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ALL CHANGE? Aziz Rahman considers the Crown Prosecution Service’s report on the Serious Fraud Office and wonders what, if anything, needs to change.

14 July 2016

The report by the Crown Prosecution Service (CPS) on the Serious Fraud Office (SFO) accentuates the positive and goes some way to finding reasons for the negative. It’s like a school report given to a child that isn’t too bright but isn’t in the bottom group.

The report by the Crown Prosecution Service (CPS) on the Serious Fraud Office (SFO) accentuates the positive and goes some way to finding reasons for the negative. It’s like a school report given to a child that isn’t too bright but isn’t in the bottom group.

An improvement in staff morale and better quality control and risk assessment are praised, as is the improvement in leadership since David Green became Director four years ago. Yet, the report highlights a need to increase awareness of value for money, the possible merits of appointing a chief executive and the importance of improving reporting lines between committees and the board.

Of these, the first seems to prompt most attention. At present, the SFO receives its annual budget but can then apply for what has been dubbed blockbuster funding from the government to deal with major cases as they arise. The CPS’s report says that if the SFO had greater core funding its long-term planning and ability to retain in house expertise would be improved

Improved

The general consensus is that the SFO has improved significantly under David Green. A CPS report on the SFO in 2012 – the year Green was appointed – said its intelligence gathering was confused and its processes weak. Two years ago, a further report said the SFO was still not equipped to deal with the most serious corruption cases. Such criticisms are not in this latest report.

This is a current picture that is not tainted by the SFO’s past failings. Such as its repeated failure to convict two directors in the huge Imperial Consolidated trial and retrial. That saga, in which we successfully represented a client, dragged on at huge expense until ending in embarrassment for the SFO in 2010. The current picture also does not have to consider the SFO’s shambolic handling of the investigation into – and raids of premises belonging to – the Tchenguiz brothers. The Tchenguiz brothers episode proved enormously costly in terms of money and finance for the SFO.

Such major failures, David Green would surely be keen to point out, happened before he was in the hot seat. It is hardly surprising that the SFO wants to move on from the past and plan for a brighter future. But how easy will that be?

Long-term funding could help the SFO, as the CPS suggests. But what guarantees does it give that the SFO will avoid major failings in the future? I would suggest very few.

Achievements

The last two years have seen achievements that the SFO can feel justified in trumpeting. The first Bribery Act conviction, the first use of a deferred prosecution agreement and the first criminal convictions over Libor rigging. Yet, just a matter of months ago, the SFO dropped its Forex investigation; with no charges brought after 18 months’ work and examination of 500,000 documents. Whether such a labour-intensive and ultimately fruitless exercise can be justified is still unclear.

In the SFO’s defence, the Forex exercise may not have led to prosecutions but neither did it bring the mammoth costs and subsequent high-profile embarrassment that debacles such as Imperial Consolidated and Tchenguiz did. This was possibly because they took a more considered approach rather than blundering in, all guns blazing.

Judgement

If that change in tactic is down to David Green, it is to be commended. Speaking for a firm that has regular dealings with Mr Green’s agency on many major cases, I can honestly say that it is in their interest and ours to have an SFO that thinks first and acts second. As an example, it took many years for the SFO to bring its first Bribery Act prosecution, which was a success. An over-eager, more gung-ho approach to secure a quicker Bribery Act conviction would, I believe, have been less likely to succeed.

The CPS has made considered suggestions about the way that the SFO should be run. These could bring improvements in its day-to-day performance and funding and staffing arrangements. But, as I have alluded to here, the most important resource the SFO has is the judgement of those at the top: if that is shrewd then the SFO will succeed, if it is flawed then further embarrassment could follow.


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