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Deferred prosecution agreements - 9th DPA confirmed and revised guidance issued

  • Legal Development 05 November 2020 05 November 2020
  • UK & Europe

  • Insurance & Reinsurance

Deferred prosecution agreements - 9th DPA confirmed and revised guidance issued

On 22 October 2020, the Serious Fraud Office ("SFO") announced that it had reached a Deferred Prosecution Agreement ("DPA") with Airline Services Limited ("ASL"), for which it received final approval by the court on 30 October 2020 (see here for the press release and here for the final judgment, DPA and statement of facts). This is the ninth DPA reached by the SFO to date.

As part of the DPA, ASL accepted three offences of failure to prevent bribery, contrary to section 7 of the Bribery Act 2010, by failing to implement adequate procedures which allowed one of its agents to abuse the tender process, by using commercially sensitive information, to corruptly win contracts for ASL to refit commercial airliners. The DPA requires ASL to pay £2,979,685.76, consisting of a financial penalty of £1,238,714.31, disgorgement of profits representing the gain of the criminal conduct of £990,971.45, and a contribution to the SFO’s costs of £750,000. The company is also obliged to fully cooperate with the SFO and any other domestic or foreign law enforcement agency. The effect of the DPA is that proceedings against ASL are suspended and the organisation has undertaken to meet certain strict conditions.

Penalties and Discounts

As DPAs are discretionary tools for prosecutors, potentially allowing a culpable company to avoid a criminal conviction, the SFO has made it very clear through a number of the DPAs entered into since their introduction into the UK, just over six years ago, that cooperation is a key factor to obtaining a DPA, and achieving a significant discount in terms of the financial penalty.

Here, ASL was, again, granted a 50% discount to its penalty. Whilst Mrs Justice May noted that the maximum discount following a guilty plea is usually one third, she cited the reasons given by Leveson LJ in relation to the Sarclad DPA, and found that, in DPA cases, "50% could be appropriate not least to encourage others how to conduct themselves when confronting criminality…"

Indeed, in relation to ASL, Lisa Osofsky, Director of the SFO, said “It is to the credit of this now-dormant company that it voluntarily disclosed this conduct to the SFO and will remain in existence to fulfil the terms of the DPA.” The announcement also specifies that ASL cooperated throughout the SFO’s investigation and provided a limited waiver of privilege. The importance of a company cooperating in this process, and at an early stage, has also recently been re-emphasised in the revised section of the SFO Operational Handbook on Deferred Prosecution Agreements, which was published on 23 October 2020. The SFO has commented in the past that there should be no expectation of a DPA if “by the time we come knocking, we already have a good idea of what has happened”.

Cooperation includes early self-reporting, providing a limited waiver of privilege, taking remedial action (for example, by compensating victims), identifying witnesses, providing reports in relation to any internal investigations and preserving evidence.

The revised guidance also notes that, pursuant to the sentencing guidelines applicable to the types of conduct for which DPAs are potentially available, the overall effect of a DPA upon a company, including the financial terms “should be considered in all cases but will be particularly relevant where the Company is able to demonstrate substantial financial hardship. Whether the imposition of financial terms has the effect of putting the Company out of business will be relevant.”

This may be particularly relevant to companies seeking to negotiate a DPA in the current distressed economic conditions, caused by the COVID-19 pandemic, where the viability of many businesses remain under threat.

The SFO's revised guidance also raises a number of further important issues, re-emphasising parts of the previous Handbook and enhancing existing factors, reflecting the SFO's experience in negotiating DPAs. We discuss these below.

Invitation to enter into negotiations

Perhaps as a result of the SFO securing parent company guarantees in relation to undertakings obtained in recent DPAs (such as G4S and Serco Geografix), the revised guidance states that consideration should be given to the most appropriate addressee of the letter of invitation, especially where the Company is a subsidiary of a larger corporate, noting that "In some instances further factors may need to be taken into account. For example, where the parent company has been the contact with the SFO, it may be considered appropriate to address the letter of invitation to the parent even if it is anticipated that the terms of any DPA would be limited to its subsidiaries. Similar considerations may apply where it is likely the parent company may be required to enter into undertakings in connection with any DPA."

