UK Deferred Prosecution Agreements

The SFO has agreed its first DPA in five years in relation to a failure by Ultra Electronics to prevent bribery in Oman and Algeria. The case provides a reminder of the importance of tailoring anti-bribery and corruption policies and procedures to the specific risks a company faces. In circumstances where the company had changed ownership after the relevant conduct took place, it highlights the impact of post-acquisition compliance overhaul and compliance uplift on DPA negotiations. It also provides further insight into the concept of “exemplary cooperation” in SFO investigations. 

On 5 December 2023, the High Court approved a deferred prosecution agreement (“DPA“) between the Crown Prosecution Service (“CPS“) and Entain plc (“Entain“) for Entain’s alleged failure to prevent bribery occurring in its legacy Turkish-facing business, contrary to section 7 of the UK Bribery Act 2010 (the “UKBA“). This is the first DPA entered into by the CPS, with the mechanism having previously only been deployed by the UK’s Serious Fraud Office (“SFO“). It is also the second largest DPA secured in the UK to date.

On 19 July 2021, the High Court approved two separate deferred prosecution agreements (the “DPAs”) between the UK Serious Fraud Office (“SFO”) and two UK-based companies (the “Companies”) for active participation in, and failure to prevent, bribery pursuant to sections 1 and 7 of the Bribery Act 2010 (read the SFO press release here). The DPAs relate to conduct which, according to the SFO, saw the Companies’ “rolling use” of bribes to obtain UK contracts valued in the millions of pounds. The two cases have a shared Statement of Facts, however, this document, along with the judgment approving the DPAs and the DPAs themselves, has not been released yet due to reporting restrictions.

In early March 2023, the Serious Fraud Office (the “SFO“) secured its first conviction of an individual in connection with conduct subject to a deferred prosecution agreement (“DPA“). Whilst undoubtedly a success for the SFO, the conviction is the only one of its type to date, despite the SFO having entered into 12 DPAs since the introduction of the DPA regime in 2014, and it arose from a guilty plea rather than the completion of a contested trial. As a result, it is not clear that this will be the beginning of a trend which will see more individuals convicted as a result of conduct which is also the subject of a DPA. Indeed, the week after the conviction, three former executives of G4S (a company which had also entered into a DPA) were acquitted after the SFO offered no evidence against them.

On 1 July 2021, coincidentally the tenth anniversary of the UK's Bribery Act coming into force, the UK's tenth deferred prosecution agreement ("DPA") was approved between the UK Serious Fraud Office ("SFO") and Amec Foster Wheeler Energy Limited ("AFWEL"), a UK-based global engineering company (read the SFO press release here). This concludes the SFO's four-year investigation of the legacy Foster Wheeler and Amec Foster Wheeler businesses. The DPA was previously agreed in principle at a private hearing held on 25 June 2021 before Lord Justice Edis, sitting at the Royal Courts of Justice (see details of the private hearing here)

In October 2020 the SFO published guidance regarding Deferred Prosecution Agreements (“DPAs”) in a new chapter of its Operational Handbook. The guidance offers a practical step-by-step map to the route that the SFO, and, therefore, a target company and its advisers, will traverse where seeking to negotiate an outcome that avoids the need for prosecution. The guidance largely covers the same ground as the SFO and CPS 2014 DPA Code of Practice. However, when read against the background of the nine DPAs that the SFO has now agreed, there are several key themes that companies interested in DPAs should take away.

On 30 October 2020, Mrs Justice May, sitting in the Crown Court in Southwark, approved the UK’s ninth deferred prosecution agreement (“DPA”) between the UK Serious Fraud Office (“SFO”) and Airline Services Limited (“ASL”) (read the SFO press release here). The investigation was only made public on 22 October 2020 after the SFO announced that a DPA was reached in principle at a private hearing held the previous day before Mrs Justice May.

On 17 July 2020, Mr Justice William Davis approved the UK’s eighth deferred prosecution agreement (“DPA”) between the UK Serious Fraud Office (“SFO”) and G4S Care and Justice Services (UK) Limited (“G4S C&J”), a whollyowned subsidiary of G4S plc (read the SFO press release here). G4S C&J has agreed to pay a financial penalty of £38.5m and the SFO’s full costs of £5.9m, which is in addition to the £121.3m compensation that G4S C&J paid to the Ministry of Justice (“MoJ”) as part of a civil settlement in 2014. 

