Guidance on corporate co-operation from the Serious Fraud Office (SFO) does not provide adequate detail or assurances, solicitors have claimed.
The SFO published advice yesterday on how organisations can ‘go beyond what the law requires’ to work with the fraud-busting agency.
Examples include identifying suspected wrong-doing, together with the people responsible, and reporting this to the SFO in good time. Organisations should also preserve material, have accountants ready to explain financial records, provide industry and background information, and identify potential witnesses and suspects.
On legal privilege, the guidance states: ‘Organisations seeking credit for co-operation by providing witness accounts should additionally provide any recording, notes and/or transcripts of the interview and identify a witness competent to speak to the contents of each interview.’
It adds: ‘When an organisation elects not to waive privilege, the SFO nonetheless has obligations to prospective individual defendants with respect to disclosable materials.’
The document also says that organisations claiming privilege must provide certification by independent counsel. In the past, independent counsel have been appointed by the SFO.
The guidance is less clear on the benefits of co-operation, however, stating: ‘It is important that organisations seeking to cooperate understand that cooperation - even full, robust co-operation - does not guarantee any particular outcome.’
If companies self-report they are more likely to be considered for a deferred prosecution agreement (DPA), thus avoiding prosecution. However, a DPA is not guaranteed and lawyers have complained there is a lack of certainty around self-reporting.
Alison Saunders, partner in the business crime team at Linklaters, said: ‘The document is a start but it doesn’t go far enough in providing corporates with the reassurance and confidence to handle internal investigations and self-reporting in the appropriate way.’
She added: ‘Lisa Osofsky [SFO director] has taken a more reasonable approach to internal investigations. However the guidance doesn’t provide clarity on how much of an investigation should be conducted before self-reporting or speaking to the SFO.’
Louise Hodges, head of criminal litigation at Kingsley Napley, said: ‘The document is silent on key areas including: data protection issues, which have become ever more complex with GDPR; employment law issues; and litigation risk, which often goes hand in hand with a criminal investigation and any assistance provided to the SFO may have a knock-on effect in such litigation.’
Christopher David, counsel in the UK white collar defence and investigations team at WilmerHale, said: ‘Having formal guidance of this nature represents a significant sea change between the old and the new directors, and perhaps indicates that the SFO is looking to engage with companies to resolve alleged corporate wrongdoing more quickly.’
A SFO spokesperson said: 'This guidance will assist the SFO in assessing the co-operation of companies in a consistent way, as well as act as a guide of the expectations the SFO has with regards to corporate co-operation. While each case turns upon its own facts, the SFO hopes this guidance will encourage companies to self-report and to co-operate with the SFO.'