Plea bargaining a must for anti-corruption success says expert as authorities plan discussions

Out-Law Analysis | 03 Oct 2011 | 9:41 am | 2 min. read

OPINION: The evidence is that the UK is moving towards giving corruption investigators the powers to broker agreements that will settle more cases and encourage more organisations to identify corruption, and it is vital this push succeeds.

Because without better guarantees for organisations that self-report corruption that the people they are dealing with are the ones who can decide their fate, self reporting will dry up.

Why does this matter? Because self reporting is the quickest, cheapest way to uncover corruption and the one that is least likely to result in whole organisations being punished through criminal sanctions for the misdeeds of the guilty few.

In the UK an organisation can come to the Serious Fraud Office (SFO) and outline corruption involving itself that it has uncovered. It can negotiate a settlement on the basis of its co-operation, while the SFO can monitor the co-operation and use further sanctions as a mechanism to ensure it gets as much information as quickly and easily as possible.

But at the end of this whole process IF a corruption case goes before a criminal court the judge can throw out the result of the negotiations and hit the company with whatever penalties are in its power.

So why should any organisation self report?  Corporates crave certainty. If the risk of not reporting is that a judge throws the book at it, but the risk of coming clean is the same, where is the incentive to not only help investigations but trigger them?

There is a better way. The US has something called a Deferred Prosecution Agreement. This involves an organisation that self reports agreeing a series of measures – fines, penalties, reforms – with prosecutors. And courts will uphold that negotiated settlement.

The prosecutor gets all the evidence it needs and has the co-operation of the organisation to effect real change. The organisation can fix a problem it has found without running the risk of facing similar sanctions than those it would face if it had never highlighted the problem in the first place.

The SFO, which understands the need to deliver certainty for corporate where possible, has a way around the absence of such a system in the UK – it can pursue a civil rather than a criminal case. But there will be cases – such as when board members have been involved in fraud or corruption - that a criminal case is in the public interest.

The good news is that the authorities are now actively considering the introduction of a system such as the US's. Indeed Solicitor General Edward Garnier QC of the Attorney General’s Office SFO Director Richard Alderman will shortly address a meeting on the topic.

Alderman has already told the International Development Committee that more certainty is needed in plea bargaining and that legislation may not even be needed to bring this about.

So far the SFO has acted on its plans for reform, and this is a fast-moving area where it should do so again.

Barry Vitou is a a corruption law specialist at Pinsent Masons, the law firm behind Out-Law. Richard Alderman and Edward Garnier will address a meeting at Pinsent Masons's London office on 17 October.