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Q+A - SFO's general counsel talks prosecutorial tactics

Source: Thomson Reuters Foundation - Thu, 4 Aug 2011 11:36 GMT
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LONDON (TrustLaw) – If you find a case of serious corruption in your company and you don’t report it to the Serious Fraud Office (SFO), the chances of you getting caught are higher than ever, says Vivian Robinson QC, general counsel of the SFO.

On his last day at Britain’s anti-graft agency before joining the London office of the U.S.-based law firm McGuireWoods LLP, TrustLaw spoke to Robinson about the Bribery Act, third party due diligence, the benefits of self-reporting and “the one thing that you don’t tell judges”.

What is the role of the General Counsel at the SFO?

The first point to make is that there never was a General Counsel at the SFO before I came. I was appointed in response to one of the recommendations in the de Grazia report some few years ago.

When I came here there were a number of job specifications. The first was to advise the director on difficult matters in respect of cases; either as to the legal aspects or tactical issues. Secondly, was the provision of a link at a high level at the SFO between the SFO and the legal profession so that if counsel or solicitors needed to discuss something with the SFO, they could do it at a level below the director. The third area is to act as the presenter on behalf of the SFO, to address seminars, attend lectures and talk to the press.

Some have argued that the ‘adequate procedures’ defence within the Bribery Act fuels a ‘race to the top’, compelling companies to go overboard in ensuring their compliance systems are ‘adequate’. Do you think that’s the case?

When you talk about a ‘race to the top’, I think most responsible companies would have looked carefully at the six guiding principles in the government guidance, and would have said to their compliance officers and lawyers, as a first step, ‘you’ve really got to look at that and see whether or not our procedures fit in to those six principles’. Because the general thought is that if they do, it would certainly provide you with a defence under the act and it is likely that the SFO would regard a one-off act of bribery as being insufficient to cause us to want to prosecute.

I don’t believe that companies have suddenly said to themselves that, ‘we’ve got nothing in place and that we’ve therefore got to spend vast amounts of money to put together systems which comply with the act’. I think most companies would have had some structure thereupon which they were able to build. Most of these principles are common sense and most responsible companies would have had a framework for them in any event.

Even a medium-sized company can have tens of thousands of third-party agents. In terms of carrying out anti-bribery due diligence on those agents, is that not something that could become very expensive indeed?

What we’d be looking for in terms of ‘adequate procedures’ in general and due diligence in particular with regard to a small and medium-sized company would not necessarily be the same as we’d be looking for in a large multinational corporate because we are conscious of the fact that there are resource implications which a large company are able to accommodate and which small and medium-sized companies can’t.

So far as agents and contractors and sub-agents and sub-contractors are concerned, in the context of due diligence, what we look for is that with regard to the primary supplier or the primary contractor we would expect to see very clear and strong due diligence carried out. But we recognise that when you start drilling down below the prime and sub-contractors and you come to the supply chain, the question arises, how far down those particular chains can a company be expected by us to carry out due diligence. We recognise that. We want steps to be taken to show that they’d done what they could to cascade it down through the supplier or contractual chain. We wouldn’t expect people to be taking huge measures themselves to check up on the supply chain or contractual chain, so long as we had the head supplier, head contractor, major due diligence and an invitation to let their sub-contractors/supplier know what the position was, that would be sufficient.

The SFO has said in the past that it expects the majority of its cases to come via companies self-reporting them.  What makes you think that companies will self-report bribery to the SFO?

I think self-reporting is vital because it is the greatest possible antidote to us taking a case to the courts by way of a prosecution. It is the main feature which indicates to us that a company has recognised that it has a problem and hasn’t sought to sweep it under the carpet. If a company sweeps something major under the carpet, that will tend to make us think that they are deliberately resorting to corruption in order to give themselves an advantage.

Now there’s another aspect to it. Why should they do it if companies say, ‘well what are the chances of the SFO finding out?’ I don’t think that applies anymore. Number one, the investigators in this office are now very efficient and very good. Secondly, there’s now a great deal of cooperation between the various (UK) regulatory agencies, they will tell us things, we will tell them things. Thirdly, you’ve got terrific cross-border cooperation, particularly between us and the United States, they tell us stuff, we tell them stuff. Fourthly, increasing information from whistleblowers. If you put that together as a package, the chances of us discovering serious corruption if it’s not reported to us have become immeasurably increased.

The SFO has been criticised by judges with regards to certain settlements that it has negotiated. Was the criticism of the settlements themselves or simply the way they were presented?

This whole field is a new field. Global settlements are something that are new in this country and because they’re new, there’s no proper body of precedent either in terms of cases that have gone before the courts or particularly in terms of sentencing guidelines. I think if we look back over the past year, the body of case law is probably three: Innospec, Dougall and BAE. The judges, like us, are actually in new territory. And when the judges are in new territory they are naturally cautious and understandably so about what are the correct procedures.

The common denominator between those three cases is that the judges were critical of the way in which the plea negotiation documents that were presented to them were drafted. Because what they were suggesting -and rightly, probably- is that they tended to give the impression that what the judges were being told was what sentence that they should pass. And the one thing you don’t tell judges is what they should do by way of sentence -- that, I think, is what really antagonized the judges.

There were some remarks made in the cases, to suggest that, or certainly in one of the cases, that it must be rare that a serious case of corruption can be dealt with in any way than going through the courts. Now, my respectful reply to that is, the decision on what course to take in any particular case as to whether a case goes through the courts or whether it is dealt with in some civil way, isn’t a matter for the courts, it’s a matter for the prosecution. It’s once we’ve make the decision to prosecute that the courts then have the power to say what they want and it’s our responsibility to make sure that when that happens, the way in which the plea negotiations are conducted is open and that the plea documents are properly put together.

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