Out-Law News 2 min. read
08 Oct 2013, 3:34 pm
White collar crime expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that the proposals were the latest steps in "the ongoing trend of criminalisation of the corporate world". The proposals, which include the introduction of financial penalties for those who 'blow the whistle' on corporate wrong-doing, are included in the Government's new serious and organised crime strategy paper.
"Incentivising whistleblowers, following in the footsteps of Uncle Sam, shows that the UK Government is willing to consider radical steps to tackle illegal practices by big business," said Vitou. "Rule changes could mean that whistleblowers receive multimillion pound cheques for reporting bribery and fraud."
"This formula is tried and tested in the US where whistleblowers can receive massive, multi-million dollar amounts. Bringing the same programme to the UK would mean more whistleblowers in search of a multi-million payout," he said.
The NCA is a new body that will take the lead on coordinating the UK's response to serious and organised crime that cuts across regional and international borders. It will be responsible for tackling major organised crime, such as drug smuggling or people trafficking, and complex international fraud including cybercrime.
According to the strategy document, the Home Office will now coordinate domestic policy in relation to bribery and corruption. The NCA will be responsible for leading and coordinating work on corruption by organised crime, and will produce regular reports on this theme. It will also support investigations into corruption affecting law enforcement agencies and other areas where staff are at a higher risk of corruption due to their proximity to criminals, and its internal Economic Crime Command will oversee the law enforcement response to bribery and corruption more broadly.
The Serious Fraud Office (SFO) will remain the lead agency for investigating large and complex cases of corporate bribery and corruption, and enforcing the Bribery Act in relation to overseas corruption by UK businesses, according to the strategy document. The City of London Police and Metropolitan Police Service's Proceeds of Corruption Unit will also retain a role, working closely with the NCA to ensure that a "proportionate operational response" is in place to bribery and corruption offences.
The strategy proposes the introduction of a new "single reporting mechanism" for reporting bribery and corruption, to be agreed between the relevant agencies. In addition the Home Office, Ministry of Justice and Department for Business, Innovation and Skills will "consider the case for incentivising whistleblowing", both through the provision of financial incentives and through the possible adoption of an equivalent to the False Claims Act in the US. These provisions allow whistleblowers to bring an action against an organisation that is defrauding the Government, and then receive a large share of any penalties imposed.
"Introducing a US-style False Claims Act to tackle scandals in government procurement would be a game-changer, but not a surprise," said white collar crime expert Barry Vitou. "Britain has a big hole in its budget and needs to do everything it can to reduce leakage from its coffers. These proposals will assist in that and are likely to get popular support."
However, he said that the changes set out in the strategy document would not be "the last phase in the overhaul" of the UK's corporate crime regime.
"Next on the list is likely to be demands to make it easier to prosecute corporates in the UK," he said.