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Case and Comment
SIR Brian Leveson's approval of the third deferred prosecution agreement (DPA) in Serious Fraud Office v Rolls-Royce plc [2017] Lloyd's Rep. F.C. 249 is the most significant addition to the growing canon of case law on DPAs. This new enforcement tool was added to the UK prosecutors' armoury by the Crime and Courts Act 2013. Following the successful use of deferrals to tackle corporate crime in the US, the Act allows an organisation to avoid prosecution for certain corporate crimes by entering into an agreement with a designated prosecutor, under court supervision, whereby prosecution is deferred pending successful compliance with certain conditions, which may include payment of a substantial fine.
Rolls-Royce, the UK engineering giant, made corrupt payments to local agents to secure contracts across seven countries, over three decades and in three of its business streams. In Indonesia and Thailand, it paid cash bribes and gave a luxury Rolls-Royce car to intermediaries, to secure contracts for the provision of aircraft engines to Garuda Indonesia and Thai Airways. To facilitate its defence business in India, Rolls-Royce used sham contracts and falsely recorded the bribes to local agents as legitimate consultancy fees. In order to secure aircraft engine orders from China Eastern Airlines, Rolls-Royce offered cash credit to the airlines' employees, who used the funds to pay for a Master of Business Administration course at Columbia University, four-star accommodation and lavish activities.
The conduct of Rolls-Royce was described by Sir Brian Leveson P. as the "most serious" breach of criminal law in bribery and corruption (at [4]); it covered 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery. It was unlike the conduct that gave rise to the first DPA in Serious Fraud Office v Standard Bank plc [2016] Lloyd's Rep. F.C. 102, which concerned a single failure to prevent bribery by a sister company, where the Bank was not complicit in the corruption. It was also unlike the conduct that gave rise to the second DPA in Serious Fraud Office v XYZ [2016] Lloyd's Rep. F.C. 509, which involved a six-year course of systematic bribery...