BAe plea deal cast into doubt

It is reported in the Financial Times and in the Guardian that at the hearing at Southwark Crown Court today Mr. Justice Bean refused to sentence BAe saying he could not do so without hearing more evidence UPDATE adjourned sentencing until tomorrow after hearing submissions and argument about the nature of the underlying payments.  The Financial Times reports the judge as saying that he would proceed to sentence on the basis that a named third party “was to have free rein to make such payments to such people as he thought fit”.  The FT article contains more details on today’s hearing and we recommend you read it.

Earlier reports in the Guardian and the Financial Times described a turbulent day in court with the Mr. Justice Bean asking some probing questions before being prepared to sentence.

Disappointing

The hearing today, the judge’s questioning and the basis upon which the judge is approaching sentencing will be a blow disappointment to the Serious Fraud Office which will have hoped that today’s hearing would draw a line under what has been a high profile and controversial case in which the SFO does not allege the making of corrupt payments and BAe has consistently denied any such allegation.

The crossing of the criminal rubicon

It is noteworthy that the outcome of the BAe case has been a criminal prosecution, albeit for technical offences.  Sentencing in criminal prosecutions is (and always has been) in the discretion of the UK Courts.  A point forcefully made by Lord Justice Thomas in Innospec.

The judge’s request for further information today in the BAe case demonstrates that the principles set out in Innospec by Lord Justice Thomas are being followed.

The jury is out

The impact on the SFO’s ability to reach a civil settlement *shouldn’t* be impacted by this latest twist in the BAe saga, though all courts have an inherent discretion.  In a civil settlement no prosecution is launched and a different court procedure is followed.

Calls for updated settlement powers by the SFO

This latest development will no doubt increase the vigour with which the SFO and Richard Alderman in particular are calling for settlement powers (including the use of Deferred Prosecution Agreements) similar to those in the United States and frequently used in similar circumstances.  UK law contains no similar tool in the prosecutors tool box for dealing with these cases.