Jim Armitage: Corporations can't trust the US justice system

The reluctance of governments to pursue crooked corporations through criminal trials has led to a flourishing of out-of-court deals where companies can buy off the justice system with cash.

In the US, they’ve become a mainstay of the economy, extracting billions of dollars from banks like HSBC and Standard Chartered.

These deals aren’t just a revenue raiser, though. In many cases, US officials also install monitors into the offending organisations to ensure the bad behaviour ends.

Get a “fail” from the monitor, and you pay more fines, as Standard Chartered found to its $300 million (£209.9 million) cost.

Monitors are hated and feared in equal measure in the banks they roam through. But there’s one good thing about them from the bank’s perspective: as part of the deal, their progress reports are kept secret, giving the offending banks breathing space to fix their procedures behind closed doors.

Until now.

In a bombshell ruling, a US judge has agreed that, in the case of HSBC, the American public has a First Amendment right to see what its monitors are saying.

Now, even if you’re sceptical of out-of-court settlements, this sudden U-turn simply can’t be fair. HSBC paid $1.9 billion to the US, thinking it had done a deal. The judiciary shouldn’t then be able to rip up a substantial part of their end.

Can HSBC now renege on its side, too, and demand its money back or kick out its monitors? Of course not.

Other corporations looking to strike deals with the US justice system beware. It can’t be trusted.