SFO Guidance on Corporate Co-operation

The SFO has published an amendment to its Operational Handbook on Corporate Cooperation. It states that cooperation is relevant to charging decisions and also to the appropriateness of a DPA against a corporate. According to the Guidance,

“cooperation means providing assistance to the SFO that goes above and beyond what the law requires”. Generally, this is said to include identifying suspected wrongdoing and criminal conduct at whatever level of the organisation and reporting it to the SFO in a timely manner whilst preserving the integrity of the evidence. Various examples, neither prescriptive nor exclusive, are given. Practical steps are set out, such as the preservation of digital and hard copy relevant material and their audit trails or assistance with industry-specific knowledge and practices.

The Guidance states that cooperation is “inconsistent with” protecting individuals, putting them on notice or creating a danger of tampering with evidence or testimony and, importantly, “silence about selected issues”.

Waiving LPP in the context of witness accounts is specifically addressed. As the Guidance acknowledges “the House of Lords held that the importance of legal privilege outweighs a defendant’s request for prior witness statements”.[1]

Amongst fraud lawyers, it has been a vexed question whether the SFO attitude to the waiver of LPP is necessary to demonstrate cooperation that might invoke the DPA route for a corporate. This latest guidance does not make matters much clearer: “an organisation that does not waive privilege and provide witness accounts does not attain the corresponding factor against prosecution that is found in the DPA code but will not be penalised by the SFO”. What “but will not be penalised” means is opaque in practical terms.

Any corporate claiming LPP must, of course, properly establish its claim and is at risk of challenge by the SFO but the SFO now states it “will be expected to provide certification by independent counsel that the material in question is privileged”. Does this added layer of assurance and expense indicate a lack of faith in the bona fides of lawyers acting for corporates which either voluntarily self-report or are caught in an investigation and are seeking to assist the SFO in its function as an investigator and prosecutor? Is it simply meant to make it more onerous for those with proper claims to LPP? Or is it to enable the SFO to rely on the certificate in a case (perhaps against an individual) when it is not in a position to disclose an earlier account by a witness because it is the subject of LPP? Whichever it is, despite the judgement in SFO v ENRC[2] the noose is tightening around LPP in serious fraud cases being investigated and prosecuted in England and Wales.

[1] Footnote 2 citing R v Derby Magistrates Court ex p B [1996] 1 SC 487

[2] [2018] EWCA Civ 2006

Amanda Pinto QC
33 Chancery Lane

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