10:55, May 18 260 0

2017-05-18 10:55:07
Future of SFO investigations in question amid Theresa May pledge

Theresa May’s pledge to scrap the Serious Fraud Office (SFO) has raised questions about the future of its current investigations.

The Prime Minister, who had targeted the SFO throughout her tenure as home secretary, revealed today plans to fold the body into the National Crime Agency (NCA) as part of the Conservative party manifesto.

“A lot of the existing casework I would expect to still be concluded,” a source close to one of the SFO’s big cases told The Lawyer. “The bigger question is what’s going to happen to the current investigations, which may begin at the SFO and end at the NCA.”

Another source claimed that if the shutdown is implemented, it will impact the uptake of future investigations and “dilute” the focus on white collar crime. “What it will mean is that this area will get less priority,” the source said.

The response from the legal community to this announcement has been overwhelmingly negative. Kingsley Napley head of criminal litigation Stephen Parkinson said: “This is a dreadful decision. The NCA does not have the capability or the expertise to investigate complex, serious fraud, nor, I suspect, the desire. This is a real step back from the UK’s commitment to tackle serious economic crime.”

Quinn Emanuel partner and former head of anti-corruption at the SFO Robert Amaee said: “Disbanding the SFO is a real backward step in the UK’s battle against corruption, destroying, at a stroke, the momentum that the SFO has built with its increasingly muscular approach and successful use of DPAs.

This move will split apart specialist investigators and prosecutors, something that was the cornerstone of Lord Roskill’s model which set up the SFO, and hands their work load to the already overburdened NCA and CPS.

The disbanding of the SFO has been a long standing goal of Theresa May, and it seems that now, with the outcome of the UK’s general election seemingly a foregone conclusion, she has grabbed her opportunity with both hands.”

The SFO released a statement that read: “This is a political pledge and we cannot comment. The organisation of law enforcement is a matter for ministers.”

The SFO is among several other agencies that are the subject of a current Cabinet Office review into the UK’s response to white-collar crime.

In the last few months, the SFO has secured high profile settlements from both Tesco (for £129m) and Rolls Royce (for £670m). It is also involved in a high-profile investigation and dispute with Eurasian Natural Resources (ENRC), the latest iteration of which was a High Court decision on the legal privilege of documents between ENRC and former counsel Dechert.

Earlier this week, The Lawyer reported that the SFO started an investigation into oil giant Petrofac and its subsidiaries over claims its officers, employees and agents may have engaged in alleged bribery, corruption and money laundering.

But these high profile cases have not always gone according to plan. Last year, the SFO was ordered by the High Court to list documents it had inadvertently disclosed in the long-running £3bn Tchenguiz dispute.

Osborne Clarke head of business crime Jeremy Summers said: “At a time when the SFO is establishing a track record of success this can only be seen as a retrograde step. The investigation and prosecution of serious fraud requires significant expertise, and it is less than clear that the NCA will have that capability.”

Corker Binning partner David Corker said that the pledge was a “pity”. The NCA has not yet proved its effectiveness and there is a great danger that the fight against fraud would be compromised if the SFO’s work was absorbed into its broad remit,” he said.