On the third day of Christmas, the High Court gave to me…three corporate crimes

With Advent upon us, and Christmas on the horizon, RPC takes a musical look back at the most important English judgments of 2018. Liability for all failures of numbering, rhythm and rhyme is hereby excluded.

Beware of employees bearing gifts of frankincense, myrrh and especially gold: 2018 saw the first conviction after a contested prosecution for the corporate offence of failing to prevent bribery, under s7 of the Bribery Act 2010. 

It was accepted that an employee of Skansen Interiors had sought to pay a cash bribe to an employee at a contractual counterparty (and indeed both were convicted and imprisoned^[1]).  However, the company had in many ways behaved entirely responsibly: the second instalment of the bribe had been caught and stopped, the employees involved had been dismissed, management had changed and the company had self-reported and cooperated in the investigation.  Further, since the company was dormant and without assets by the time of the prosecution, the sentencing judge gave it an absolute discharge.  Many saw this prosecution as unwarranted, and suggesting one rule for big companies (who take advantage of deferred prosecution agreements to avoid a prosecution and potential conviction) and another for SMEs.

2018 also saw the grant of the first three unexplained wealth orders^[2]  worth £22m and the first contested UWO.^[3]  UWOs, described by the press as 'McMafia orders', place an obligation on respondents to explain their interest in specific property and how it was obtained, with a view to the authorities seeking civil recovery of the property or criminal prosecutions of individuals if legitimate ownership and acquisition cannot be demonstrated.  

The first of the UWOs, and the first one to be contested,^[4] was against Mrs Hajiyeva (known as Mrs A in the proceedings), the wife of the former chairman of an Azeri majority state owned bank who in 2015 had been convicted in Azerbaijan of misappropriation, fraud and embezzlement.  The National Crime Agency's suspicion is that Mrs Hajiyeva's assets derive from her husband's criminal conduct.

The press made much of Mrs A allegedly spending £16m in Harrods over ten years and the seizure of £400,000 of jewellery at Christie's, but the UWO appears to have related specifically to a property in Knightsbridge bought for £11.5m in 2009.  Mrs A argued that the conditions for a UWO had not been reached, in particular that her husband was not a Politically Exposed Person and that he did not receive a fair trial.  None of her arguments persuaded the judge to discharge the UWO.  The NCA will have been pleased with the outcome and will be looking to capitalise on it.  Expect more to come in 2019.

For more thoughts on the Bribery Act 2010, see here and for a discussion on changing the basis for corporate liability, see here.

The Twelve Judgments of Christmas (2018)

On the first day of Christmas, the High Court gave to me…a privilege in E-N-RC.

On the second day of Christmas, the High Court gave to me…two LIBOR reps.

On the third day of Christmas, the High Court gave to me…three corporate crimes.

On the fourth day of Christmas, the High Court gave to me…[to be continued]