Serious Fraud Office (SFO) policy for dealing with corporate corruption may have to be revised following Innospec.
2009 guidance issued by the SFO offered corrupt companies the incentive of civil rather than criminal sanctions if they self-reported. If a prosecution was necessary, the SFO could confine it to a limited part of the alleged crime.
This “carrot not stick” approach to corruption is used by the US authorities.
However, this policy has been rejected, in the judgment of Lord Justice Thomas in R v Innospec Ltd [2010] EW Misc 7. He held that it would “rarely be appropriate for criminal conduct by a company to be dealt with by means of a civil recovery order”. Criminal law solicitor, David Corker, writing in NLJ this week, says: “The judgment is a profound rejection of this SFO policy and of its ambitions to become a US-style prosecutor.”
Corker says: “It is implicit in Thomas LJ’s judgment that he regarded the SFO’s policy as an attempt to usurp the role of the court and that such an attempt needed to be repulsed in trenchant terms.
“Any ambition which the SFO director had of projecting the SFO into a Department of Justice equivalent doing deals across the spectrum of serious fraud offences with companies and determining where the public interest lies is now in the realm of fantasy” (see Law in the headlines, p 783).
