SFO speaks on DPAs

Ben Morgan of the SFO has reflected on the use of DPAs in bribery and corruption cases. He stressed that it is not the UK’s stance merely to require corporates to give back illegal gains – there must be an additional element of punishment and deterrence.

He spoke first of the Standard Bank DPA, which, he said, represented exactly the kind of situation DPAs would be expected to be used for. It was a substantial problem, but self-contained in one area of the business, and the bank took immediate action when it discovered the problem. There was little, if anything, that a prosecution could have achieved that the DPA did not.

The second DPA, in the XYZ case, was an example of how DPAs can be used to limit the negative effects of corporate criminal behaviour on innocent people. Here, the proper penalty for the significant issues the company had, would have put it out of business. The DPA was used to provide terms the company “could just cope with”. Although Mr Morgan did not note this in his speech, a key element of the decision to proceed with the DPA at the time was that XYZ’s new parent had put right the wrongs.

The third DPA was Rolls-Royce and involved conduct that spread over many parts of its business over many years. There was some surprise that a DPA was agreed – even from the judge, who said he had started off by wondering when a prosecution would be appropriate, if not in this case. SFO’s view was, however, that if a company is honest about what has happened, and seriously co-operative in putting it right and, as SFO felt was the case here, there is little more the company could in the end have done to put it right, then a DPA can still be the appropriate outcome.  Mr Morgan said SFO would have been confident to take the matter to court, but asked what it would actually have achieved.

SFO is prosecuting companies who choose to challenge allegations of corruption and will continue to do so. However, its view is that DPAs are the new normal for companies that want to co-operate. Mr Morgan finished by making 6 key points, of which one was that some of those who don’t engage with SFO on resolving their criminal risk will wish they had.