The SFO has published its long-awaited Corporate Co-operation Guidance which sets out what companies should and should not do to assist the SFO in its investigations. The Guidance defines co-operation as providing assistance to the SFO that goes above and beyond what the law requires. If such co-operation is provided, this will tend against prosecution and may help the a company secure a deferred prosecution agreement (although the Guidance makes clear that even full, robust co-operation does not guarantee any particular outcome).
In its general list of 'dos' to be co-operative, the Guidance states that companies should:
- identify suspected wrong-doing and criminal conduct together with the people responsible;
- report the suspected wrong-doing within a reasonable time of the suspicions coming to light; and
- preserve the available evidence and provide it promptly in an evidentially sound format.
In terms of 'don'ts' the Guidance states that companies should not:
- protect specific individuals or unjustifiably blame others;
- put subjects on notice and create a danger of tampering with evidence or testimony;
- be silent about selected issues; or
- delay reporting for tactical reasons.
The Guidance is welcome in that it provides sensible practices which corporate bodies should abide by in order to satisfy the SFO. However, there are several areas which remain unclear and may prove problematic.
First, the Guidance makes no mention of data protection issues, which can often be interlinked with a criminal investigation. Secondly, the requirement that a corporate should report wrong-doing within a reasonable time of suspicions coming to light is at slightly odds with the requirement to identify suspected wrong-doing and those persons responsible. In order to meet the requirement of the latter, a company will likely need to carry out an internal investigation. The practical reality of such investigations is that it may take a significant amount of time before it can be determined whether or not such suspicions of wrong-doing are genuine. There is no guidance as to how in-depth an internal investigation ought to be.
Thirdly, and potentially of most concern to corporate organisations, is the statement in the Guidance that an organisation that does not waive privilege and provide witness accounts will not attain the corresponding factor against prosecution. If an organisation claims privilege over witness accounts and interview transcripts, it will need independent counsel to certify that the relevant material is indeed privileged.
This places an additional burden (and expense) upon companies seeking to rely on privilege in relation to the product of its internal investigation. In the past, independent counsel has been appointed by the SFO to determine questions of privilege.
By requiring a company to justify its own assertion of privilege, this approach in the Guidance appears to chime with the SFO's current attitude to the assertion of legal privilege as something that a company may use to shield itself from airing its wrongdoing (something on which we have written in an earlier article).
The correct interpretation of legal professional privilege is that of a fundamental legal protection that allows clients to bare everything to their lawyers and be totally candid, safe in the knowledge that they are protected in so doing.
Although the Guidance states that if an organisation does not waive privilege it will not be penalised by the SFO, the tone of the Guidance and past statements by the SFO (including in the recent Court of Appeal case of ENRC v SFO) nevertheless indicate that the assertion of privilege may count as a black mark against a company when it comes to the SFO's assessment of co-operation.
Privilege is not part of the point-scoring game – it is a necessary legal protection that needs to be respected – the Courts respect it, and prosecuting bodies need to be very wary of encroaching on it. Attempts to encourage organisations to waive privilege could have a counter-effect of making it more difficult for companies to conduct their internal investigations.