Compliance & Regulatory | Assisting the “enemy”?

The SFO recently published its long awaited 'Corporate Co-operation Guidance' which is aimed at providing guidance to companies who are seeking to avoid criminal corporate liability where bribery is suspected.

 

For the first time, the guidance seeks to provide transparency around what the SFO expects by way of co-operation so that this can be taken into account when deciding whether to prosecute companies who suspect bribery to have taken place within their organisation. To be clear, there is no absolute legal duty to approach the SFO with suspicions regarding bribery though not to do so has certain repercussions. One of which, if discovered, will almost certainly be a criminal prosecution rather than being offered a Deferred Prosecution Agreement. 'Co-operation' is defined as providing assistance that 'goes above and beyond what the law requires' albeit the guidance also makes it clear that 'even full, robust co-operation does not guarantee any particular outcome'.

Whilst it is recognised that there is no definitive checklist that would cover every case, the guidance does provide 'some indicators of good practice' such as providing relevant documentation promptly and on time, ensuring that such material is preserved and supplied in a structured way, and identifying material that is abroad and/or in the possession of third parties. There is also an expectation that companies will provide industry knowledge such as details on common practices and potential defences that are particular to the sector. Where internal investigations are concerned, the guidance is not so helpful as it provides that, to avoid prejudicing an SFO investigation, companies should consult with the regulator in a timely way before interviewing potential witnesses or suspects, taking personnel/HR action, or taking 'other overt steps'. This begs the question about what amount of investigation should be conducted by companies before making a disclosure to the SFO. Clearly, whilst a review of some sort would be necessary, it is unclear where the line should be drawn in order to remain in the 'good books' of the SFO.

More controversially, the guidance also tackles the issue of companies claiming legal privilege over witness accounts and any accompanying notes. Whilst it is made clear that any refusal to waive privilege may undermine a company's eligibility for a Deferred Prosecution Agreement, the guidance makes it clear that companies will not otherwise be 'punished' by the SFO. In addition to this, where a company seeks to claim privilege over documents, the SFO now expect this to be backed up a certification from independent Counsel that any such claim is properly advanced. Naturally, companies are likely to be sceptical of the SFO's insistence that they will not be 'punished' if privilege is asserted and be concerned by the SFO's willingness to push boundaries where this issue is concerned! Helpfully, much of the guidance reflects our practical experience of what is expected by the SFO. In particular, the recently published case of R v Hodson is a prime example of the SFO deciding against taking any action against a company who had self-reported its former Director and, with our lead, went 'above and beyond' to assist with the regulators investigation. In return, the SFO secured a conviction and a Confiscation Order to the value of £4.5m (a sum that exceeded the total value of all Orders it was able to obtain in the previous financial year!)Notwithstanding the concerns that are likely to remain regarding the SFO's approach to legal privilege, the prosecution of Hodson is undoubtedly a welcome example to other companies that the SFO are prepared to draw back from pursuing the corporate entity where they can demonstrate 'true co-operation'

Further details of this case can be found here: https://www.sfo.gov.uk/cases/alca-fasteners-ltd/

 

 

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Contact our Compliance and Regulatory team today if you would like to hear more about how your organisation can adequately protect itself where bribery is suspected.