Lawyer Monthly Magazine - September 2021 Edition

50 WWW.LAWYER-MONTHLY.COM | SEP 2021 CORPORATE CRIME AND THE REGULATORY APPROACH circumstances the process of prosecution and punishment by the criminal courts is largely an irrelevancy. “The real need is for a constructive means of ensuring that practical improvements are made and preventative measures adopted. Whatever the value of the threat of prosecution, the actual process of prosecution makes little direct contribution towards this end ... We recommend that criminal proceedings should, as a matter of policy, be instituted only for infringements of a type where the imposition of exemplary punishment would be generally expected and supported by the public. We mean by this offences of a flagrant, wilful or reckless nature which either have or could have resulted in serious injury…” 1 However, that approach has long since passed. When serious harm occurs, it is commonplace to see prosecutions of even the most conscientious organisations. Culpability All else being equal, organisations which are much less culpable should pay much smaller fines – if prosecuted at all. However, with criminal regulatory offences in place, if harm occurs, the first question is: Why did the company not prevent it? Cognitive bias is now well understood. Unfortunately, that understanding is rarely applied in the criminal justice system. 2 So, a system which failed to prevent harm risks being judged a bad system. What might be viewed as a remote possibility before the event will afterwards be considered an incident or crime waiting to happen. If people did not follow the required systems, it is assumed to be because the company did not train them, or lead them, or monitor them properly. Organisations are expected to be able to overcome the everyday failings of people. If they do not, the organisation is not merely held responsible: it is judged to have committed a very serious crime. Airbus – a case study? In 2020, Airbus entered a DPA with the SFO in relation to bribery offences, covering • when Airbus identified weaknesses, the systems were reviewed and updated, and payments frozen; and • Airbus was slow to self-report, but thereafter cooperated with the prosecuting authorities to the fullest extent possible. Under the DPA, Airbus agreed to pay €991 million in the UK as part of a €3.6 billion global resolution, involving authorities in France and the United States. It has been reported that the SFO has decided not to prosecute any individual suspects. It remains possible that an overseas prosecutor will. Conclusion The extension of the regulatory approach will see more organisations pay highly punitive fines for harm or wrongdoing which they have limited ability to prevent. By one route or another, it may also mean that fewer culpable individuals are prosecuted. For the criminal law to be fair and robust it should ensure that culpable persons are prosecuted, whether organisations or individuals, and that any punishment imposed is proportionate to that culpability. 1 Safety and Health at Work: Report of the Committee, 1970- 72, Chairman Lord Robens, p.82. 1 The author discussed cognitive bias here: https://www. hsmsearch.com/Cognitive-bias-health-safety-investigations. serious criminality across five jurisdictions between 2011 and 2015. Based on the agreed statement of facts, Dame Sharp noted in her judgment that: • most of the conduct was by business partners (i.e. intermediaries or agents), but also involved employees, some very senior; • Airbus had in place externally certified bribery prevention policies; • individuals deliberately circumvented the systems, including by the creation of false invoices, payments and other compliance material; Regulatory offences are now treated much more seriously, even when failings are merely systemic.