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Civil Recovery Orders Back On the Table for the SFO – by Siobhain Egan

It seemed from last autumn’s comments made by David Green QC, the Director of the SFO, that he was bringing back the prosecuting authority to its prosecutorial roots. However, he has recently stated, “… in the case of a genuine self-report, where, say, a new board had discovered previous misconduct under previous management, had investigated it and reported it to SFO and put in place measures to avoid repetition, then obviously the fact of self-reporting would weigh heavily in the public interest against prosecution.”

This of course makes complete sense, particularly with the advent of Deferred Prosecution Agreements (DPAs) looming. Additionally, there was a fair amount of grumbling and confusion in the City legal press after he made his initial statement last year, and many were wondering whether it would be in any company’s interest to self-report if the SFO were only looking to prosecute.

The SFO have had plenty of successful civil recovery proceedings issued in the High Court over recent years, e.g. Balfour Beatty PLC, Amec PLC, M.W. Kellogg Limited, Macmillan Publishers Ltd, and Mabey & Johnson. It is not difficult for them to be so successful; pt.5 Proceeds of Crime Act 2002, gives the prosecuting body enormous and draconian powers to focus purely upon the property in question. The standard of proof is the lower standard, and they do not need to prove unlawful conduct.

So for a company, self-reporting and the timing of the report are crucial. In reality, to receive the full benefit, the report should be one that the SFO would not have learned of through any other source other than the company. It should be within weeks of the criminal offending coming to light. There has to be full disclosure of the offending behaviour (it’s vital that the company comes with ‘clean hands’) and with proof that such behaviour would not occur again (e.g. better compliance systems, supervision etc).

It is a huge decision to make, and the collateral damage for any company would be enormous, e.g. the effect upon shareholders (see Mabey & Johnson), reputational management, and other contracts/suppliers etc, and so the decision has to be made very carefully. Look to see if the action/event really amounts to a reportable offence.

Which brings us neatly to the current possibility that the government may re-visit aspects of the Bribery Act 2011 e.g. facilitation payments which cause SMEs (and the necessary expensive compliance systems) such concern.

We can advise and represent any individual or company in the High Court facing civil recovery (we successfully resisted such proceedings against an individual recently). We can negotiate with the authorities with a view to reaching a good settlement, if necessary.

We can also help to advise companies who are considering self-reporting to the authorities (based on our 30 years of experience successfully dealing with the authorities) to ensure that all aspects are covered.

We also advise companies regarding compliance systems at reasonable costs.

Contact Jeffrey Lewis or Siobhain Egan, if you are facing any of these issues.

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