By Tracey Dovaston, Matthew Getz, Peter Skinner, Prateek Swaika, and Mark Kelley
So your corporate has done the crime (or not). It has decided to do the time (or not). But what does “time” entail for a corporate facing a criminal conviction? Where does the liability start and where does it finish? Can it simply pay its way out? Can it ever draw a line under the incident?
Admissions of guilt and imposition of financial penalties are direct consequences of a corporate criminal conviction or negotiated resolution. However, alongside a conviction or a resolution, with or without an admission of guilt, there are less obvious connected and collateral consequences that may apply. These consequences can have a significant and often negative impact well after a penalty has been paid. They require careful analysis when a corporate is assessing whether to enter into any form of settlement with the authorities in relation to criminal allegations. The consequences can range from exclusion from public procurement contracts to an extensive compliance remediation exercise, even a monitorship, and from investigations or prosecutions in other jurisdictions to exposure to follow-on litigation, including class actions. In an environment where global regulators co-operate extensively and share information by the terabyte, a corporate considering self-reporting misconduct should assess from a very early stage its potential legal and financial exposure, across multiple jurisdictions.
In this chapter, we provide an overview of these complex and inter-related collateral consequences, with a focus on those that may arise for corporates in the UK and US when being prosecuted for corporate crimes. More
This article was first published in the ICLG - Business Crime.