Issue link: https://digital.shearman.com/i/1389983
28 firm and its former partner breached contracts and fiduciary duties by working with the SFO to expand the scope of its investigation to generate enhanced fees. While the alleged events took place before Ms. Osofsky's tenure, the allegations and counter-allegations have dogged the SFO for many years. Judgment in the trial is expected later this year. Of course, no one can sensibly argue that the SFO's task is an easy one. The majority of investigations the organization undertakes are complex and resource- intensive and usually concern multiple suspects. They invariably require the assistance of overseas authorities and are increasingly conducted in conjunction with other agencies, both in the U.K. and abroad. Most acknowledge that such investigations will take time to resolve and will not always lead to DPAs, prosecutions, or convictions. However, like most other law enforcement and prosecution agencies in the U.K., the SFO is under ever- increasing political and public pressure to improve on its performance. BRIBERY ACT 2010 July 1, 2021 marked 10 years since the Bribery Act 2010 came into force. In that time, there have been dozens of prosecutions brought by the SFO and the Crown Prosecution Service, almost exclusively against individuals. Some will argue that there ought to have been more, but few would disagree that the Act has altered the corporate crime landscape in the U.K. in three significant respects. First, supporters of the legislation, including Ms. Osofsky, argue that it has transformed corporate culture in the U.K. While broader concepts of corporate criminal liability existed in some areas, such as health and safety legislation, before the enactment of the 2010 Act, the introduction of a "failure to prevent" offence – with significant extra-territorial reach – was a novel concept under U.K. law. In 2017, the OECD noted that the Bribery Act 2010 had "prompted substantial progress" in the adoption of anti-corruption measures, which it found were "well advanced" in U.K. companies. Second, the Act has underpinned seven of the ten DPAs secured since their introduction under the Crime and Courts Act 2013. Furthermore, the total financial penalties imposed under DPAs relating to bribery and corruption dwarf the total concerning serious fraud. Settlements like those secured against Airbus SE and Rolls-Royce Plc have helped to secure the success of the newly- introduced regime and have ensured that the investigation of bribery and corruption has continued to receive significant attention. Third, the perceived success of the Bribery Act 2010 has paved the way for further "failure to prevent" offences. The Criminal Finances Act 2017 introduced criminal liability for corporates who fail to prevent the facilitation of U.K. and foreign tax evasion, and, in response to a U.K. Government request, the Law Commission is currently examining whether other similar offences ought to be introduced. REGINA (ON THE APPLICATION OF KBR INC) v DIRECTOR OF SFO On February 5, 2021, the U.K. Supreme Court handed down its judgment in Regina (On the Application of KBR Inc) v Director of the Serious Fraud Office [2021] UKSC 2. In a unanimous decision, the Court ruled that the SFO cannot use its investigation powers under section 2(3) of the Criminal Justice Act 1987 to compel a foreign company to produce documents it holds outside the U.K.—overturning an earlier High Court decision. The SFO's primary powers of investigation are set out under section 2 of the 1987 Act—the statute that created the SFO. Section 2(3) permits the Director of the SFO (and those delegated by her) to require by notice in writing "[a] person under investigation or any other person to produce at such place as may be specified in the notice and either forthwith or at such time as may be so specified, any specified documents which appear to the Director to relate to any matter relevant to the investigation or any documents of a specified class which appear to [her] so to relate." The Director may also require "the person producing them to provide an explanation of any of them." If any documents are not produced, the Director may require "the person who was required to produce them to state, to the best of his knowledge and belief, where they are." There are penalties, including imprisonment, for failing to comply with, or seeking to evade the terms of, a section 2(3) notice. KBR Inc is a U.S.-incorporated parent company that does not have a fixed place of business in the U.K. (nor has it ever carried on business in the U.K.), but it does have U.K. subsidiaries, including Kellogg Brown & Root Ltd (KBR Ltd). Having commenced an investigation into the activities of KBR Ltd, among others, in April 2017, the SFO issued a notice under section 2(3) to KBR Ltd. In response, KBR Ltd provided various documents to the SFO, but made it clear that some of the requested material was held by KBR Inc in the U.S., if and to the extent that it existed. During a meeting held in the U.K. on in July 2017, a further notice under section 2(3) was handed to KBR Inc's Executive Vice President, General Counsel, and Corporate Secretary requiring KBR Inc to produce documents held by it outside the U.K. KBR Inc's Chief Compliance Officer and the company's U.K.-based lawyers also attended the meeting. KBR Inc sought judicial review of the SFO's decision to issue the July notice on three grounds. First, that the notice was ultra vires as it requested material held outside the jurisdiction from a company incorporated in the U.S. Second, that it was an error of law to issue the notice given the Director had the power to seek mutual legal assistance from the U.S. authorities. Third, that the notice