Yesterday, amid the dog days of August, the UK’s Serious Fraud Office (SFO) has seen fit to publish its much-anticipated Guidance on Corporate Co-operation. This is a detailed document which fits into a wider eco-system of the SFO Operational Handbook and other guidance material. Despite the time of the legal year, the Guidance will not escape a torrent of commentary and analysis, including from us.
Proper, in-depth analysis will take a little time. But we can't resist a few quick-takes on some of the more interesting points now. In no particular order, these are:
- The SFO begins with the valid point that what qualifies as "co-operation" in each case will turn on the specific facts. Quite right. Excitable commentary from lawyers and others on every new guideline, good-practice standard or similar sub-regulatory material can sometimes ignore this fundamental precept. Individual results may differ. It is refreshing to see the SFO state this early and clearly.
- The Guidance explains the broad scope of expected co-operation by corporate bodies, at some length. The principles include providing all relevant information in a timely way and not seeking to delay or mislead the SFO, including by omission of information. Most of this reflects good practice in this sphere and the sort of thing the US and other authorities have been saying for some time.
- There is a little more clarity in the SFO’s stance towards what remains a highly controversial issue, that of waiver of privilege over documents. For some time SFO officials have been hinting that waiver of privilege was a critical factor in determining co-operation. The Guidance is a little more subtle. Essentially it says that “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 [which describes potential co-operation as including providing witness accounts] but will not be penalised by the SFO”. This reads as somewhat softer than a requirement that privilege must be waived in every case. However, the SFO maintains its clear preference for privilege waivers and wishes to retain the right to insist on these. It is a question for another day whether or not this position is consistent with current law or whether being designated un-cooperative is really very different from being penalised. In practice, we can expect large companies to continue to consider waivers, in whole or in part, as part of the price of obtaining deferred prosecution agreements or other consensual resolutions.
- A last point on privilege, for now. The Guidance suggests that “During the investigation, if the organisation claims privilege, it will be expected to provide certification by independent counsel that the material in question is privileged”. This is a new stipulation. It is not obvious that it could actually be enforced - after all a document is privileged or it is not - and a claim for privilege does not require some sort of certification by a third party before it can be valid. Nevertheless, going back to the sphere of practice, references to independent lawyers on the issue of privilege may well become more common.
As mentioned, the Guidance will repay detailed study. It needs to be read in conjunction with the existing Guidance on Corporate Prosecutions and on Deferred Prosecution Agreements and indeed some of its more contentious positions should be analysed within a broader legal context.
But the broad thrust of the Guidance is useful to corporate bodies facing a potential investigation by the SFO or similar authorities. To repeat ourselves, it is not a rulebook but a (mostly) helpful statement of principles.