In a speech on 18 May 2016 Matthew Wagstaff, Joint Head of Bribery and Corruption at the Serious Fraud Office, spoke about what the Serious Fraud Office regards as proper cooperation. Michelle de Kluyver, Counsel at Allen & Overy LLP specialising in representing clients in multi-jurisdictional corruption investigations, considers what we can take from the speech, and highlights some of the tricky issues that remain concerning witness accounts and acceptance of wrongdoing.
Cooperation matters because a company that is seen to be genuinely and unequivocally cooperating stands a better chance of avoiding a criminal outcome to an investigation. The question of what is and what is not cooperation has, according to Matthew Wagstaff, “caused much confusion” since the first section 7 Bribery Act conviction (Sweett Group) and DPA last year.
Cooperation is not…
The SFO does not expect a company to waive a genuine claim to privilege. But, it does definitely expect to see first witness accounts. The SFO regards these as “factual narrative” and not privileged.
Cooperation is…
As well as providing notes of witness interviews, the SFO also expects corporates to:
• help to uncover the full extent of wrongdoing – including telling the SFO about something it does not already know. The company telling the SFO about something it already knows from a whistleblower, disgruntled competitor or nosey journalist is not going to count towards cooperation credit.
• accept that wrongdoing has occurred.
• provide the SFO with its independent investigation report. Any DPA needs to be approved by a judge who will want to know that the SFO has checked the company’s version of events and that the investigation has uncovered the full extent of criminality.
• not trample on the crime scene. Examples given included not tipping off “data custodians” who may be potential suspects, and providing access to witness accounts – these are of “crucial importance”.
Witness accounts
There has long been controversy around first witness accounts. Many practitioners regard them as privileged, yet the SFO disagrees, and expects them to be disclosed. In the Standard Bank investigation (which lead to the first DPA) the Bank provided oral summaries of evidence from key individuals.
The DPA Code of Practice states that in order to be offered a DPA there must be full cooperation, including providing copies of witness accounts. Some have interpreted this as an expectation that privilege will be waived, but as Wagstaff’s speech confirms, the SFO does not regard these notes as privileged anyway.
What about the SFO’s concern about corporates “trampling on the crime scene”? It’s a catchy phrase but the SFO has developed little guidance on what amounts to “trampling” and how the SFO’s expectations about what a company may and may not do when faced with allegations of wrongdoing interface with a company’s obligations relating to good corporate governance. Companies must surely be allowed to investigate promptly allegations of wrongdoing by their management or employees and provided this is done responsibly it should not “trample” on the evidence. It typically takes the SFO many years to complete an investigation.
Accepting wrong-doing – a balancing act
The speech made clear that in order to count towards cooperation, a company must accept in any self-report that there has been some wrongdoing. This may be advisable to do in a clear-cut case where there is obvious evidence of criminal liability at an early stage. Where the evidence is not yet sufficient but a company still chooses to self-report and cooperate with the SFO, it is unclear why that self-report should not count towards cooperation credit.
Matthew Wagstaff’s speech may make the SFO’s position clear but the reasons why the SFO has adopted certain positions still lack clarity.
There is no one size fits all in internal investigations. The differing expectations of national agencies and those based in other jurisdictions means that companies, and their lawyers, must take a tailored approach to each investigation.
