Serious Fraud Office rife with failure, says new report
28 March 2023
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IEA Research quoted in The Financial Times
28 March 2023
Housing and Planning
Despite investigating cases for up to a decade, the SFO often fails to successfully prosecute because of a litany of errors
The Serious Fraud Office has a history of unprofessional behaviour and spectacular prosecutorial failures. This is according to a new paper from the Institute of Economic Affairs on the body charged with investigating and prosecuting fraud, bribery and corruption.
The former Secretary of State for Justice, Robert Buckland KC MP, has described the report as a “timely contribution to the debate” and called for an “urgent and thorough examination of this issue in order to make sure that we stop repeating the mistakes of the past”.
On various occasions, the SFO has made serious allegations and dedicated significant taxpayer resources to investigations but then made fundamental errors and ultimately been forced to drop cases.
The SFO has failed to disclose potentially exculpatory evidence, mishandled documents, used unlawful search warrants, undertaken inadequate legal analysis, made spurious allegations, and, in one case, forged a letter.
The paper’s author, the IEA’s Director of Research Dr James Forder, finds that the organisation’s failures link to underlying cultural and institutional inadequacies. Forder calls for policymakers to consider institutional reform.
This ranges from legal changes – like replacing juries with expert tribunals in complex fraud cases – to abolishing the SFO and dividing its responsibilities among other government agencies.
James Forder, author of Fraud Focus and IEA Academic and Research Director, said:
“The effective control of serious fraud is an essential of being a global business centre, but in England and Wales this aspect of law enforcement is in crisis. The law and legal procedure have failed to keep pace with the growing complexity and scale of modern business. This requires serious and urgent attention.
“Furthermore, the Serious Fraud Office has, over a period of decades, fallen far below the standards that should be expected and required of it. A radical shake up is now urgent, and indeed it might be best simply to abolish the SFO and replace it with wholly new arrangements.”
The Rt Hon Sir Robert Buckland KBE KC MP for South Swindon and former Justice Secretary’s Foreword:
“…Speaking personally, I have not yet come to a firm conclusion as to what the future architecture of that framework should be but I am strongly of the view that both House of Parliament should take an urgent and thorough examination of this issue in order to make sure that we stop repeating the mistakes of the past.”
Paul Maynard, MP for Blackpool North and Cleveleys and former Justice Minister said:
“With so many cases calling into question the running of the SFO, this is a timely and insightful report into where we need to go from here to reflect Sir David Calvert-Smith’s findings and improve our approach to tackling serious fraud”.
ENDS
Notes to Editors
CONTACT: media@iea.org.uk / 07763 365520
You can read a copy of Fraud Focus here: https://iea.org.uk/wp-content/uploads/2023/03/DP120_Fraud-focus_web-2.pdf
The paper has been featured in The Times, The Financial Times, The Scottish Times, i news, Politico, and Legal Futures.
IEA spokespeople are available for live and pre-recorded broadcast
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
- Tackling serious fraud is crucial to upholding the rule of law, delivering justice to victims, and economic prosperity and development;
- The Serious Fraud Office is responsible for a series of expensive and high-profile failed prosecutions, unlawful prosecutions and breaches of the Civil Service code;
- The SFO’s long record of failure demonstrates the need for reform, which could include abolition and reallocating its powers to other government agencies.
- Former Justice Secretary the Rt Hon Sir Robert Buckland KBE KC MP calls for “urgent and thorough examination” to prevent repeating SFO’s past mistakes.
The Serious Fraud Office has a history of unprofessional behaviour and spectacular prosecutorial failures. This is according to a new paper from the Institute of Economic Affairs on the body charged with investigating and prosecuting fraud, bribery and corruption.
The former Secretary of State for Justice, Robert Buckland KC MP, has described the report as a “timely contribution to the debate” and called for an “urgent and thorough examination of this issue in order to make sure that we stop repeating the mistakes of the past”.
On various occasions, the SFO has made serious allegations and dedicated significant taxpayer resources to investigations but then made fundamental errors and ultimately been forced to drop cases.
The SFO has failed to disclose potentially exculpatory evidence, mishandled documents, used unlawful search warrants, undertaken inadequate legal analysis, made spurious allegations, and, in one case, forged a letter.
The paper’s author, the IEA’s Director of Research Dr James Forder, finds that the organisation’s failures link to underlying cultural and institutional inadequacies. Forder calls for policymakers to consider institutional reform.
This ranges from legal changes – like replacing juries with expert tribunals in complex fraud cases – to abolishing the SFO and dividing its responsibilities among other government agencies.
James Forder, author of Fraud Focus and IEA Academic and Research Director, said:
“The effective control of serious fraud is an essential of being a global business centre, but in England and Wales this aspect of law enforcement is in crisis. The law and legal procedure have failed to keep pace with the growing complexity and scale of modern business. This requires serious and urgent attention.
“Furthermore, the Serious Fraud Office has, over a period of decades, fallen far below the standards that should be expected and required of it. A radical shake up is now urgent, and indeed it might be best simply to abolish the SFO and replace it with wholly new arrangements.”
The Rt Hon Sir Robert Buckland KBE KC MP for South Swindon and former Justice Secretary’s Foreword:
“…Speaking personally, I have not yet come to a firm conclusion as to what the future architecture of that framework should be but I am strongly of the view that both House of Parliament should take an urgent and thorough examination of this issue in order to make sure that we stop repeating the mistakes of the past.”
Paul Maynard, MP for Blackpool North and Cleveleys and former Justice Minister said:
“With so many cases calling into question the running of the SFO, this is a timely and insightful report into where we need to go from here to reflect Sir David Calvert-Smith’s findings and improve our approach to tackling serious fraud”.
ENDS
Notes to Editors
CONTACT: media@iea.org.uk / 07763 365520
You can read a copy of Fraud Focus here: https://iea.org.uk/wp-content/uploads/2023/03/DP120_Fraud-focus_web-2.pdf
The paper has been featured in The Times, The Financial Times, The Scottish Times, i news, Politico, and Legal Futures.
IEA spokespeople are available for live and pre-recorded broadcast
- On 10th March 2023, the SFO’s case against three former G4S employees collapsed. Despite investigating the case for 10 years, the SFO failed to offer any evidence against the accused in court.
- In 2022, the High Court found that the SFO had induced ENRC’s own solicitor to breach his contractual duties to the mining company in what was described as “extraordinary” and “almost unimaginable” misconduct. SFO officers were found to have lied under oath and been motivated by “bad faith opportunism”. It now faces potentially £70m in damages.
- The report also scrutinises the SFO’s use of Deferred Prosecution Agreements (DPAs), which allow companies to avoid trial if they agree to cooperate with the government according to certain terms. This often effectively means that companies can avoid prosecution so long as they can pay tens of million in fines and legal fees.
- Since their introduction in 2013, there have not been any successful prosecutions of individuals relating to the nine cases in which corporate entities have been given DPAs. This suggests that they hinder the SFO’s ability to bring evidence against individuals involved in corporate fraud, raising further questions about their use.
- A 1992 investigation by the SFO of County NatWest ended with no successful prosecutions. This was because it was too complex for a jury to reach a fair verdict.
- In 1993, the SFO seemed to have learned from the County NatWest case when it presented a much leaner case against Roger Levitt. However, they overcorrected, with Levitt only being charged with one count and receiving a community service sentence, despite the SFO accusing his company of being ‘riddled with fraud, forgery, deception and down-right dishonesty’.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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