Delayed update of Scottish corporate bribery self-reporting guidance could signal "kilted DPAs" on way, says expert

Out-Law News | 27 Oct 2014 | 10:12 am | 1 min. read

Prosecutors in Scotland could finally be considering the introduction of a Scottish form of deferred prosecution agreement an expert has said, after guidance for companies looking to self-report was extended for a further year without a formal update.

The Crown Office and Procurator Fiscal Service (COPFS), which decides whether to prosecute bribery offences in Scotland, has confirmed that it has extended its self-reporting guidance and approach to considering a civil settlement until 30 June 2015 (5-page / 65KB PDF). A previous version of the guidance, which expired on 30 June 2014, remained on its website until this week.

Anti-corruption expert Tom Stocker of Pinsent Masons, the law firm behind Out-Law.com, has previously called for the new system of deferred prosecution agreements (DPAs) introduced in England and Wales this year to be extended to Scotland. Writing on bribery law news website thebriberyact.com, Stocker said that the reason that the guidance had not formally been updated could be because this extension was being considered by prosecutors.

"A kilted form of deferred prosecution agreement ... could simply entail extending the self-reporting guidance to cover all economic crimes by companies," he said. "Scotland's self-reporting regime is currently very narrow in its application as it is restricted to corporate bribery offences only."

"Scotland is an attractive jurisdiction for a company to self-report (if there are grounds to do so) because settlements are based on disgorgement of the benefit received which … is considered to be the gross profit," he said.

DPAs became available to prosecutors in England and Wales in certain circumstances at the end of February. They are designed to encourage businesses to self-report wrongdoing in the hope of more lenient treatment, including the possibility of avoiding a criminal investigation and potential prosecution if strict conditions set by a judge are met. These conditions could include payment of substantial penalties, the need to compensate victims and submission to regular reviews and monitoring.

Although the 2010 Bribery Act extends to Scotland, the country remains a separate legal jurisdiction from England, Wales and Northern Ireland with different rules on criminal evidence and criminal procedure. COPFS, as the sole public prosecutor in Scotland, has operated an initiative allowing businesses to 'self-report' bribery offences since the Act came into force, with the intention being that it could decline to prosecute in appropriate cases and instead refer the case to the Civil Recovery Unit for civil settlement.

Stocker previously warned that the introduction of more sophisticated DPAs could give companies headquartered elsewhere in the UK a "major incentive" to self-report to the Serious Fraud Office (SFO) in England. In addition, different processes operating in Scotland than elsewhere in the UK could leave Scottish companies "unsure how to proceed should a bribery problem arise" and could "lead companies to conclude that it is best to sweep matters under the carpet".