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SFO faces fresh attempt at NCA merger

After failing in her attempts to overhaul the Serious Fraud Office (SFO) three years ago in the face of staunch opposition from the former attorney general, Dominic Grieve QC, and Justice Minister, Kenneth Clarke, Theresa May is now considering reviving her plans to dismantle the much maligned organisation. The SFO has received its fair share of bad publicity ranging from the ill-conceived Tchenguiz investigation to alleged secret payments to exit staff.

If Theresa May’s proposals are successful, the SFO would become a new economic crime unit within the National Crime Agency which has already taken over the role of the Serious Organised Crime Agency (SOCA). Following the recent cabinet reshuffle, the proposals could see less of a backlash from current parliamentary colleagues. The announcement, however, is likely to cause a stir amongst lawyers.

Many see the SFO’s strength as its ability to pool investigators and prosecutors under one roof, thus facilitating the efficient investigation of complex matters. Although the SFO has apparently floundered in recent years, it has gained confidence under the stewardship of David Green and is now working with a real sense of purpose. This has been evident from its recent investigation of GSK’s activities in foreign jurisdictions under the Bribery Act and its prosecution of individuals caught up in the Libor scandal.

Experienced advocates for the current status quo come from those knowledgeable in this field, who have regular dealings with both the SFO and NCA. An often expressed view is that any merger will dilute the SFO’s ability to prosecute serious financial crime. It could mean that investigations are conducted by those lacking the requisite experience in dealing with serious, lengthy and complicated frauds. The concern is that a merger would only serve to disrupt an organisation with a proven track record, specifically designed to undertake such investigations. The SFO’s remit of dealing exclusively with investigations and prosecutions of serious or complex fraud, bribery and corruption, with a minimum threshold of seriousness and public interest, places it in a unique position. It is able to adopt a multi-disciplinary approach and the use of its specific legislative powers under s2 Criminal Justice Act 1987 gives it extra teeth in the fight against serious white collar crime. It is acknowledged by all that the investigation and prosecution of this type of criminal activity requires an expertise in civil, criminal, regulatory and company law. Only the SFO which has been at forefront of the arena has that understanding.

Against this backdrop one possible argument for subsuming the SFO within the NCA would be that it might help inject some life into the prosecution of serious fraud cases. The number of such cases has escalated with the development of technology and ever more sophisticated ways of committing complex financial crime. Theresa May’s proposals could result in these crimes being given the attention they deserve through an increase in personnel and funding, something with which the SFO struggles as reflected in its numerous requests for ‘block-buster funding’. If that is the case the authors will be pleasantly surprised!

This article was published in The Times on 9 October 2014. Click here to read the original article.

For more information, please contact:

Anil Rajani
T. 020 7227 6745


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