On 31 January 2020, Dame Victoria Sharp, the President of the Queen’s Bench Division sitting in the Crown Court in Southwark, approved the Deferred Prosecution Agreement (“DPA”) between the UK Serious Fraud Office (“SFO”) and Airbus S.E. (“Airbus”), the ultimate parent company of the Airbus Group. Under the DPA, Airbus must pay €990,963,712 to the SFO — the largest UK DPA financial settlement to date and greater than the combined total of all previous financial settlements under UK DPAs.

On 20 December 2019 reporting restrictions were lifted in respect of a Deferred Prosecution Agreement (“DPA”) agreed between the Serious Fraud Office (“SFO”) and Guralp Systems Ltd (“GSL”). Under the DPA, which was approved in October 2019, GSL agreed to disgorge relevant profit of £2,069,861 in relation to charges of conspiracy to make corrupt payments and failure to prevent bribery by its employees, both in respect of South Korean business. Three GSL personnel, who were also charged with conspiracy to make corrupt payments, were subsequently acquitted in December. GSL also agreed to continue to cooperate with the SFO and to maintain and keep its (already enhanced) Anti-Bribery and Corruption (“ABC”) procedures under review.

Following the introduction of DPAs in the UK in 2014 and the conclusion of the first DPA with the SFO in November 2015, the GSL DPA is the sixth DPA and reiterates the importance placed by the SFO on the use of DPAs in tackling financial crime. In this briefing, we provide an overview of the GSL DPA.

On 4 July 2019, Mr Justice William Davis approved a Deferred Prosecution Agreement (“DPA“) agreed between the Serious Fraud Office (“SFO“) and Serco Geografix Ltd (“SGL“), a wholly-owned subsidiary of outsourcing company Serco Group plc (“Serco Group“). SGL has agreed to pay £22.9 million, comprising a financial penalty of £19.2m and the full amount of the SFO’s investigative costs of £3.7m. This is in addition to the £12.8m in compensation Serco paid to the Ministry of Justice as part of a £70m civil settlement in 2013.

Following the introduction of DPAs in the UK in 2014 and the conclusion of the first DPA with the SFO in November 2015, the Serco DPA is the fifth and latest in a growing body of DPA case-law and confirms the importance placed by the SFO on the use of DPAs in tackling financial crime.

In this briefing, we provide some background on DPAs generally, an overview of the Serco DPA and discuss some of the emerging themes relating to DPAs and the SFO’s approach to enforcement.

On 10 April 2017, the Rt. Hon. Sir Brian Leveson PC approved the UK’s fourth Deferred Prosecution Agreement (“DPA”), resulting in Tesco Stores Limited (“TSL”) agreeing to pay a financial penalty of £128,992,500 and £3,069,951 of investigation costs. The DPA had been embargoed from publication, pending the trial of three former Tesco executives on related charges of fraud and false accounting. Following each individual being acquitted of all charges, the DPA was published on 23 January 2018.

On 17 January 2017, Sir Brian Leveson QC approved the UK's third Deferred Prosecution Agreement ("DPA"), resulting in orders for disgorgement, penalties and costs exceeding £500 million. This is the largest DPA since their introduction in the UK in 2014. Herbert Smith Freehills' London Corporate Crime and Investigations team negotiated the first DPA with the Serious Fraud Office ("SFO"), which was concluded in November 2015.

This latest agreement confirms their status as an important tool for the SFO in tackling financial crime, at a time when the government is consulting on measures to increase the scope for companies to incur criminal liability (see our e-bulletins on Failure to Prevent Economic Crime and Failure to Prevent Facilitation of Tax Evasion).

In this briefing, we provide an overview of the Rolls-Royce DPA, and discuss some of the emerging themes from the growing body of DPA case-law indicating the importance of what the Judge described as Rolls-Royce's "extraordinary co-operation".

London’s Southwark Crown Court recently approved only the second Deferred Prosecution Agreement (DPA) since the introduction of DPAs in 2014. Herbert Smith Freehills' London Corporate Crime and Investigations team negotiated the first DPA with the SFO, which was concluded in November 2015. The recent announcement of the UK’s second DPA indicates that DPAs are likely to be an important tool in the SFO’s armoury as it pursues corporates alleged to have committed economic or financial crimes.