We blogged on 16 June 2013 that David Green QC, the Director of the SFO, had called to extend the strict liability offence of failing to prevent bribery (s.7 Bribery Act 2010) so that it could apply to other corporate crime offending e.g. fraud and money laundering. He reiterated that request when addressing the Cambridge International Symposium on Economic Crime recently and it echoes the statement made by the Shadow Attorney General, Emily Thornberry, also in June 2013. Presumably any new legislation would also afford the corporates the defence that they had adequate procedures in place (as per the Bribery Act 2010).
The SFO believes that it needs tougher criminal legislation against corporates because, unlike their US counterparts, it is virtually impossible to successfully prosecute a corporate in the UK. The combination of complex corporate management structures and evidential trails that mysteriously end at middle management levels, and the real difficulty when identifying the ‘controlling mind’ of the corporate, presents the prosecuting authorities with insurmountable hurdles.
The SFO states that it needs more in its armoury if it is going to encourage offending corporates to self-report and enter Deferred Prosecution Agreements (which become available in February 2014).
The simple reason for this is that if there is no real threat of a criminal prosecution against an offending corporate, why would they wish to self-report their criminal behaviour to the SFO or the CPS?
The prosecutors (and this government) are keen to ensure that Deferred Prosecution Agreements are as successful as they have been in the US for prosecuting/regulatory authorities there.
Frankly, with the extraordinary budget cuts that the authorities are facing, these DPAs are a low cost, effective and quicker solution to the detection of corporate crime.
David Green QC was adamant that the SFO would not refuse to accept an investigation on the grounds of cost (which most corporate criminal lawyers suspect has happened in the past) and that the SFO has sixty-eight ongoing investigations. Using DPAs as an alternative to full-blown in-depth investigations and prosecutions would save the SFO huge amounts of money.
This government promised to bring in corporate criminal legislation, but there has been strong criticism of the Bribery Act 2010 by the IOD and UK commerce. They have complained about the problems with onerous compliance, facilitation payments, and hospitality and promotional expenses, and have lobbied to ‘water down’ the 2010 Act, which the government has resisted so far, though sympathetic guidance notes have been issued by both the MOJ and the SFO.
It remains to be seen if the government will bow to pressure about the extension of the strict liability offence to the full range of corporate offending behaviour.
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