After having been criticised for dragging its feet in the fight against corruption, France has updated its legislation through the enactment, on 9 December 2016, of the Sapin II law which now meets the same standards as the US FCPA and UK Bribery Act. The enactment of this law may impact D&O and civil liability insurers, as explained further below.
One of the new measures introduced by the law is an innovative settlement scheme – convention judiciaire d’intérêt public – inspired by the US and the UK Deferred Prosecution Agreement. This is brand new in the French legal system.
Such a settlement may be proposed to companies during the course of, or before, entering into criminal proceedings related to bribery, money laundering or influence peddling cases. If accepted, the settlement imposes a financial penalty of up to 30% of their average annual revenue as well as damages to identified victims. Companies may also be required to implement a compliance programme for a maximum of three years at their own cost and under the control of the French Anti-corruption Agency.
This innovation leads to an admission of fact by companies which may impact civil liability insurers as well as D&O insurers since directors and officers are not strictly parties to the settlement and may therefore still be exposed to criminal prosecution.
By strengthening the French anti-corruption arsenal, the Sapin II law aims to limit the extraterritorial application of the US FCPA to French companies. It may also change the landscape for D&O and civil liability insurers.