New SFO guide to DPAs: material change, or confirmation of approach?
Last week, the Serious Fraud Office (SFO) published a comprehensive guide to its approach to Deferred Prosecution Agreements (DPAs).
Sam Tate, Head of our White Collar Crime and Compliance, and Lucy Kerr believe the guidance represents less of a material change to the existing procedure and more of a welcome confirmation of the SFO's approach and its priorities. They have shared their five key takeaways from the detailed guidance:
- Admissions of guilt: The guidance confirms that a company entering into a DPA is not required formally to admit guilt in respect of the offences charged in the indictment, albeit it will need to admit the contents and meaning of key documents referred to in the Statement of Facts that accompanies the DPA.
- Approach to cooperation and privilege: Cooperation with the SFO remains a key priority for the SFO in considering whether to offer a DPA (and when it comes to deciding on the discount to be offered in relation to any financial penalty). Cooperation is confirmed to include the well-established steps of self-reporting the wrongdoing to the SFO, taking remedial action and preserving evidence, amongst others. The guidance also reinforces the SFO's longstanding view that waiving privilege over material is considered to be a significant sign of cooperation (although the guidance confirms that a company cannot be penalised for maintaining privilege).
- Identification of third parties: The guidance indicates the SFO may intend to move away from its previous habit of identifying individuals in DPAs, aligning itself more with the approach of the Financial Conduct Authority, which maintains anonymity for third parties in its public enforcement notices. The guidance highlights that consideration must be given to compliance with the Data Protection Act 2018 and the European Convention on Human Rights when considering whether to identify third parties in a DPA. Therefore, we expect more anonymisation for individuals in future DPAs.
- Financial penalty: The guidance acknowledges that calculating the profit made by a company as a result of the wrongdoing (which forms the basis for any disgorgement payment and/or financial penalty) may not be a "straightforward exercise" and the guidance observes that accountancy advice may be helpful to companies.
- Discounts: The guidance confirms the established principle that any discount on a financial penalty under a DPA should be comparable to a fine imposed as a result of a guilty plea in a prosecution. The guidance goes on to acknowledge the precedent that has been set in the majority of previous DPAs for awarding a 50% discount in recognition of the level of cooperation habitually offered to the SFO.
To access the SFO's guide to its approach to DPAs, click here.
For more information, or to discuss any of these takeaways further, please do not hesitate to contact the us or visit our corporate crime page to find out how our team can help.