SFO releases new guidance on DPA's

Posted on 02 November 2020

Coinciding with the announcement that the Serious Fraud Office (SFO) has agreed, in principle, its ninth Deferred Prosecution Agreement (DPA) with Airline Services Limited, the enforcement agency has also updated its operational handbook to include "comprehensive guidance" on its approach to DPAs. The new chapter can be found here.

Introduced in 2014, DPAs provide a mechanism for the SFO or Crown Prosecution Service to charge a corporate entity with a criminal offence, or offences, but to suspend those proceedings on the condition that the corporate entity complies with specified conditions. DPAs are subject to the approval of the Court and approval for the Airline Services Limited. A DPA will be sought from Mrs Justice May, sitting at the Royal Courts of Justice, on 30 October 2020.

Announcing the publication of this guidance, Lisa Osofsky, Director of the SFO, said: "Over the past six years, we at the SFO have been developing our approach to negotiating and entering into DPAs, and in turn, establishing best practice. Publishing this guidance will provide further transparency on what we expect from companies looking to co-operate with us."

Though much of the ground covered will be familiar to white collar practitioners, as it reflects the existing case law and previous statements made by the SFO, it is the first time that this guidance is set out in one place and should provide a useful reference source going forward.

For corporate entities that become aware of misconduct and are considering self-reporting to the SFO, key sections of the guidance will include: (i) the public interest factors in favour of a prosecution (as opposed to a DPA); (ii) indicators of co-operation; (iii) parallel investigations; (iv) DPA terms (including corporate compliance programmes, monitors and financial penalties); and (v) publication. These sections will assist corporate entities in considering whether they are likely to be offered a DPA, following a self-report, and whether the likely terms of any resulting DPA would be viable for the business.

Also of note for corporates is that the guidance on co-operation refers to the need to self-report within "a reasonable time of wrongdoing coming to light", suggesting that the SFO accepts that companies will want to take steps to investigate alleged wrongdoing before approaching them. Although this does not represent a change of approach by the SFO (guidance on corporate prosecutions issued in August 2019 stated that a self-report should be made "within a reasonable time of the suspicions coming to light" and Lisa Osofsky has made public statements to this effect), it is nonetheless helpful that this has been re-stated.

If approved, the Airline Services Limited DPA will be the third DPA entered into by the SFO in 2020, the most of any year since their introduction. It is clear that the SFO are increasingly reliant on DPAs as a key tool in their arsenal, though it is notable that they have not yet successfully prosecuted any individuals following a DPA. Whilst the challenges of enforcing white collar crimes continue, companies should take heed of this guidance, which seems likely to form the bedrock of the SFO's corporate enforcement activity in the coming years.

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