The DPA with Airbus was the culmination of nearly four years of investigation into allegations that the company had used external consultants to bribe customers to buy its civilian and military aircrafts in countries all around the world. The SFO investigation was conducted alongside similar ones by French and US authorities, in each of which Airbus has now reached a similar settlement agreement. Therefore, the global sums which Airbus must now pay now exceed €3.5bn. The SFO part of the investigation related to bribery offences in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana, while the French and American investigations covered bribery and corruption in a host of other territories.
Approval for the UK deal was granted by Dame Victoria Sharp, President of the Queen’s Bench Division, sitting in the Crown Court at Southwark 31 January 2020: See Director of the Serious Fraud Office Applicant v Airbus SE (unreported), 31 January 2020. Under the DPA, she explained in para 1, Airbus SE
“must pay a total financial sanction of approaching one billion euros (€990,963,712 including costs) to the Consolidated Fund via the SFO within 30 days of today’s date, made up of the disgorgement of profit of €585,939,740 and a penalty of €398,034,571. To put this figure into context, this financial sanction is greater than the total of all the previous sums paid pursuant to previous DPAs and more than double the total of fines paid in respect of all criminal conduct in England and Wales in 2018.”
The criminality involved was “grave”, says the judge:
“The SFO’s investigation demonstrated that in order to increase sales, persons who performed services for and on behalf of Airbus offered, promised or gave financial advantages to others intending to obtain or retain business, or an advantage in the conduct of business, for Airbus SE. It is alleged that those financial advantages were intended to induce those others to improperly perform a relevant function or activity or were intended to reward such improper performance and that Airbus did not prevent, or have in place at the material times adequate procedures designed to prevent those persons associated with Airbus from carrying out such conduct.”
The sheer size of the financial sanction gives some indication of the risks and rewards of conducting criminal investigations against global enterprises such as Airbus. The judge’s comparison with earlier DPAs and other criminal fines shows the value of succeeding in such an investigation. But it has taken the SFO four years to bring the aerospace giant to book, and an actual criminal prosecution of such a massive case would have been a long, expensive and risky process.
The indictment (which has now been suspended) would have contained five counts of failure to prevent bribery, contrary to section 7 of the Bribery Act 2010. As part of the DPA, the company has agreed to full cooperation with the SFO and its law enforcement partners in any future investigations and prosecutions, and disclosure of any subsequent wrongdoing by the company or its employees, subject to applicable laws. The SFO warns that “If the company does not honour the conditions of the DPA the prosecution may resume.”
The advantages from the SFO’s point of view, as prosecuting authority, are evident. But there are also advantages from Airbus’s point of view. The company itself reported concerns about bribery, and its cooperation is a point in its favour, despite the inevitable bad publicity. By agreeing to the DPA it has managed to cap its liability for the problem, whereas if the case had gone to trial, and perhaps appeals to follow, the costs might have ballooned out of control. And to put the sums in context, the company’s global turnover in 2018 was nearly €64bn and its pre-tax profits over €5bn. So how much, really, will this hurt?
Who gets the money? Not the SFO, unfortunately, nor the courts. Both could do with more funding. In fact both the disgorgement of profit and the financial penalty will be transferred to the Consolidated Fund managed by HM Treasury. That makes it look even more like a sort of windfall tax – a tax on self-confession and corporate coming-clean. And there is certainly an argument that DPAs, like plea bargaining, are a way of buying oneself out of trouble.
On the other hand, for corporate defendants, unless you can identify particular individuals responsible for the bribery, the likely punishments inflicted by the court on a conviction is going to be a financial one. Section 11 of the Bribery Act 2010 provides for imprisonment of an individual for up to ten years, as well as the chance of a fine; but for corporate convicts, found guilty under section 7, the only available penalty is a fine. So unless you think paying a fine is buying your way out of trouble, it seems hard to sustain the idea that a DPA is likewise an easy way out.
The legislative mechanism for DPAs is provided by Schedule 17 of the Crime and Courts Act 2013, which provides for proceedings in respect of the alleged offence(s) to be suspended unless and until the DPA is no longer in force. While the DPA is in force and the proceedings suspended, no other person may prosecute the intended defendant for the same offences. The relevant rules of court are contained in Part 11 of the Criminal Procedure Rules (CrPR) and a Deferred Prosecution Code of Practice (the DPA Code) published jointly by the SFO and the CPS.
In an earlier case, her predecessor Sir Brian Leveson P explained that “a critical feature of the statutory scheme in the UK is the requirement that the court examine the proposed agreement in detail, decide whether the statutory conditions are satisfied and, if appropriate, approve the DPA” – see SFO v v Standard Bank Plc  Lloyd’s Rep FC 102. It is for the court to decide that the deal is “likely to be in the interests of justice and that its proposed terms are fair, reasonable and proportionate”.
He also pointed out the need for the case to be approved in open court: “The engagement of the parties with the court then becomes open to public scrutiny, consistent with the principles of open justice ….”
One final point should be made. Consistent with open justice and public scrutiny, not only should the case be approved in open court, but the judgment should be made freely accessible. The Airbus judgment has indeed been published on the Judiciary’s own website, where you can download a PDF. It is also available via the SFO website, along with a copy of the parties’ agreed statement of facts and a copy of the deferred prosecution agreement itself. So full marks for transparency in some respects. But the Airbus judgment contains references to a number of earlier DPA cases which are only cited by reference to Westlaw document citations, which sit behind a high paywall. They have not been given a Neutral Citation or made available on BAILII (the free judgments database provided by the British and Irish Legal Information Institute). This needs to be addressed. The importance of transparency through publication is well recognised in relation to family law and media claims; it should be just as widely recognised for cases of financial crime.
Paul Magrath is head of product development at the Incorporated Council of Law Reporting for England and Wales and a member of the Transparency Project.