International bribery and corruption

Two cases have come before the UK courts recently involving international trading (exports from the UK) and corrupt practices involving bribes to officials overseas.

These cases pre-date the Bribery Act 2010.  The cases are R v Innospec Ltd and R v Robert Dougall.

There is some discussion of them (and a number of other matters) in my latest Newsletter here.

David

Comments
stepurhan's picture

Power of the court

stepurhan | | Permalink

In the Innospec case, is the court really forced to accept the agreement? If so that just seems to be a ridiculous position. I note that you said the deal needed the "approval of the courts though. What would have happened if they withheld that approval?

I was quite surprised to receive an e-mail containing the sentence "International bribery and corruption by davidwinch". With you being such an honest and upright chap normally that would definitely be headline news.

davidwinch's picture

The legal position - and the practical reality

davidwinch | | Permalink

Stephen

Legally and constitutionally the Court could have ignored the suggested settlement in the Innospec case and fined the company "tens of millions" in its unfettered discretion.

Practically that would have put the company out of business and (perhaps more importantly) trashed months / years of detailed negotiations between the US law enforcement agencies, the SFO and the company.

The deal was structured to allow the company to continue in business whilst requiring ongoing independent monitoring of its affairs for a period of years (probably by one of the major accountancy firms - not its auditors).

The judge hearing the case in Southwark Crown Court that day just happened to be (yeah, right!) Lord Justice Thomas who normally sits in the Court of Appeal and is the Deputy Head of Criminal Justice (i.e. Deputy to the Lord Chief Justice).

So his comment along the lines of "OK this once, but don't try this trick again!" was no doubt meant to be taken seriously by the SFO.

Although in fact the SFO did get away with it a second time in the case of R v Robert Dougall (also mentioned in the newsletter).  But again the SFO got a ticking off - this time from the Lord Chief Justice himself.

Hopefully the message has been heard by the SFO and they will be careful to stick strictly to the guidelines in future!

David

stepurhan's picture

A political decision?

stepurhan | | Permalink

I understand the reasoning you give but it seems to make the decision to accept a political one, not a judicial one.

I, perhaps naively, have little sympathy for the thought that the company could be put out of business. I feel I could live without a company that thinks using chemicals harmful to its employees and others and then bribing to cover up doing that is OK. The company may have a more significant place in the economy than I am aware of though (in a similar way to it being unacceptable to let any of the banks collapse)

What concerns me more is the thought the main reason for the decision was to keep the US authorities happy. If the UK courts had thrown out the agreement then presumably it is thought that the US authorities would be less likely to co-operate in future investigations. The agreement was accepted therefore to keep the US authorities happy. It worries me that the courts may be making decisions to please foreign bodies rather than for reasons of justice. I wish I had the naivety to not think such things happen more often than we know.

Is there any provision for doing things the other way around? Could a court make a decision and give direction to settlement negotiations (e.g. set minimum limits to fines, apply other conditions) The main problem I see with this is, if the judgement was made available, then the company would always negotiate for the minimum the court would allow but is there any way around that?

davidwinch's picture

Guidelines

davidwinch | | Permalink

Stephen

There is an existing Guideline setting out how 'deals' should be done.

It includes the following:

"It will then be for the court to decide how to deal with the plea agreement. In particular, the court retains an absolute discretion as to whether or not it sentences in accordance with the joint submission from the parties."

There is a difference however between a joint (i.e. prosecution and defence) submission "as to the applicable sentencing range" and what amounts to a fait accompli presented to the Court as to what has been 'agreed'.

Hence the judges' comments in these cases.

David

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