Legislation to encourage lighter sanctions for corporate fraud

This entry was posted on Monday, December 12th, 2011 at 10:18 am

The Serious Fraud Office (SFO) has backed MPs’ proposals to adopt a US-style plea bargaining system for businesses accused of fraud in the UK, with the aim of decreasing criminal sanctions for offenders and streamlining the SFO’s operations.

The Telegraph reported earlier this month that MPs are now seriously considering enacting changes to the current legislation, which would allow the SFO to work together with a company accused of serious fraud under a “deferred prosecution agreement” (DPA) before any charges of corporate fraud are taken to court. A Parliamentary spokesman said, “in cases of financial crimes…the SFO and company involved could take a proposed resolution to a judge before the criminal process is engaged by a formal charge”.

The proposal comes after a damning report in which the SFO was accused of serious failings in its handling of a settlement with BAE Systems earlier this year. An SFO spokesman highlighted the fact that these changes to the law “could reduce the need for lengthy fraud investigations and encourage businesses to self-report”, thus lowering the prospect of serious criminal sanctions and reducing the overall cost of corporate fraud investigations to the taxpayer.

Sam Jaffa, a senior spokesman for the SFO, has attempted to appease those who fear that deals will take place behind closed doors without public scrutiny by insisting that the whole process will be overseen by a judge, who may reject the deal. He also suggested that the treasury could greatly benefit from the move, pointing to the $2billion raised in the US through DPA’s.

If you have been accused of serious fraud, we can help. David Phillips & Partners have over 25 years of experience and specialise in providing expert defence in fraud cases of all types, including tax fraud, VAT fraud and white collar fraud.