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Rolls-Royce case: Justice for sale or fair settlement?

 

Rolls-Royce has become the third company in the UK to enter into a Deferred Prosecution Agreement (DPA) deal with the Serious Fraud Office (SFO). A £671 million deal was agreed jointly with the SFO and the authorities in Brazil and the USA, following allegations of conspiracy to corrupt or failure to prevent bribery by Rolls-Royce in ten countries including China, India, Indonesia and Thailand.

It is the most significant of the three DPA cases and a landmark decision for the SFO, both in terms of the size of the fine and the size of the company. But it has raised several important questions for those campaigning against corruption. Do DPAs allow corrupt companies to  “buy” their way out of prosecution? Are some companies simply too big to be prosecuted? When is it appropriate to use a DPA? These are just some of the complexities of this case. Below, Transparency International UK attempts to answer some of the difficult questions and understand what this case really means for the future of bringing the corrupt to justice!

What is a Deferred Prosecution Agreement?

A Deferred Prosecution Agreement (DPA) is a settlement that is reached between a prosecutor and a corporate body, in which an amnesty from prosecution is agreed in exchange for certain requirements. These requirements can include a financial penalty, assurances of changes in conduct and cooperation with law enforcement amongst other conditions.

A DPA means the party accused of wrong-doing will not face criminal prosecution – but this does not prevent individuals who have broken the law from facing individual prosecution.

Why would prosecutors ever agree to a DPA rather than a conviction?

Some may argue that DPA’s allow companies to avoid prosecution through paying large sums of money, and that there are no instances when such a deal could justifiably reached. However DPA’s are put forward as a tool for enforcement that can encourage cooperation of a company, as well as changed behaviour. They can also avoid lengthy and costly trials. The SFO states that DPA’s:

  • They enable a corporate body to make full reparation for criminal behaviour without the collateral damage of a conviction (for example sanctions or reputational damage that could put the company out of business and destroy the jobs and investments of innocent people).
  • They are concluded under the supervision of a judge, who must be convinced that the DPA is ‘in the interests of justice’ and that the terms are ‘fair, reasonable and proportionate’
  • They avoid lengthy and costly trials
  • They are transparent, public events

What are the repercussions of a DPA?

A company entering into a DPA, may be forced to pay a fine and/ or prove a change in their behaviour/ culture to avoid future criminality. A key aspect of a DPA is that due to the absence of a conviction, a company will not face mandatory debarment (excluded from government/public contracting) in the UK and EU. This can be a huge incentive for a company to enter into a DPA. There may be a monitoring process following the agreement to ensure that the alleged crimes are not committed again.

As is plainly obvious DPA’s are a complicated process, with multiple angles. Below the TI-UK team share their thoughts in a series of blog posts on this historic deal.

Robert Barrington, Executive Director, asks what we can learn about the future of DPA’s from the Rolls-Royce case?

Click Here to Read

Katherine Dixon, Director Defence and Security Programme, considers whether some defence companies are too important to be prosecuted

Click Here to Read

 

Eva Anderson, our Senior Legal Officer and Barrister discusses issues around debarment

Click Here to Read

 

Andy Watson, Head of Industry Integrity, asks who are the real victims in a big corruption case like this?

Click Here to Read

Sue Hawley is an anti bribery expert with Corruption Watch, here she raises questions over whether the DPA actually showed teeth

Click Here to Read

Peter Van Veen, Director Business Integrity Programme, looks at what lessons can be learned by companies

Click Here to Read

 

 

Further Reading:

 

 

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/Mark Hillary cropped by TI-UK shared under CC licence 2.0 (front page slider)
/antonino tumminia cropped by TI-UK shared under CC licence 2.0
/Pedro Ribeiro Simões cropped by TI-UK shared under CC licence 2.0
/Les Chatfield cropped by TI-UK shared under CC BY 2.0
/Kurush Pawar cropped by TI-UK shared under CC licence 2.0

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