As reported by Risk Xtra, the Deferred Prosecution Agreement (DPA) recently announced between Airbus and the Serious Fraud Office (SFO) means that the former will pay €991 million – making it the UK’s largest DPA – as part of a €3.6 billion global settlement. Here, Aziz Rahman outlines why he believes that it’s not just the numbers that are important about this particular settlement.
While Airbus is probably relieved to have avoided prosecution over alleged bribery, the huge amount of money that the company is now having to pay out in order to settle such allegations has generated significant headlines in the national and business-focused media alike. The Airbus settlement is noteworthy for other reasons as well, though.
For a start, it marks the first time that the SFO has decided to use the wide territorial reach of the UK’s Bribery Act. Yes, the possibility has always been there for it to do so, but this is the first occasion where it has been fully used. Airbus has come under investigation in the UK – and effectively been penalised here – for activity that was not conducted in the UK. The counts on the indictment cover alleged Airbus conduct in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana.
There has been enforcement in the UK by the SFO, not to mention widespread mutual legal assistance between countries. The SFO has been emboldened by that collaboration effort and has shown that it’s well placed to co-ordinate with others in the investigative process. This accords with many of the soundings that have been growing ever louder from the SFO’s current regime.
Whether this case heralds a new era of post-Brexit co-operation – ‘enquetes sans frontieres’, for want of a better phrase – is something that will only become clear with time, but it wouldn’t be going too far to suggest this is a case that sets the standard for future investigations and raises the bar pretty high for what’s expected of corporations.
Independent investigation process
Significantly, the SFO examined the internal investigation documents – including the transcripts of interviews with Airbus employees – as the latter waived legal professional privilege on a limited basis. The SFO also undertook its own independent investigation. This could be seen as an indicator that the SFO is looking to create a culture of companies under investigation waiving privilege.
If that is indeed the case, it’s an approach that’s being taken in spite of, rather than as a result of, the 2018 Court of Appeal ENRC judgement which overturned a controversial High Court decision that had narrowed the scope of legal professional privilege in internal investigations. Arguably, this isn’t a surprise.
In its ‘Corporate Co-operation Guidance’ issued last year, the SFO asserted that, if an organisation claims privilege, it will be expected to provide certification by independent counsel that the material in question is privileged. Before that guidance was issued, some senior SFO figures had talked of the possibility of companies being required to waive privilege in order to show co-operation.
Wider issue of co-operation
While this settlement emphasises the importance that the SFO has come to attach to privilege, it also shows how the wider issue of co-operation carries huge weight in such an investigation. The DPA explains in great detail the lengths Airbus went to in order to assist the investigation. To name just some of its actions, Airbus confirmed the existence of corruption concerns, identified issues that investigators were unaware of, reported conduct that had happened largely overseas and collected more than 30 million documents.
In addition, its new Board of Directors co-operated fully with investigators and created a new company-wide approach towards the hugely important matter of compliance.
There can be little doubt that, if Airbus was to receive lenient treatment, it had to show a major departure in its workplace culture from the ways that, allegedly, it had previously set about obtaining business. The fact that it did this is most certainly a feather in its cap.
As for individuals, given the sheer amount of documentation it’s hard to see how a smoking gun will be found in the arsenal which has been inventoried. It will be a brave decision by the SFO to once again test the strength of its convictions about individuals under investigation when, thus far, its efforts have led to no convictions at all. A potential further defeat could well take the shine of what is, on the face of it, a stunning victory for the SFO.
Escape from prosecution
As an organisation, Airbus can undoubtedly pat itself on the back having engineered that all-important escape from prosecution. However, this is a case that shows the stringent demands now placed on any corporation that wishes to have any chance of avoiding a trial.
On paper, the SFO seems to have secured the silver medal on the podium in terms of the penalty values involved. That said, it will perhaps come as no surprise that the US has again raised the stakes with the value of the penalty it has imposed, but graciously allowed the French to take the credit.
After all, this is their domain, and therefore their problem. The fact that Boeing might have issues may have had some bearing on this situation.
Aziz Rahman is Senior Partner and Head of the Corporate Crime Group at Rahman Ravelli Solicitors