‘Deferred Prosecutions Agreements are Unfair to Individuals’ writes Richard Sallybanks for Law360

BCL partner, Richard Sallybanks writes for Law 360 examining the case between the U.K. Serious Fraud Office and Tesco Stores Limited following the recent publication of the terms of the deferred prosecution agreement which provides a glaring example of how a DPA can result in real injustice to individuals and how the statutory DPA regime fails to provide them with any remedy.

Below is a small excerpt from the Law360 article*.

‘On Sept. 22, 2014, Tesco PLC announced that it had identified a £250 million overstatement of its expected profit for its half year to Aug. 23, 2014, principally due to the wrongly accelerated recognition of commercial income. There followed an investigation by the SFO which resulted in September 2016 in three former senior executives of Tesco’s U.K. business being charged with fraud by abuse of position and false accounting: Chris Bush, formerly the managing director, Carl Rogberg, formerly the finance director, and John Scouler, formerly the commercial director for food.

All three stood trial between September 2017 and February 2018 when the trial was stopped after Rogberg suffered a heart attack. A retrial of Bush and Scouler commenced in late September 2018 and concluded in December 2018 when the trial judge, Sir John Royce, ruled that there was no case to answer, a decision upheld by the Court of Appeal in refusing an application by the SFO for leave to appeal. In light of the outcome of the retrial, on Jan. 23, 2019, the SFO formally offered no evidence against Rogberg, who had been too ill to participate in the retrial, and not guilty verdicts were entered by the court. Thus all three defendants were acquitted of both charges which they faced.

Separately, a DPA had been concluded between the SFO and TSL, Tesco PLC’s U.K. operating company, in respect of a charge of false accounting, the terms of which mirrored the false accounting charge faced by the defendants. The DPA was approved by the court on April 10, 2017 (after the three defendants had been charged but before they stood trial), although publication of the statement of facts, or SoF, underlying the DPA was restricted until the conclusion of the criminal proceedings to avoid the risk of prejudicing those proceedings. This is why, following Rogberg’s acquittal on Jan. 23, 2019, the DPA, the SoF and the judgment of Sir Brian Leveson, President of the Queen’s Bench Division, approving the DPA on April 10, 2017, were finally made public.’

*This article was first published by Law360 UK on 19th February 2019. You can continue to read the full article on the Law360 UK website.

Richard Sallybanks specialises in complex business crime and regulatory defence work. Richard has been involved in numerous SFO, FCA, HMRC & CMA investigations and prosecutions, together with associated restraint and confiscation proceedings. His recent SFO experience includes the Alstom, Barclays Qatar, and Tesco investigations (acting for senior individuals under suspicion), as well as acting for Robert Tchenguiz in the SFO’s Kaupthing Bank investigation (including the successful Judicial Review challenge to SFO search warrants). Richard has acted in a number of FCA criminal and regulatory investigations for brokers, traders and senior executives, including in relation to allegations of insider dealing and market abuse. He is experienced in cartel investigations, both domestic investigations conducted by the CMA and cross-border anti-trust investigations (including those conducted by the US DoJ). Richard is also experienced in the international mutual legal assistance regime, and in leading and co-ordinating teams of lawyers in multi-jurisdictional investigations.