On 19 July 2021, Mrs Justice May approved two deferred prosecution agreements (“DPAs”) between the Serious Fraud Office (“SFO”) and two unnamed UK limited companies. These DPAs come hot on the heels of the SFO’s DPA with Amec Foster Wheeler Energy Limited, which was approved on 2 July 2021. They represent the eleventh and twelfth DPAs agreed by UK authorities since they were introduced into law in 2014.
Reporting restrictions have been applied pending the prosecution of relevant individuals, so very few details about these DPAs are in the public domain. However, what we do know from the is SFO that:
They relate to charges contrary to s.1 and s. 7 of the Bribery Act 2010.
They relate to UK companies operating within the UK (i.e. they do not relate to overseas bribery).
The two companies will pay a total of £2.5m in disgorgement of profits and a financial penalty within 14 days.
The DPAs contain a parent company undertaking to support improvements to the companies’ compliance programmes and obligations to update the SFO on compliance over the term of the two-year DPA.
The lack of information regarding these DPAs reflects a growing trend from the SFO and court not to publish the statement of facts (or other documentation that could be prejudicial) until individuals have been prosecuted.
The legislation that introduced DPAs into law, the Crime and Courts Act 2013 Schedule 17 requires the prosecutor, on its approval, to publish the DPA (which includes the statement of facts) and the court’s declaration that the DPA is in the interests of justice and its terms are fair, reasonable and proportionate (para. 8(7) of Schedule 17). In practice, the latter is usually addressed by the SFO publishing the court’s preliminary and final judgments approving the DPA. However, para. 12 of Schedule 17 states that the court may order that the publication of this information “be postponed for such period as the court considers necessary if it appears to the court that postponement is necessary for avoiding a substantial risk of prejudice to the administration of justice in any legal proceedings.”. This is the first time that the court has ordered than no documentation whatsoever be published – previously where there were concerns about the prejudice to individual prosecutions, the SFO published redacted versions of the documents (as it did in the XYZ Ltd/Sarclad DPA) and the statement of facts will typically be anonymised (although though may still include identifying factors such as individuals’ job titles).
Although it’s temporarily frustrating for those of us wishing to study the development of DPAs, overall this is a welcome trend. It recognises the different objective and interests of corporates agreeing DPAs and the individuals implicated as a result.
Applying reporting restrictions and delaying the publication of relevant documents prevents those individuals who may be prosecuted in respect of the issues being unfairly prejudiced. However, there is an inevitable tension here. The purpose of this publicity and “open justice” as regards DPAs was to avoid the perception that they were cosy deals negotiated between corporates and prosecutors. While the rationale for not publishing details in cases where individuals may still face prosecution is obvious, the fact is that these details will be published eventually, with effects on the reputations of those involved. Some other points of interest:
The inclusion of a s. 1 charge suggests that the senior managers of the companies or a person to whom the functions of such managers had been delegated were implicated in the wrongdoing, as corporate liability under this provision would only apply where the prosecutor felt they were able to show that the “directing mind and will” was caught up in the offending. This is the first DPA the SFO has agreed that includes a charge under this provision (as opposed to the strict liability corporate failure to prevent bribery offence).
This is the first time the SFO (rather than the CPS) has secured a DPA for bribery where there is no overseas element. The bribery appears to have occurred solely in the UK and shows that while the SFO is predominantly focused on complex fraud and bribery issues with a foreign element, it is not beyond its remit to look closer to home.
The inclusion of a parent company guarantee on compliance improvements is now becoming the norm. This was first used in the Serco Geografix Limited DPA in July 2019 (see our Law-Now on that DPA here) and has been used a number of times since (e.g. for G4S Care and Justice Services (UK) Ltd and most recently, Amec Foster Wheeler Energy Limited).