Aziz Rahman, of award-winning solicitors Rahman Ravelli, considers the implications for business of a rejuvenated Serious Fraud Office.
There is plenty of talk in the legal world about change at the top of the Serious Fraud Office. But it is an issue that has equally important implications for business.
Whoever takes over from David Green as Director will have their own priorities and strong views on how things should be done. We could see, for example, the widely-tipped American candidate Lisa Osofsky taking the role.
Some commentators believe that could mean the SFO adopting a “doing a deal’’ culture, where companies are increasingly given the chance to avoid prosecution for their wrongdoing by meeting certain conditions. With deferred prosecution agreements (DPA’s) now in place in the UK legal system, the SFO does now have more scope to forego a prosecution on condition that a company takes certain actions.
Whoever does take on the top job at the SFO, they are taking it at a time when the organisation has just had its core budget increased. Pre-election plans to abolish the SFO have also been quietly dropped. So it seems that the SFO will be policing business – and with a bigger budget – for the foreseeable future.
This will almost certainly mean that the SFO will be out to prove its effectiveness – both to its new boss and the Treasury, which has sanctioned the increased budget.
Robust defence has always been vital when facing SFO allegations. But shrewd negotiating skills and an ability to look at “the bigger picture’’ are equally as important.
If you do come under the scrutiny of the SFO, you need to know about its investigation process and how to manage your defence. The SFO uses teams of skilled experts investigating and, where necessary, using its powers to compel an individual or organisation to provide it with information it believes is relevant to its investigation. It has its own unique range of powers. Now it has secured extra budget resources. But that does not mean that it cannot be successfully challenged.
A defence lawyer with business crime expertise has the opportunity to make representations and arguments to challenge SFO allegations. These could, if they are successful, make the SFO doubt the strength of its case. This can lead to the SFO deciding to end an investigation without charges being brought.
But the chances of this are highest if such legal help is sought at the earliest opportunity. Such help can, for example, see legal challenges made to the obtaining of search warrants and the way any searches are conducted. The right legal argument can often lead to a warrant being quashed and any seized material returned.
The SFO can also be challenged over the reliability of information and material it intends to use as evidence. Section 21 of the Police and Criminal Evidence Act (PACE) gives people access to any material of theirs that has been seized by the SFO, while the Attorney General’s Guidance on Disclosure (December 2013) laid down guidelines on dealing with the seizure and search of digital material. Both are measures created to prevent anyone under investigation being disadvantaged.
But while legal challenges can be crucial, the art of negotiation should not be overlooked. This could be increasingly important if the new person at the top of the SFO turns out to be someone who would rather “do a deal’’ in many cases than go all the way to trial.
But it must be remembered that such negotiation with the SFO is only worthwhile if you know what – if any - wrongdoing has been committed by the company or people working for it. So any suspicions of wrongdoing must be investigated immediately by someone who knows how to follow the evidence trail.
By doing this, you can establish the true situation and make representations to the SFO. If you are admitting to wrongdoing, this could lead to the SFO choosing negotiation over prosecution. The SFO is like any other law enforcement organisation – it has a backlog of cases it would like to clear. DPA’s are a way it can achieve this.
DPA’s can involve a company having conditions imposed on it, such as changing working practices, removing certain staff, paying fines or introducing measures to prevent any repeat of the criminal behaviour. Under a DPA, if the company meets these conditions for an agreed period of time, it is not prosecuted. But it is prosecuted if it fails to meet them.
Negotiating skills are important when seeking a DPA and, if that is successful, in agreeing the terms of it. As the SFO starts out under new leadership and a bigger core budget, it is more important than ever that those in business know how to respond to it.
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