He may have been misreported, but recent proposals by the Solicitor General to introduce deferred prosecution agreements as a feature of US-style plea bargains raises – or raises again – a number of profound issues.
In struggling to function on a tight budget, operating under high public expectations and with antiquated law,
the SFO sought to make up for previous inactivity in the bribery area by striking a number of deals with delinquent companies. Only after those deals had been struck was the judiciary consulted, and the predictable result was a public spat between the judiciary and the executive, the former criticising both the decisions not to prosecute more serious offences and/or the level of financial penalties arrived at.
If a new system is going to give judges here greater discretion, or at least greater involvement, in the resolution process, how will this play with prosecutorial discretion?
If the judge will be able to overturn deals struck between business and the state, where is that certainty of outcome that business needs before it is prepared to negotiate?
Companies here and in the US are often driven to negotiate with law enforcement not because they have uncovered systemic wrongdoing, but because the cost of inquiries and the risk of collateral damage is an even less attractive option. But before deciding whether to fess up to bribery (and few in the States do, most preferring a more neutral admission) corporates must know whether this choice will ultimately find favour with a judge.
Sentencing companies to death in a recession is no way to run criminal justice in a market economy. And expecting multinationals to shell out millions in more than one jurisdiction may lead to the very same corporate demise.
The laws in the US and the UK are not the same. The offences are not identical and nor are the required evidential elements. Furthermore, there does not exist machinery between the UK, the US or indeed any other country investigating a multinational that will provide for a so-called global settlement.
If the driver for the criminal regulation of business is how big a return a country can derive from its investigations, such regulation will be bereft of integrity and, most importantly, predictability.
What will happen to businesses that cannot afford the legal costs of hiring lawyers in each jurisdiction? Will they suffer te management time loss of lengthy inquiries sufficient to inform the board of the company’s vulnerabilities?
What if companies that have been delinquent in the past but have now put matters right are now barely profitable? Will they be prosecuted? One imagines that the Bribery Act 2010 will not be used merely for the prosecution of individuals. Were that to be the case, the deterrent value of Section 7 would be negligible.
The US has had the Foreign Corrupt Practices Act (FCPA) for 34 years. It has failed to deter corporate bribery, nor has it produced a body of jurisprudence that lawyers can use to advise business clients. The number of contested trials in the US has been miniscule; the vast majority are agreed pleas of guilty or deferred, non-prosecution agreements. These are usually rubber-stamped by the judiciary.
All those working in this field support the SFO being given a more intelligent toolkit to address corporate crime, but measures must not be open to criticism as a tax on corporate crime or characterising penal sanctions as a
cost of doing business.
Plea bargaining is in its infancy in the UK. If it is to do justice to both business and those who serve its interests it must be fair, proportionate and transparent. Only the early involvement of the judiciary can guarantee this.
Monty Raphael QC, special counsel, Peters & Peters