28 Nov 2019 04:30pm

Deal or no deal? Is the DPA worth it?

Is the Alstom case a salutary lesson for corporates that dare to go head to head with the SFO and have their day in court?

On 25 November, Alstom Network UK Ltd, a subsidiary of the French multinational, was ordered to pay a £15m fine following the company’s conviction for paying bribes to secure a Tunisian tram contract.  At first blush, the outcome of the case would seem to vindicate Lisa Osofsky’s mantra that companies are best served by cooperating with a Serious Fraud Office (SFO) investigation. Osofsky, who was appointed SFO director in August last year, continues to encourage corporates to cooperate in the hope that if criminality is uncovered, a deferred prosecution agreement (DPA) will be on offer. A DPA is an agreement reached between a prosecutor and an organisation under the supervision of a judge. DPAs can of course seem very attractive to a corporate – the agreement allows a criminal prosecution to be suspended for a specified period provided the organisation meets certain conditions. Interestingly, DPAs are not available to individuals in the UK, so it is only the corporates themselves which can benefit from one.

However, the headlines in respect of the fine imposed in this particular case do not quite tell the whole story. This was one trial in a series of prosecutions brought against Alstom subsidiaries and individuals working within it. The SFO spent nearly 10 years bringing the cases with various degrees of success, and there have been other convictions but also many acquittals. In this particular case, the company was convicted of the one offence back in April last year following a 16-week trial at Southwark Crown Court. The company was found not guilty by the same jury of two further allegations that bribes were paid in India and Poland. Furthermore, both senior individuals who were on trial at the same time were unanimously acquitted by the jury.

Although the fine imposed on Alstom Network UK was significant, it is not in the same league as the enormous financial penalties paid over by corporates such as Rolls Royce (£497m) and Tesco (£129m) which have entered into DPAs with the SFO. In these two cases, the companies accepted criminality based on the actions of individuals within the company yet no individuals have been convicted of criminal offences so far. The SFO announced in February 2019 that no charges would be brought against any of the individual suspects in the Rolls Royce case, and in the Tesco case the judge dismissed the charges against the individuals before the allegations could even be put to a jury.

In the Alstom case, the company was ordered to pay £1.4m in prosecution costs – a significant sum, though this figure is dwarfed by the huge potential costs incurred routinely by corporates that go through a full internal investigation and then self-report to the SFO.

The use of DPAs is on the rise around the world with many jurisdictions following in the well-trodden steps of the US where they have been offered for companies (and unlike in the UK also for individuals) for over 20 years. However, those companies facing an investigation in the UK will inevitably consider the mixed outcomes of the prosecutions of corporates and the individuals employed by them, and will be more cautious in how they approach cooperation with the SFO.

The take away from this case must be that corporates ought not to fear the prospect of taking on the SFO – defending these allegations is by no means an insurmountable task.


Emma Brooks is a partner in Byrne & Partners LLP where she specialises in corporate fraud, white collar crime and regulatory work. She advises and represents clients, pre and post-charge, in relation to allegations of serious fraud, corruption, money laundering, confiscation and restraint orders and all other areas of business crime. She represented former Alstom director Graham Hill, who was unanimously acquitted of all charges against him.