28 October 2013
Business Crime Solicitors review SFO Directors speech
Speaking at the Pinsent Masons and Legal Week Regulatory Reform and Enforcement Conference, the Director of the Serious Fraud Office confronted the divisive issue of corporate self-reporting, faced up to criticism of the SFO’s lack of prosecutorial power and outlined his plans for the future.
In response to widespread concerns about the merits (and potential dangers) of self-reporting, Mr Green claimed that there are five persuasive reasons in favour of a company reporting instances of suspected criminality to the SFO, including mitigation from prosecution, potential for civil recovery and DPAs and the avoidance of further charges under money laundering legislation.
Addressing the unfavourable comparisons drawn between his organisation and its US counterpart, Mr Green stated that this was down to one very simple legal principle which he believes is unduly absent from UK legislation. US prosecutors operate under a vicarious liability principle which allows them to pursue the company where the criminal acts have been committed by employees or associates. In contrast, UK law requires that the "controlling mind" of the company was at some level aware of those actions a burden which is evidentially difficult to discharge where there is a lack of documentary proof.
To address this apparent deficit, Mr Green sees the answer as lying within the much-talked about section 7 of the Bribery Act 2010. This legislation holds a company liable for the failure to prevent bribery by connected persons and extends the possibility of corporate responsibility beyond UK territorial jurisdiction. Mr Green claims that this section could easily be extended to cover other acts of fraud.
However, this statement was made at the same time as acknowledging (and rebutting) some of the criticisms levelled at the SFO for the lack of action under this legislation. In response, he claimed that prosecutions were ongoing and closed his speech by asking the audience to "watch this space." Whether he was referring to the first full Bribery Act prosecutions or to his postulated future extension of the s.7 corporate offence remains to be seen.