International - Written by on Wednesday, October 12, 2011 0:10 - 0 Comments

Try harder: Inadequate disclosure in Scottish self reports – lawyers told to try again…

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By Fiona Caldow – Pinsent Masons LLP Glasgow

In July 2011, the Lord Advocate in Scotland announced an initiative for businesses to self-report offences under the Bribery Act to the Serious and Organised Crime Division (“SOCD”) of the Crown Office, with a view to reaching a civil settlement and avoiding prosecution. We previously reported on the guidance on the Scottish self-reporting scheme here.

On Thursday 6 October, The Deputy Head of the SOCD, Ernie Shippin, told a conference hosted by the WS Society on Bribery and Corruption in Scotland that, in appropriate cases, the SOCD intends to be sympathetic to companies who self-report.  However, he also stressed that some offences will simply be “too serious” to be accepted to be dealt with via civil recovery. He gave the example of the prosecution of Weir Group for breaches of UN sanctions as involving circumstances which would have been inappropriate for civil recovery given the seriousness of breaching UN sanctions and diverting funds away from the Iraqi people.

It also appears that the SOCD intends to be rigorous in requiring a thorough investigation to have taken place prior to accepting a report as constituting adequate disclosure.  Mr Shippin indicated that the SOCD has received 2 approaches under the self-reporting initiative since it came into force in July and that both have been sent back to the solicitors acting for the reporting business with requests for further information before they will be accepted as adequate disclosure reports.

With regard to timescales, Mr Shippin recommended reporting as soon as there is clarity as to what needs to be reported.  The SOCD may then be willing to agree a timescale to allow for carrying out a full investigation and submitting an adequate disclosure report.  This would protect the reporting company by allowing it to benefit from the self-reporting initiative if the matter was to come to the authorities’ attention by other means in the intervening period.

It was confirmed that if a case is accepted as being appropriate for civil recovery, no press announcements would be made until the end of the civil recovery process.

Mr Shippin also indicated that where an alleged offence is prosecuted (rather than dealt with via the civil recovery process) then, although confiscation proceedings are normally dealt with following a verdict, there would be scope to seek to negotiate and reach agreement on the level of confiscation in tandem with submitting a guilty plea.

Mr Shippin’s comments highlight the importance of conducting a thorough investigation before approaching the Crown Office.

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