1. www.brownrudnick.com an international law firm Corporate Liability under English Law Mark Beardsworth Partner, Brown Rudnick LLP March 2015

2. www.brownrudnick.com Brown Rudnick LLP an international law firm BOSTON DUBLIN HARTFORD LONDON NEW YORK ORANGE COUNTY PROVIDENCE WASHINGTON, D.C. CORPORATE LIABILITY  Separate Legal Entity – A corporation is recognised as a distinct legal entity to those legal persons working within such corporation. Therefore, a company may or may not be liable for offences committed by those purporting to act on its behalf.  Example: The Bribery Act 2010 – Companies can be held criminally liable for the offence of failing to prevent bribery pursuant to Section 7. Therefore, a company commits an offence if a person associated with it bribes another person intending to (i) obtain or retain business for the company; or (ii) obtain or retain an advantage in the conduct of business for the company… unless adequate procedures were in place to prevent such conduct. -The “extraterritorial” element – covers wrongdoing committed anywhere in the world by any company which has any nexus to the UK. -Time limitation – only covers conduct undertaken after July 2011.  Companies don’t commit crimes, people do… – “[i]t follows that those who have a high level role in the organisation or management and by their own pleas or by the jury's verdict are shown to have been knowingly involved in corruption must bear a heavy responsibility in the criminal law” (Judge Goymer in the Innospec leaded fuel corruption case).  What next? The UK government is currently considering plans to introduce a new corporate offence of failing to prevent economic crime, broader in scope than the corporate offence of failure to prevent bribery under Section 7. Theoretically, this would make it easier to prosecute corporations for corruption-related offences.

3. www.brownrudnick.com Brown Rudnick LLP an international law firm BOSTON DUBLIN HARTFORD LONDON NEW YORK ORANGE COUNTY PROVIDENCE WASHINGTON, D.C. INVESTIGATION OF CORPORATES  Main investigator: -The Serious Fraud Office. Focuses on serious and complex fraud, or “the top strata of economic crime” (David Green). At the end of 2014, Green listed the following investigations as the current focus for the SFO: Barclays Bank plc’ alleged payments to Qatar Holdings LLC, Rolls Royce, GPT, GlaxoSmithKline, G4S, Serco, Alstom and the Sweett Group. -Other authorities: For example, the Financial Conduct Authority or the Crown Prosecution Service may alternatively bring actions.  Difficulties with establishing corporate liability: -Except for where specific criminal regimes exist (i.e. for corporate manslaughter, bribery), it can be difficult to attach criminal liability to a corporate body. -The identification principle: Under this principle, only acts of those who represent the directing mind and will of the company can be imputed to the company itself – in a large multi-tiered entity, this is virtually impossible.

4. www.brownrudnick.com Brown Rudnick LLP an international law firm BOSTON DUBLIN HARTFORD LONDON NEW YORK ORANGE COUNTY PROVIDENCE WASHINGTON, D.C. DPAS  A recent addition…. -Deferred Prosecution Agreements (“DPAs”) were introduced to the UK in 2014 pursuant to the Crime and Courts Act 2013. This is essentially an agreement struck between prosecutors and corporations which facilitates a suspension of criminal prosecution provided certain conditions are met (e.g. co-operation in prosecuting an individual, paying a fine, disgorging profits). -Authorities want more transparency and to encourage corporations to self-report wrongdoings. -DPAs and Non-Prosecution Agreements (“NPAs”) are frequently used in the U.S. During the first half of 2014, DOJ entered into 11 agreements to resolve a variety of alleged conduct spanning multiple DOJ divisions and sections. The SEC entered into one agreement. Of the 12 agreements total, 5 were NPAs and 7 were DPAs. “In the United States we are often able to achieve much more through a settlement – a negotiated settlement – than we could achieve following conviction at trial,” (Assistant Attorney General Lisa Caldwell).  And in the UK… -Judicial oversight: All DPAs must be approved by a judge who will consider whether preliminary terms are fair, reasonable and proportionate BEFORE the DPA is agreed. -Public interest test: Prosecutor must consider whether entering the DPA as opposed to prosecuting the corporate will be in the public’s interest.

5. www.brownrudnick.com Brown Rudnick LLP an international law firm BOSTON DUBLIN HARTFORD LONDON NEW YORK ORANGE COUNTY PROVIDENCE WASHINGTON, D.C.  Increased Collaboration: There is increased coordination between international investigative bodies to ensure improper conduct is punished irrespective of where it occurs, and as a result, companies may be face actions from several different international enforcement agencies simultaneously.  Example: Asltom – Alstom is a French conglomerate has been/is currently being investigated by the SFO, U.S., Swiss and French authorities for bribery and corruption.  Example: R v Innospec Ltd [2010]: a US company with a UK subsidiary agreed settlements with both UK and US prosecutors in lieu of prosecution for offences of corruption. UK and US authorities jointly agreed the sentence. INTERNATIONAL COOPERATION

6. www.brownrudnick.com an international law firm