A step towards transparency or the devil is in the detail? Analysing the effectiveness of the SFO’s new Corporate Guidance
7 min read
More than a decade ago, the concept of the Deferred Prosecution Agreement (DPA) became part of UK law. Ever since, there has been considerable uncertainty as to exactly what conditions a company needs to meet in order to be given the chance to enter into a DPA.
Coming forward
Over time, and as more DPAs have been publicly approved by the courts, it has become clear that self-reporting suspected corporate criminal conduct along with high levels of cooperation are regarded as key factors in being offered this form of disposal. At the same time, levels of self-reporting have been decreasing. However, the Serious Fraud Office (SFO) itself has never set out in writing that self-reporting is a key gateway condition, and the DPA case law has not been entirely consistent on this point.
The SFO's new External Guidance on Corporate Co-Operation and Enforcement in relation to Corporate Criminal Offending (the Corporate Guidance) has dealt with the point clearly for the first time, stating in the second paragraph: "If a corporate self-reports promptly to the SFO and co-operates fully we will invite it to negotiate a DPA rather than prosecute unless exceptional circumstances apply".
The Corporate Guidance later adds: "Whether, when and how a corporate self-reports suspected offending is a key consideration when assessing the public interest in favour of a DPA. We consider self-reporting suspected corporate criminal conduct to be a mark of a responsible organisation".
The SFO is presenting some welcome clarity and certainty. Its goal is to increase and incentivise corporate engagement, persuading more companies to come forward to disclose wrongdoing. The Corporate Guidance may make the self-reporting decision easier for some companies – but only a little.
In a launch speech on 24 April 2025, Nick Ephgrave, Director of the SFO, acknowledged that some may consider the Corporate Guidance to be "simplistic". Indeed, the decision to self-report is presented in the document as being relatively straightforward, but this belies the far more complex realities of a typical case. Companies will continue to face the same thorny issues including when exactly is the right moment to initiate a self-report and how much cooperation it would be reasonable – and safe – to give.
According to the Corporate Guidance, the SFO expects a company to self-report "soon after" learning of direct evidence of corporate offending, and generally before fully investigating the issue.1 Although the SFO accepts there will be situations where the position is "less clear-cut", this does not deal with the common situation in which a company has identified an instance of clear wrongdoing but does not know whether there is additional, as yet unidentified, wrongdoing, nor the full scale of the issue. A company self-reporting at this stage would be doing so at least partially blind. It would be concerning if this is what the SFO expected.
Moreover, when considering whether to make a self-report, issues around waiver of legal professional privilege (LPP), when and how to conduct interviews, and how to gather evidence in an internal investigation will remain very much in play.
The Corporate Guidance provides some useful practical details of how the SFO will handle self-reports, what it expects reports to contain and what a corporate should discuss with the SFO in relation to an internal investigation it is conducting or wishes to conduct. Any steps towards clarifying and demystifying this process are welcome, but it is difficult to envisage exactly how some of this may work in practice. Corporates will have their own timelines to consider, driven by commercial and practical realities as well as employment law concerns.
Cooperation or assistance?
Providing "genuine cooperation" is clearly a foundational point for the SFO, presented in the Corporate Guidance almost as a non-negotiable where a corporate hopes to be offered a DPA.
However, it is interesting that the SFO states it may still offer DPA negotiations to those who do not self-report where there is "exemplary cooperation" provided, reflecting the circumstances of earlier DPAs where there was no self-report but the corporate provided either "exemplary" or "extraordinary" cooperation and received a DPA and a 50% penalty discount.
The Corporate Guidance sets out an extensive – and in some places potentially burdensome – list of what the SFO considers to be cooperative behaviour.2 Its list of uncooperative behaviour is relatively short in comparison and includes activities that err towards the obstructive.3
We have the privilege
At the same time as considering whether to self-report, a well-advised corporate will be considering the impact on legal professional privilege. The protection afforded by LPP is a vitally important and jealously guarded part of English law. A genuine claim to LPP cannot be overridden by the SFO or the courts.
In the Corporate Guidance, the SFO rightly states: "A corporate which maintains a valid claim of legal professional privilege over relevant material will not be penalised for doing so". It then goes on to emphasise that a waiver of LPP would be considered "a significant co-operative act" which could help expedite matters, and notes that cooperation "means providing assistance to us that goes above and beyond what the law requires".4
Later, the SFO gives the example of voluntarily waiving privilege over interview records as weighing strongly in favour of cooperation.5
Although the SFO is in many places restating both what is set out in the DPA Code of Practice6 and precedents from its investigations and previously concluded DPAs, there is a risk that this overemphasis on going beyond legal requirements could be seen as exerting undue pressure on corporates to waive LPP.
Time is of the essence
In the Corporate Guidance, the SFO has committed to some clear negotiation and investigation timelines. It says it will "seek to" respond to a corporate self-report within 48 hours, make a decision on whether to open an investigation within six months, and conclude a DPA negotiation within six months.
These targets look very attractive given some corporates' experiences with vastly extended timelines over the past decade. Some DPA negotiations have lasted years. The SFO has clearly been listening to concerns raised by companies and their legal advisors; however, the reality of whether it can keep to these targets – and therefore how attractive self-reporting will become – will depend on its ability to adequately resource its cases.
No guarantees
It is always important for corporates to remember that being invited to negotiate a DPA does not mean a DPA will inevitably materialise. There are many factors at play, not least the SFO's duties as a prosecutor to consider what is in the public interest. The SFO may ultimately consider that a DPA is not the right way in which to dispose of a case. The status of the Corporate Guidance is also unclear; it certainly does not carry the binding weight of statute and an aggrieved corporate which has been refused the opportunity for a DPA will have limited – if any – recourse to remedies.
In the Corporate Guidance, the SFO says it considers self-reporting suspected "to be a mark of a responsible organisation".7 However, on the other side of the equation, a responsible corporate has a network of obligations and responsibilities and may decide that a self-report opens it to unreasonable uncertainty or too much risk (whether legal or commercial), and therefore that keeping matters undisclosed could provide the best outcome.
In the Corporate Guidance, the SFO has retained discretion to decline to offer a DPA negotiation where "exceptional circumstances" apply. In practice much will turn on how the SFO interprets words such as these (as well as terms including "genuine" and "promptly") and only real-life application of the Guidance will reveal its effectiveness or shortcomings.
A detailed reading of the Corporate Guidance may lead to the conclusion that the SFO is redefining the meaning of "cooperation", taking it far beyond the dictionary definition and more into the realms of assistance and support.
While the Corporate Guidance may have tipped the balance slightly, where potential wrongdoing is uncovered, corporates will continue to have some very difficult decisions to make.
1 Para 7.
2 Para 22.
3 Para 23.
4 Paras 20 and 21.
5 Para 22.
6 https://www.cps.gov.uk/publication/deferred-prosecution-agreements-code-practice.
7 Para 6.
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