The BRIBERY ACT 2010: Sanctions & Incentives. Roderick Macauley

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1 The BRIBERY ACT 2010: Sanctions & Incentives Roderick Macauley

2 OUTLINE Bribery Act as a legislative model Incentives theory S.7 corporate failure to prevent BA enforcement and incentives Deferred Prosecution Agreements and BA cases

3 LEGISLATIVE MODEL International recognition Supports high global standards in commercial bribery UK businesses ethical guarantee Corporate failure to prevent Leading legal incentives model Supply side support for demand side initiatives

4 INCENTIVES THEORY Violation gains Sanctions + Incentives Stakeholder the State Standard setting role legal Criminal/administrative sanctions Deterrence/enforcement Legal incentives - mitigating

5 BA s.7 FAILURE TO PREVENT Combines robust offence and sanctions with an equally robust legal mitigation incentive Policy - adequate procedures defence and corporate good governance Ministry of Justice guidance and emerging standards e.g. BSI 10500

6 INCENTIVES & ENFORCEMENT Section 7 cases Corporate self referrals What charge? Corporate centre complicity - section 1 (no statutory defence) Section 7 statutory defence - case review go to trial? Civil recovery (N.B. on basis of predicate offence where section 7 defence applies) Deferred Prosecution Agreements mitigation incentive - February 24 th

7 DPAs SCOPE AND PRINCIPLES Scheme Section 45 and Schedule 17 of the Crime and Courts Act 2013 Parties Prosecutors: SFO & CPS Organisations: bodies corporate, partnerships or unincorporated associations Offences Applies only to economic/financial crime Listed in Schedule 17 includes fraud and bribery Principles Transparency judicial scrutiny and publication compare U.S scheme Consistency & clarity - DPA Code of Practice for Prosecutors published 14 February 2014,

8 PROCEDURE Stage 1 Self referral or police/prosecution investigation. DPA appropriate? Organisation agrees to voluntarily enter into DPA process. Private discussions between parties on terms Stage 2 Proceedings commenced in the Crown Court. Preliminary hearing in private. Judge applies 2 tests: interests of justice, and emerging terms & conditions would be fair, reasonable and proportionate Stage 3 Agreement developed to judicial indications Court hearing in private - same 2 tests - approval of the proposed DPA package Stage 4 Hearing in open court - DPA approved indictment formally laid and suspended outlines and explains and formally approves the DPA agreement is signed and becomes binding

9 DPAs - Content Statement of facts Admission of guilt not required, but must accept wrongdoing occurred Must be agreed by the parties court will not resolve areas of dispute Duration Expiry date to be specified Terms Non exhaustive list in Schedule 17 - compensation, financial penalty, costs, compliance measures No terms have mandatory inclusion status Disgorge any profits

10 Supporting guidance DPAs Code of Practice for Prosecutors Produced by the Serious Fraud Office and Crown Prosecution Service General principles and decision making for use of DPAs Sentencing Guidelines Produced by the Sentencing Council New guideline on sentencing corporate offenders covering many of the offences for which a DPA could be made Criminal Procedure Rules Produced by the Criminal Procedure Rule Committee Framework for the various hearings

11 Breach and Variation Breach Minor breaches envisage provision in the DPA - parties to attempt to agree facts of minor breach, corporate party to rectify immediately Failing that, court to decide if there is a breach on the balance of probabilities. Parties to propose an agreed remedy, judge to vary DPA Variation (only prosecution can apply, only judge can vary) Where court finds a breach parties invited to remedy Anticipated breaches

12 Termination Termination (only judge can terminate) If breach is too material for variation, or If parties are unable to agree a suitable remedy, or If the court does not approve a proposed remedy Post termination Monies paid under the DPA prior to termination are non-refundable Prosecution can apply to lift suspension of indictment and recommence proceedings