G4S C&J and the Evolution of the SFO DPA - Never Too Late to Cooperate?

August 17, 2020

On 17 July 2020, the Serious Fraud Office (“SFO”) entered into its eighth Deferred Prosecution Agreement (“DPA”) with G4S Care and Justice Services (UK) Ltd (“G4S C&J”) (a wholly owned subsidiary of G4S plc).1 

Under the terms of the DPA, G4S C&J accepted responsibility for three offences of fraud contrary to section 2 of the Fraud Act 2006 arising from a scheme to deceive the UK Ministry of Justice (“MoJ”) as to the true extent of G4S C&J’s profits between 2011 and 2012 stemming from its contracts for the provision of electronic monitoring services. The company deliberately over reported their costs in relation to a prison monitoring contract which led to the company retaining profits it otherwise would have been obliged to share with the MoJ. G4S C&J agreed to a financial penalty of £38.5 million (which included a discount of 40%) together with the implementation of a corporate renewal programme. 

The G4S C&J DPA, has given us further insight into the practical developments of the DPA regime:

  • The cooperation test is based on an overall assessment of how the company behaved during its interactions with the SFO. Earlier failures to cooperate will not disqualify a company from obtaining a DPA if fulsome cooperation with the SFO is provided at a later stage.
  • Failings in how a company cooperates with the SFO will likely affect the level of any penalty discount credit available to the firm.
  • U.S.-style monitorships may become more common especially for those companies that benefit from government contracts. 
  • If parent corporations wish for their subsidiaries to benefit from a DPA they should be prepared to undertake responsibility for operating and implementing a wholesale compliance evaluation and renewal programme across its entire business.

1. Cooperation

Cooperation is an essential factor for the SFO when determining whether a company is eligible for a DPA.2  In August 2019 the SFO issued best practice guidance on the steps companies should take if they to decide to cooperate with the SFO.

The fact that the court found G4S C&J’s level of cooperation was less than full until a relatively late stage of the investigation, but nevertheless qualified them for a DPA, shows the flexibility and practical awareness the SFO and the court has when dealing with the vagaries of complex investigations.  

Mr. Justice Davis noted in his judgment that it is the overall level of cooperation that matters and in that respect, “initial reluctance to co-operate fully can be dealt with when considering the discount on any financial penalty”.4  It was not until October 2019 when, following a change in management, the cooperation levels of G4S C&J with the SFO “intensified very significantlyand included a limited waiver of privilege over all interviews conducted by its solicitors; voluntarily responding to investigative requests; providing digital and hardcopy material; and assisting the SFO obtain or trace third party material. 

This mixed approach to cooperation by G4S C&J ultimately led to a 40% discount on the penalty. A discount of 40% for late cooperation compared to 50% for “exemplary cooperation” is a clear message of encouragement to companies to engage with the SFO however late it may be in their investigation.     

2. Monitorship

The G4S C&J DPA differentiates itself from prior SFO DPAs in terms of the intensity of the external scrutiny required which is greater than previous DPAs.6 The G4S C&J DPA requires, for the first time, the appointment of an external Reviewer to review and report on the compliance measures being implemented along with the now standard expectations of remediating and enhancing compliance controls in relation to the company entering into the DPA. The selection process requires SFO approval of the third party Reviewer and the format in which they report back to the SFO is set out in detail in the DPA.

The idea of a monitorship, whilst not common in the UK, is not new. It is a widely used tool under U.S. law and it may be expected that under the stewardship of Lisa Osofsky, Director of the SFO and formerly a U.S. Prosecutor and monitor in private practice, monitorships may become more prevalent in relation to UK DPAs. She alluded to this in a speech to the Cambridge Symposium in September 2018, shortly after her arrival in position when she said, “Corporate rehabilitation requires a strong, ongoing compliance function. Window dressing will not suffice. Expect us to ask tough questions on this subject as we are not in the habit…of recommending DPAs for recidivists.”  

It is likely that the landscape is shifting at the SFO and monitorships will be more readily considered as an option in any future DPAs.

3. Parent Ownership Obligations 

As part of the remedial actions to be overseen by the external Reviewer, the parent company, G4S plc, are required to enter into a formal and binding undertaking to ensure compliance measures are maintained and enforced.  Similar requirements were made of Serco Group Plc, the parent of Serco Geofrafix, when that DPA was entered into in July 2019. In his judgment, Mr. Justice Davis noted that the onus on G4S is all the more important than it was on Serco as G4S C&J remains a substantial trading entity. 

The G4S C&J DPA details the requirements that will affect the Group as a whole including: significant personnel changes; the creation of a Board Risk Committee to oversee contracts held by G4S and its constituent companies; a change in reporting lines to ensure that financial officers and auditors report to Group officers rather than the leadership of an individual company; and a review of the financial governance of G4S by outside bodies. 

The purpose of a DPA has always been to effect corporate change through remediation. The compliance tasks agreed by G4S, and the timeframe within which to complete them makes this is a more stringent DPA than others. Companies should be aware that eligibility for a DPA may require far-ranging changes to their corporate structure and not just to the implicated entity. 


With G4S C&J being the eighth DPA entered into with the SFO, we are seeing an evolution of the requirements of the SFO for companies hoping to benefit from entry into the process. 

Whilst there appears to be some leeway in the amount of cooperation that a company can offer the SFO, and whilst a self-report is strongly encouraged by the SFO, it is not a pre-requisite to being offered a DPA. However, it is likely that the SFO, at least under the directorship of Ms. Osofsky, will require external monitoring, whether voluntary or imposed, for the duration of the deferral and engagement of the corporate parent to ensure a more robust and permanent cultural change. 
Engaging early and collaboratively with counsel, implementing robust risk governance oversight and control and the appointment of an independent compliance professional throughout the investigation will all act to mitigate the risks of receiving a monitorship as part of any DPA.

*Dechert successfully advised Airbus SE in a global investigation into allegations of fraud, bribery and corruption, and subsequently coordinated settlements (DPAs and a Consent Order) with the UK Serious Fraud Office, French Parquet National Financier, U.S. Department of Justice and U.S. Department of State.


1) The DPA only relates to the potential criminal liability of G4S Care & Justice Services (U.K.) Limited and does not address whether liability of any sort attaches to any employee, agent, former employee or former agent of G4S Care & Justice Services (U.K) Limited 

2) Deferred Prosecution Agreements Code of Practice’  (“DPA Code”), allows for “considerable weight” to be given to a “genuinely proactive approach” adopted by the company’s management team when the offending is brought to their attention. 

3) SFO Operation Handbook: Corporate Co-operation Guidance’, 6 August 2019

4) Davis J at para 27 of the judgment 

5) Davis J at para 23 of the judgment  

6) Davis J at para 43 of the judgment 

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