Rolls Royce PLC and Barclays PLC – The Lessons ….
The Serious Fraud Office (“SFO”) has today charged Barclays PLC and four individuals with conspiracy to commit fraud and the provision of unlawful financial assistance. This course of action is in stark contrast to the Deferred Prosecution Agreement (“DPA”) which was entered into by the SFO and Rolls Royce PLC (“RR”) and approved by Sir Brian Leveson, President of the Queen’s Bench Division on 17 January 2017. The contrasting fates of both organisations raises interesting debate on when a company should be prosecuted.
The Rolls Royce Case
RR did not start well as they did not self-report any suspected wrongdoing to the SFO. The SFO take self-reporting into account when determining if a prosecution should be brought. However, when RR did engage with the SFO the engagement was clearly considerable. In fact, RR gave a lot more than the SFO would have arguably had from a unilateral investigation. It was this behaviour that took RR over the DPA line. The SFO said Rolls Royce “cooperated fully and extensively with the SFO’s investigation, in particular voluntarily providing the documents and materials…as well as assisting in arranging interviews with employees.” This led to the SFO obtaining over 30 million documents. RR proactively engaged and therefore were treated as if they had self-reported. The SFO has made it clear that self-reporting and cooperation is key when considering a DPA. Many consider that the DPA entered into with RR is fact specific and exceptional.
The Barclays Case
The decision to prosecute Barclays is a clear signal that the SFO will prosecute a company, even one of the size and stature of Barclays, if it takes the view that there is enough evidence to provide a realistic prospect of conviction and it is in the public interest to do so. There are some schools of thought that view a prosecution of Barclays as political muscle flexing due to the proposed abolishment of the SFO and public calls for banks and individuals to be held accountable. If there was any lack of cooperation on behalf of Barclays (which could bring to the forefront the vexed question about legal privilege for some documents) then this could have played a part in whether they were offered a DPA. Clearly all of these issues will now be aired in public and will be subject to debate for the foreseeable future. It will ultimately be for a jury to decide if there was in fact any criminal wrongdoing on the part of Barclays or the individuals charged.
If found guilty Barclays would face an enormous fine and the maximum sentence for an individual is 10 years imprisonment.
It will be interesting to observe whether or not the cases bring about a sea-change in self-reporting and the way organisations subject to SFO investigations engage.