More than two-thirds of legal professionals who specialise in white collar crime don’t believe the Serious Fraud Office’s (SFO) conviction rate will improve over the next 12 months. That’s according to an in-depth survey of white collar crime lawyers recently conducted by business crime solicitors Rahman Ravelli.
Rahman Ravelli’s founder and senior partner Aziz Rahman said the lack of belief that the SFO will boost its conviction rate is understandable. “There are clearly many who see little prospect of the SFO improving its conviction rate, and there are arguably a number of reasons for this. With deferred prosecution agreements (DPAs) available as an alternative to prosecution, there’s always the danger that a conviction will never be a possibility in a number of cases. The SFO is dealing with very complex cases where it can often be difficult to obtain conviction.’’
Rahman continued: “Since Lisa Osofsky arrived at the SFO, she has put a lot of time and energy into going through the existing caseload and making changes to the way in which the SFO works. Those changes have not – for the time being, at least – brought the hoped-for rewards.’’
The survey also finds less than a third of those questioned feel that Lisa Osofsky’s first year in charge has been a success. In that year, the SFO failed to convict three senior Tesco executives in the wake of the accounting scandal that saw the company obtain a DPA and avoid prosecution.
The SFO also failed to secure convictions against three individuals at steel design and manufacturing company Sarclad which, in obtaining a DPA from the SFO, had admitted corruption and a failure to prevent bribery.
Convictions against individuals
The Rahman Ravelli survey asked if there was confidence that the SFO could secure convictions against individuals once – as was the case with Tesco and Sarclad – DPAs had been reached between the SFO and the company concerned. Almost three-quarters of those asked said they didn’t believe the SFO could achieve this.
Aziz Rahman stated: “When it comes to Tesco and Sarclad, the original investigations were conducted – and the decisions to offer DPAs and prosecute individuals were made – long before Lisa Osofksy had even been appointed. However, the outcomes in both of these cases appear to have created a belief that the SFO cannot secure convictions once a DPA has been offered. That’s a far from positive view of an agency that has to balance the merits of a DPA against a possible prosecution and consider both corporate and individual liability.’’
The survey also revealed that less than a quarter of those questioned had found the SFO’s recently-published guidance on corporate co-operation useful. On that note, Rahman observed: “The guidance on corporate co-operation was only issued in August, but it’s yet another indicator that the SFO has much to do to convince many in the legal profession of its effectiveness. Tesco and Sarclad were failures for it. There have been accusations that the SFO lost its nerve when it dropped the investigations into Rolls-Royce individuals and GSK earlier this year, while Lisa Osofsky’s first year in charge has not seen many cases coming to trial.’’
Rahman continued: “Osofsky has been talking recently of using covert surveillance. This could, in theory, be of use, but it’s an approach that’s fraught with legal and practical difficulties. Added to this, Her Majesty’s Crown Prosecution Inspectorate has recently raised concerns about SFO cases being hampered by the time it takes to process digital material. We’re also yet to see the use of participating witnesses, which is something Lisa Osofsky has championed. Our survey shows a perception of the SFO that’s far from favourable. The challenge for the SFO is to change those perceptions. It’s a challenge that could prove to be far from easy.’’
“Waste of money”
Comments made by those surveyed included references to certain SFO cases being “disastrous” and a “waste of money”. Others have moved to criticise DPAs for being nothing more than a vehicle for big corporations to effectively pay their way out of trouble.
Some of those surveyed do have faith in the SFO’s ability to investigate and prosecute. One respondent said: “We want the SFO to continue to take on difficult cases. They’re the ones where convictions are harder to obtain. We don’t want the SFO to stop trying or to be scared of difficult cases and instead just go for the low hanging fruit. The SFO has a very difficult job. The organisation just needs to manage itself well and continue to have adequate resources in place. It’s far harder to bring a complex fraud case than it is to defend one.”
Another respondent to the Rahman Ravelli survey added: “Lisa Osofsky appears to have been an invigorating force within the SFO. Her modern approach tempered with common sense is already evident. I have no doubt that she will improve the SFO’s conviction rate as the agency puts itself back on track.”