The first ever Bribery Acquittal for clients following a Deferred Prosecution Agreement

On Tuesday 16th July 2019, Dan Stowers of Shoosmiths, Henry Grunwald QC of Charter Chambers and John Harrison KC of St Pauls Chambers, made legal history. The team secured the first-ever bribery acquittal for their client following a Deferred Prosecution Agreement.

The client, Michael Sorby, was the managing director of Sarclad Ltd, a medium-sized steel tech company based in Yorkshire, part of the Heico Companies group. Along with two other employees, they were accused of conspiring with various overseas sales agents between 2014-2011 to offer bribes to secure contracts for the firm to the tune of £17 million.

Prosecuted by the Serious Fraud Office (SFO), a Deferred Prosecution Agreement (DPA) was reached between the SFO and Sarclad Ltd in July 2016. Sarclad accepted the charges of corruption and failure to prevent bribery in relation to the systematic use of bribes to secure contracts. As a result of the DPA, Sarclad agreed to pay financial orders of over £6.5 million.

On the 16th July 2019, following a ten-week trial in Southwark Crown Court, Michael Sorby, Adrian Leek and David Justice were acquitted three years after the DPA was entered into.

John Harrison KC said:

“The verdicts returned in Southwark have rightly received a great deal of media coverage reflecting their significance. Mr. Sorby is the first managing director to be prosecuted, and then found not guilty, following the conclusion of a DPA between the SFO and Sarclad (formally publicised as XYZ). This is no time for a discussion of all the wider implications of the case but I thank Dan Stowers at Shoosmiths for my instructions in this case and all the hard work carried out by him and his team.”

Instructing Solicitor, Dan Stowers, the Shoosmiths’ partner said:

“The SFO was too ready to accept a version of events presented to them by the lawyers for Heico, rather than undertaking an independent investigation of their own. Their haste led to an unnecessary, misguided and unsuccessful prosecution. The investigation and, if necessary, prosecution of individuals should precede a DPA and not follow one”

Dylan Tokar of The Wall Street Journal reported:

“Their acquittal is expected to raise questions about Sarclad’s deferred prosecution agreement with the SFO. The agreement was reached in 2016, but Sarclad’s name and other details were kept under wraps until Tuesday while the SFO pursued criminal charges against the executives. The agency has struggled to prosecute individuals on charges stemming from the agreements, which became available in 2014.”

St Pauls Chambers is grateful to Dan Stowers of Shoosmiths for the instruction on this case. There have been many years of hard work from the legal team and we thank Dan in particular for giving us the opportunity to share in this fantastic achievement.