Answer ... The Serious Fraud Office (SFO) is likely to look favourably on companies that self-report – but only if this is part of a genuine attempt to put right the wrongs when the company’s management have become aware of them. It is no guarantee that a prosecution will not be brought.
In the case of the Sweett Group, the company only reported its bribery just before a newspaper article about it was published. It then failed to report other illegal payments until the SFO had begun its investigation. The company was convicted and ordered to pay £2.25 million.
Deferred prosecution agreements (DPAs), introduced to the UK legal system under the Crime and Courts Act 2013, are an incentive for companies to self-report. A DPA is an agreement that is reached between the SFO or CPS and an organisation that could be prosecuted for a corporate crime offence. The agreement, made under the supervision of a judge, allows a prosecution to be suspended for a set period as long as the organisation meets certain specified conditions. If the company does not meet these conditions, the DPA can be ended and a prosecution can be brought.
The value of cooperation was highlighted when the SFO agreed a DPA with Rolls-Royce in 2017 in relation to systemic bribery in a number of countries. Rolls-Royce had not self-reported the wrongdoing, but in approving the DPA Sir Brian Leveson QC highlighted the “extraordinary cooperation” the company had offered investigators – and the cooperation secured Rolls-Royce a 50% discount on the penalty that was imposed.
But it should also be noted that if the bribery or corruption is considered so large or endemic that it is in the interests of justice to bring a prosecution, no amount of cooperation or self-reporting will prevent one from being brought.
Answer ... Having an existing anti-corruption compliance programme is a defence if the company is charged under Section 7 of the Bribery Act 2010: failure to prevent bribery. The company will need to prove that it had adequate procedures designed to prevent persons associated with the corporate from acting corruptly. But Skansen (referred to in questions 1.5 and 3.4) indicates how high the bar is set when it comes to what constitutes adequate procedures.
Answer ... For a company to be found guilty of the general offences under Sections 1, 2 and 6 of the Bribery Act 2010, the prosecution must show that the necessary mental element can be attributed to the “directing mind” of the company: it must prove that the offence has been committed with the consent or connivance of such a senior officer. The challenge the company faces is to disprove such allegations.
Answer ... In criminal proceedings, plea bargaining and settlement agreements are not options open to any defendant, whether a company or an individual.
However, under the Code for Crown Prosecutors, defendants can agree to plead guilty to certain charges and prosecutors can accept this if they think that the court is “able to pass a sentence that matches the seriousness of the offending”. Companies do have the option to enter into a DPA if the SFO feels it is appropriate to offer one.
While there is no plea bargaining as such, taking a strategic approach and knowing when to challenge or cooperate with investigators can have a significant effect on the outcome of an investigation.
The Attorney General’s Guidelines on Plea Discussions in Cases of Serious or Complex Fraud allow a company and individuals to enter into pre-charge plea negotiations with a prosecutor on how matters should proceed.
Answer ... An individual convicted in a magistrates’ court of an offence under Section 1, 2 or 6 of the Bribery Act can be imprisoned for up to 12 months, fined up to £5,000 or both. If convicted in a higher court for any of these offences, the maximum penalty is 10 years’ imprisonment, a fine or both.
A company guilty of an offence under Section 7 can be fined. The Sentencing Council Definitive Guidelines on Fraud, Bribery and Money Laundering indicate that the court should ensure that the fine is large enough to have a real economic impact on the company, “which will bring home to both management and shareholders the need to operate within the law”.
The Proceeds of Crime Act 2002 can be used by prosecuting bodies to recover criminal assets, while the Company Directors Disqualification Act 1986 allows the disqualification of directors for general misconduct.
Debarment from competing for public contracts can be imposed under the Public Contracts Regulations 2006. However, in a DPA reached between the SFO and Serco Geografix Ltd in 2019 (see question 6.3), the company and its parent company were not barred from such contracts, even though the DPA related to fraud and false accounting regarding public contracts.
DPA fines are calculated by reference to the value of the wrongdoing, the need to remove the benefit of the bribery/corruption and the worth of the company. While the possible impact on shareholders and employees can be considered, it is envisaged that in some cases it will be necessary to impose a fine to extinguish a company.
Answer ... There is no statute of limitations. A company or an individual can be charged under the Bribery Act, the legislation that was in place before the act or both, depending on when the alleged offence or offences were committed. There is no time limit on when charges can be brought.