While England and Wales marks the first approved settlement under a DPA for an offence under section 7 of the Bribery Act 2010, Scotland today lacks any such self-reporting mechanism.
When, in September 2015, Scotland gave the UK its first civil settlement with respect to an offence under s.7 by Brand-Rex Limited it did so under a Crown Office and Procurator Fiscal Service self-reporting initiative that has since lapsed.
Brand-Rex, a Scottish company with 300 employees which offers industry cabling solutions, had operated an incentive scheme offering holiday and travel vouchers for its installers and distributors. Unfortunately, one of their independent installers then offered these vouchers to one of his customer's employees: a person with influence over purchasing decisions. Utilising the self-reporting scheme then in place, Brand-Rex reached an agreement with Crown Office (Scotland's prosecuting authority) which lead to a civil recovery order being granted in the sum of £212,800, this being the sum identified as their gross profit from the breach of the Act. Crown Office approved this alternative to prosecution after Brand-Rex, having ordered an investigation by external lawyers and forensic accountants, reported the incident. Standing their lack of previous misconduct and the isolated nature of the offence, a prosecution was deemed inappropriate.
This self-reporting initiative, similar to that in place in England & Wales before the introduction of DPAs in 2014, expired on 30 June 2015. Whilst it encouraged self reporting by Brand-Rex Limited and others, this has not led Crown Office to further extend the policy - originally introduced in 2011. In the meantime, there is a straightforward presumption in favour of prosecution for all bribery offences.
It is presumed that Crown Office will move soon to introduce something akin to the DPA process and will be following the reports of the Standard Bank DPA with interest; but it has unaccountably left a hiatus in which there is no self-reporting mechanism for corporates faced with conduct occurring, or predominantly occurring, in Scotland. (Any such conduct will be referred automatically to Crown Office. Corporates headquartered in Scotland may find conduct elsewhere in the UK referred to Crown Office by the SFO).
For corporates, there are clear advantages to being able to self-refer under this type of mechanism. For Crown Office - under significant financial pressures - self referral following an investigation undertaken at the expense of the corporate concerned is desirable, as is the ability to boast that they are promoting good corporate governance and transparency. Crown Office's civil recovery unit, which regularly faces criticism for the low amount it collects from the proceeds of crime, might see a regular income from civil settlements. We can therefore expect this hiatus to be addressed.
In the meantime, corporates headquartered or operating in Scotland should bear in mind that self-reporting to Crown Office will only result in a criminal conviction. Any advice given to senior management teams dealing with a potential offence under the Act must acknowledge this.