Mabey & Johnson Limited ("M&J"), an English company supplying bridging equipment, largely in the developing world, has been the subject of a landmark prosecution for overseas corruption by the UK's Serious Fraud Office ("SFO").

M&J has recently pleaded guilty to corruption offences in relation to payments made in connection with historic contracts won in Ghana and Jamaica and is due to be sentenced in September. The SFO has stated that the M&J prosecution represents the start of increased efforts by it to investigate and prosecute companies and individuals for acts of overseas corruption. The case is also the first to be resolved under new Plea Guidelines for cases of serious or complex fraud, as the UK switches to a system more akin to the US Criminal Justice System.

The M&J case is remarkable in that the company decided to co-operate with the SFO throughout its investigation (which commenced as a result of M&J reporting itself to the SFO). By adopting this approach M&J has been able to work proactively with the SFO to determine the nature and scope of the charges and its decision to co-operate has also led to this matter coming before the court much quicker than would otherwise have been the case. The SFO wishes to use the M&J case as an example of it taking a proportionate approach to companies who come forward at an early state and disclose issues to it. The SFO has recently published a guide setting out how it would intend to deal with corporates who self report and is actively seeking to encourage companies to come forward and disclose issues to it. The guide largely reflects our experience of dealing with the SFO on the M&J case. At present it is too early to tell how many companies will come forward and contact the SFO.

Since the UK signed up to the OECD Convention on Combating Bribery of Foreign Public Officials in 1999 commentators have criticised the SFO's failure to prosecute companies for overseas corruption. The SFO's decision, in the face of political pressure, to drop its investigation into BAE's conduct in relation to the $86 billion Al Yamanah arms deal has contributed to the perception, especially in the US, that the UK did not treat overseas corruption as a serious prosecution target. The SFO's failure to prosecute has been contrasted with the SEC and DoJ's appetite for pursuing companies for FCPA offences and their successful record in securing convictions and settlements.

In part the SFO's failure to pursue prosecutions can be explained by the rather complex status of English law in this area. However, the UK Government is taking steps to make the legal position clearer and during the next parliamentary session will seek to pass into law a new Bribery Bill to provide a more coherent and understandable framework in which prosecutions for overseas corruption can take place. If the Bribery Bill is enacted it will introduce corporate criminal liability if bribes are paid on a company's behalf even if the bribes are paid by junior employees without the knowledge of senior officers. Whilst the Bill is yet to be the subject of parliamentary debate, the company would commit an offence unless it can demonstrate that it had in place adequate anti-corruption systems and controls.

The SFO has recently hired a new Head of Anti-Corruption and has almost doubled the number of investigators involved on anti-corruption work. The M&J case is, therefore, likely to be just the first in a line of cases.