The Serious Fraud Office will not seek deferred prosecution agreements (DPAs) for every corporate case it pursues, one of its senior lawyers said yesterday.
Following Monday’s formal agreement of the UK’s first DPA, in Serious Fraud Office v Standard Bank plc, Ben Morgan (pictured), joint head of bribery and corruption at the SFO, told senior in-house lawyers that DPAs were ‘not the answer to everything’.
Morgan was giving a speech on DPAs and the use of section 7 of the Bribery Act (the offence of failure to prevent a bribe) at a conference in London.
He indicated that the SFO would be sceptical about offers to cooperate in the hope of a DPA. Law firms carrying out investigations in parallel with the SFO ‘will litter their correspondence with pledges of cooperation, but in fact seek to hinder, delay and generally disrupt what we are doing,’ he said. ‘We see these efforts for what they are, too, “pseudo-cooperation”.’
Morgan said there was ‘no magic language' that can be sprinkled over lawyers’ correspondence that changes the SFO’s assessment of how much cooperation a company has actually offered. ‘And when it comes to a DPA, that assessment is crucial. We will only invite a company into DPA negotiations if our director is persuaded that they have offered genuine cooperation.’
Every law firm the SFO dealt with told it their corporate client would cooperate fully with its investigation, ‘but only a percentage of them actually do’, Morgan said, warning businesses: ‘If your instructions to your external lawyers are to cooperate with us, make sure they are really doing that.’
That meant prompt reporting, scoping and conducting their own investigation in conjunction with the SFO, ‘taking into account our interests in doing so and providing access to the kind of material we need to test the quality of evidence gathered and your own conclusions on it’.
Discussing adequate procedures and whether there was a legitimate defence if a section 7 offence has taken place, Morgan said it was an area ‘that suffers from too much navel-gazing’.
‘Where the risks and red flags are prevalent, it seems to me no amount of just sticking to a policy is going to be adequate, in the final reckoning. What is really needed is a culture in which people are able to spot what is in front of them, and react to it. The question people exposed to high-risk situations need to ask themselves shouldn’t be, “Have I got a policy that makes this OK?”, but rather, “Is this, in fact, OK?”.’
Morgan also told lawyers not to interpret the SFO’s willingness to go down the DPA route in Serious Fraud Office v Standard Bank plc ‘as a desire to force a DPA on to every corporate case’ it takes on. ‘It is a high bar, for a DPA to be suitable, and where it is not met we have the appetite, stamina and resources to prosecute in the ordinary way.’