IS THE UK HEADING TOWARDS THE US MODEL FOR LARGE CORPORATE CRIMINAL FINES?

The pace of change in the field of business crime shows no sign of abating. We have previously written about the introduction into UK law of the concept of deferred prosecution agreements (DPAs). Readers familiar with the US system of corporate criminal justice will be aware of the large fines that typically accompany a DPA. Such fines are premised on the US Federal Sentencing Guidelines. In contrast, the UK criminal law had little precedent or coherent practice for arriving at the level of corporate criminal fines. With the introduction of revised tests for corporate accountability in the field of bribery and incentives for corporate cooperation through DPAs, the case for coherent and predictable sentencing approach was clear.

 The proposed UK approach

The UK Sentencing Council (the ‘Council’) ran a consultation between June 2013 and October 2013 on draft guidelines relating to financial crime offences. The guidelines draw inspiration from the approach to corporate fines adopted in the US and offer increased certainty to corporations faced with a potential prosecution.

Whilst the guidelines cover a wide range of fraud, money laundering and bribery offences, this article focuses on those aspects that relate to the UK Bribery Act 2010 (UKBA) in the context of corporate offenders.

Preparing the guidelines required competing objectives of certainty and flexibility to be balanced. Certainty is particularly important to organisations when assessing potential exposure to prosecution, but the Council has maintained a degree of flexibility to allow for the fact that offenders could range from large multinationals to small and medium sized businesses.

Jan-Mar 2014 issue

Kirkland & Ellis International LLP