In the U.S., it’s long been common practice for companies to divulge their employees’ sins to prosecutors in exchange for leniency for themselves. Now it looks like voluntary disclosure may soon become routine in the U.K. as well. The Times of London reports that the Serious Fraud Office has confirmed for the first time that it “plans to move towards a U.S.-style system where businesses can self-report and then negotiate a settlement.” [Hat tip to Securities Docket.]
“Essentially, the new system offers cooperating companies agreed, and presumably lower, civil remedies in preference to criminal sanctions,” Freshfields Bruckhaus Deringer partner Paul Lomas told the Times.
Although the principles are in place, it’s still unclear how the program will work in practice. For example, if a company self-reports, it may not necessarily escape criminal sanctions. “You could get to a situation where a company self-reports and the SFO decides a criminal prosecution is warranted and uses the information it has just been given to help build its case,” Tom Stocker of McGrigors told the Times.
But Lomas told the Times that British regulators will have incentive to make good on promises. “They will want the process to be credible to companies and their advisers and for it to become trusted,” he said. “No doubt they will clarify, and possibly harden, the approach in the light of experience, but that is likely to be progressive and publicized in due course.”
This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.