UK Law and Practice Contributed by: Ben Morgan, Ali Sallaway, Matthew Bruce and Emily Knight, Freshfields
2015, the SFO has since secured 11 additional DPAs; however, arguably more notably, the CPS followed suit and agreed its first DPA in 2023. The CMA may intervene where there are anti- competitive practices in a crisis situation. The agency clarified its approach to enforcement action in emergency situations following the pandemic to explain that it will balance business co-operation and the adverse impact caused to consumers when assessing whether actions taken to address an emergency were reason- able. It also clarified that co-ordination between businesses that is solely in response to the crisis may not result in enforcement action being tak- en, unless there is clear detriment to consumers. Enforcement agencies are increasingly working together to tackle incidents such as cybersecurity breaches and economic crime, which has resulted in memoranda of understandings between differ- ent public bodies. These collaboration exercises have resulted in information-sharing arrange- ments, which may lead to further knock-on inves- tigations by other domestic or international agen- cies that have an interest in the incident. 5.3 Co-Operating With Enforcement Authorities Enforcement authorities are paying increas- ing attention to whether companies are self- reporting wrongdoing voluntarily and in a timely manner. It is also increasingly important for companies to co-operate when subject to an investigation and/or enforcement action. In many cases, the traditional adversarial nature of enforcement action is being replaced with one of co-operation, to reach a mutually acceptable compromise for both sides. The US has led in delineating clear standards on how companies can co-operate with enforcement agencies and the amelioration of potential penalties that can
be offered in response. This approach is also reflected in other jurisdictions, including the UK. DPAs are the new normal for companies that co- operate with the SFO. The agency can enter into a DPA with even the most serious corporate offend- ers, so long as they co-operate in an investigation. Companies that co-operate can receive up to a 50% reduction in a penalty, whilst those who do not co-operate receive the most punitive sanction available under the Sentencing Council’s Guide- lines if they are convicted after trial. Most of the 12 UK DPAs published to date illustrate this range of reduction. For example, in the Rolls-Royce case, the SFO offered, and the court approved, a DPA with a one-third discount, which is the equivalent of what is usually available for an early guilty plea plus an additional 16.7% discount in recognition of Rolls-Royce’s “extraordinary co-operation” (SFO v Rolls-Royce (Case No U20170036) [2017] Lloyd’s Rep FC 249, para 19). A DPA can sometimes entail the waiver of privi- lege and confidentiality of business-sensitive information but the extensive reduction in pen- alties and the avoidance of reputational damage from a trial are sometimes seen as a worthwhile trade off. Since 2020, all DPAs entered into by the SFO have received significant discounts on penalties of at least 40%, based on accepting liability and providing sufficient co-operation. The SFO is currently updating its Corporate Co- operation Guidance, which encourages com- panies to enter into dialogue with the agency and provide full transparency with a view to achieving a DPA. It builds on the extensive list of “indicators of good practice” contained in the 2019 version of the Guidance, which the SFO may take into account when assessing whether a company is genuinely co-operative. The kinds of behaviour in question are varied and include:
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