), sought to incentivise businesses to self-report on the basis that they would benefit from more lenient treatment and the opportunity to work with the prosecutor to manage negative publicity. In effect, the guidance appeared to offer companies the opportunity to plea bargain where they self-reported and cooperated fully with the prosecutor both to investigate the wrongdoing and put in place procedures to prevent reoccurrence.

However, the SFO's efforts have been dealt a blow both by this judgment and by Lord Justice Thomas' recent judgment in the Innospec case (see our LawNow here). The SFO has sought to mirror the US Department of Justice's approach to policing corruption through incentivising corporates to self-report, self-investigate and settling cases quickly with penalties far less severe than those that could be handed down following a trial. These recent cases appear to show that the UK justice system is not sufficiently malleable to allow the SFO to operate in this way and to prescribe sentences for corporate corruption that have been negotiated with the wrongdoer as part of a plea agreement.

The SFO's aims in seeking to achieve greater success in the prosecution and conviction of corporate corruption through more pragmatic and efficient practices is understandable, given recent public criticism and its limited resources to handle these difficult investigations. However, as Lord Justice Thomas noted in the Innospec case, some of the methods the SFO have sought to employ are not within their power, absent a change to the criminal rules of procedure. It is reported that the Director of the SFO is in discussion with the judiciary in light of these recent judgments. Whether this will, or even can, result in the sort of changes required to make self-reporting more attractive to corporates in future is uncertain. In the meantime, those who discover corruption within their business that may make the corporate liable, will have a very difficult decision to make, with the present uncertainty regarding self-reporting. It should not be forgotten, however, that corporates who do self-report and cooperate with the authorities will benefit to some degree from more lenient treatment - it just may not be so lenient as they had hoped or expected.

When the offences in the Bribery Act 2010 take effect, which will make it simpler to achieve successful prosecutions for corruption, this problem may be exacerbated. What this shows is that the new bribery legislation is only one of the elements required to enable corporate corruption to be effectively and efficiently investigated and prosecuted. Other elements of the criminal justice framework may also need updating to give prosecutors the powers they need to achieve success within the confines of their limited resources.

Following the enactment of the Bribery Act 2010, we have updated our toolkit, comparing the existing and new bribery law. A copy can be accessed here .

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

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 19/04/2010.

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