Statement of facts and anonymity of third parties

The guidance recognises that when a DPA is reached with a company, the company does not need to have formally admitted guilt. However, the company must admit the contents and meaning of key documents referred to in the statement of facts, which the guidance confirms would be admissible in criminal proceedings against the company and any subsequent proceedings against individuals. Directors, and by extension their D&O insurers, are thereby exposed.

However, whilst this is not new information, the guidance goes on to suggest that the SFO may move away from identifying third parties in the statement of facts (who are not permitted to participate in the DPA negotiation process), particularly where publication may pose a risk of prejudice to the administration of justice in linked proceedings against individuals. Reporting restrictions may also be appropriate. The guidance also acknowledges that due consideration must be given to the Data Protection Act 2018 and the European Convention on Human Rights when considering whether to identify third parties. This move follows criticism of the SFO in naming individuals before they have been tried for any alleged crimes and, in particular, where those individuals have later been acquitted of all charges, as was the case with the Tesco executives. It will, therefore, provide some comfort to directors and other individuals involved in the process and potentially lessen reputational damage in advance of any guilty verdict.


The guidance recognises that the Criminal Procedure and Investigations Act 1996 does not apply in DPA negotiations. Instead, the SFO is obliged, under the DPA code, to disclose to the company sufficient information to enable them to play an informed part in the negotiations. The guidance states: "The purpose of such disclosure is to ensure that negotiations are fair and the Company is not misled as to the strength of the prosecution case." However, the SFO is not expected to disclose material the company should already have, but rather information that may be inaccessible to the company, for example information from an overseas authority.

Reflecting the outcome in Omers Administration Corporation & Ors v Tesco plc [2019] EWHC 109 (Ch), where the defendant in those civil proceedings was ordered to disclose documents given to it by the SFO which the SFO had obtained during a criminal investigation pursuant to its powers under the Criminal Justice Act 1987 s.2, the revised guidance states "Where the Company is or may become a party to civil proceedings, it may have disclosure obligations towards other civil parties under the Civil Procedure Rules Part 31. A civil judge will need to balance any objections to the onward disclosure of material provided for the purpose of DPA negotiations against the ordinary rules on disclosure in such cases."

Parallel Investigations

International cooperation between regulators and prosecutors has been increasing in recent years and the risk that a company and its D&Os may face multi-jurisdictional parallel investigations/prosecutions is very real. In January 2020, the SFO entered into a record-breaking DPA with the global aerospace company Airbus SE, which agreed to pay a fine and costs amounting to €991m, here in the UK and, in total, €3.6bn, as part the world’s largest global resolution for bribery, involving authorities in the UK, France and the United States. The importance of such cooperation between agencies was emphasised by Ms Osofsky's statement when publishing the SFO's Annual Report and Accounts 2019-2020: "Co-operation with other criminal justice agencies is essential for the SFO as nearly all of our cases involve working with partners—both domestic and international; we have dedicated significant resources to solidifying these relationships at operational and strategic levels. The resolution in the Airbus case demonstrates our ability to cement strong international ties and unified co-operation. Even in cases that do not deliver record-breaking results, we prioritise strengthening our partnerships and exploring opportunities to tackle transnational economic crime in a coordinated and collaborative way."

Reflecting this experience, the guidance equips SFO staff with relevant legal and practical considerations where a DPA is under consideration and there are parallel investigations by overseas or other UK agencies. Considerations include: early communication and de-confliction in respect of investigative activity and ensuring the terms of negotiations allow for communication and sharing of information, all of which may affect the admissibility of evidence in different jurisdictions. Also, whether the company has taken a consistent position on the admission of facts and liability in respective jurisdictions; and co-ordination of court listing dates to ensure that resolutions can be approved simultaneously where possible.


Whilst the revised guidance is not substantially different from its previous incarnation, the points included to reflect the experience that the SFO has gained in negotiating and concluding DPAs is useful to increasing transparency around the process and providing some welcome clarification. This should assist those who may find themselves subject to the process and those advising them. The recognition that the statement of facts may need to be anonymised in certain situations is also welcome and addresses concerns about individuals being exposed to reputational harm, especially when they are not ultimately convicted of any crime.

The evolution of the DPA process continues.


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