The Crown Prosecution Service: Gatekeeper of the Criminal Justice System - Justice Committee Contents


Memorandum submitted by the Serious Fraud Office

JUSTICE SELECT COMMITTEE INQUIRY INTO THE WORK OF THE CROWN PROSECUTION SERVICE: The Serious Fraud Office: A Comparative Model

1.  INTRODUCTION

  1.1  The Serious Fraud Office (SFO) is an independent Government Department that investigates and prosecutes serious and complex fraud. The SFO, like the CPS, is an independent prosecutor, accountable to the Attorney General, who in turn is responsible to Parliament. Whilst the SFO shares the same prosecutorial duties and responsibilities as the CPS, its functions differ from the CPS crucially in four main aspects:

    —  Its scope, specialising solely in serious and complex fraud.

    —  Unlike the CPS, the SFO role is not limited to prosecutions: in effect the SFO can guide investigations.

    —  The integration of Investigators, Prosecutors and Accountants significantly enhances the skills required to perform complex serious fraud investigations and prosecutions well.

    —  The integration of professionals besides lawyers allows the SFO to proactively and collectively respond to serious fraud investigations in all types of business activity.

2.  THE ROLE OF THE SFO WITHIN THE CRIMINAL JUSTICE SYSTEM

2.1  History and Nature of the SFO: Section 1(1) of the Criminal Justice Act 1987

  The SFO, created under section 1(1) of the Criminal Justice Act 1987, is headed by a Director, who is appointed by and accountable to the Attorney General. The SFO was established following the recommendation in Fraud Trials and Committees Report (the "Roskill" report) published in 1986, where the need for a specialist, unified agency to detect, investigate and prosecute offences of serious fraud was identified. Since its inception, new agencies with investigative and prosecutorial powers in the field of commercial crime have emerged. The Office of Fair Trading (OFT) and the Financial Services Authority (FSA) target specific financial offences and also exercise regulatory powers. The CPS also prosecutes fraud offences. The main difference between these and the SFO's functions is as follows:

    —  The SFO's wide remit in the investigation and prosecution of serious fraud cases;

    —  The SFO's use of a variety of professionals integrated within the organisation to concentrate on frauds that require in-depth and thorough analysis.

2.2  SFO's Powers of Investigation Section 2: Criminal Justice Act 1987

  Section 2 of the Criminal Justice Act 1987 (CJA 1987) confers the power to require a person to answer questions, provide information or produce documents in the course of the investigation. This power, until recently, applied uniquely to the SFO, namely the Director or staff authorised by the Director. Section 2 notices are not confined to an individual suspect or suspects of an investigation but also apply to banks, financial institutions, accountants and other agents or professionals who may in the course of their business hold documents or information relevant to a suspected fraud.

  Section 2 powers may only be used for the purposes of an investigation of a suspected offence which appears on reasonable grounds to the Director to involve serious or complex fraud and where there is good reason to do so for the purpose of investigating the affairs (or any aspect of the affairs) of any person.

  The CPS and the Revenue and Customs Prosecution Office (RCPO)[15] now have equivalent investigatory powers under the Serious Organised Crime and Police Act 2005 (SOCPA 2005). Sections 60-70 of SOCPA replicate the powers set out in section 2 of the 1987 Act but only apply to the following limited categories of offences:

    —  "lifestyle" offences under the Proceeds of Crime Act 2002 in England and Scotland;

    —  sections 15-18 of the Terrorism Act 2000;

    —  section 170 of the Customs and Excise Management Act 1979 and section 72 of the Value Added Tax Act 1994;

    —  section 17 of the Theft Act 1968 (false accounting) or any offence at common law of cheating in relation to the public revenue, which is a qualifying offence;

    —  section 1 of the Criminal Attempts Act 1981 or offence in Scotland at common law of attempting to commit any offence specified in the Act; and

    —  section 1 of the Criminal Law Act 1977, or in Scotland at common law, of conspiracy to commit any offence specified in the Act.

  The SFO's investigative powers under section 2 apply to all SFO offences. Further, Section 59 of the Criminal Justice and Immigration Act 2008 which came into effect on 14th July 2008 extends the SFO's powers under section 2 of the CJA 1987 to include the pre-investigative stage for offences relating to bribery and overseas corruption. There is no equivalent extending provision in respect of CPS and RCPO offences under the 2008 Act.

2.3  The SFO's Relationship with other Prosecution Agencies

  The SFO liaises with all relevant Departments including the other Law Officers Departments, the Serious Organised Crime Agency (SOCA), the Office of Fair Trading (OFT) and the Financial Services Authority (FSA) to consider and determine (policy) issues of related interest, such as Disclosure, Policy for the prosecution of companies and management of very high cost cases. This is in recognition of the need for a cross-cutting approach to address financial crime.

3.1  Review and Transformation/Conclusion

  The De Grazia Report, published in June 2008, highlighted a number of areas for review in SFO working methodology and practices. The SFO has welcomed this analysis against USA comparators. The organisation is currently undertaking a high level strategic review. This will improve its operational delivery and develop an investigation and prosecution agency that is proactive, forward thinking and conducive to excellence.

Kathleen Harris

December 2008







15   Section 60(1) confers the power to give disclosure notices on the Director of Public Prosecutions, the Director of the Revenue and Customs Prosecutions and the Lord Advocate. This power may be delegated to a prosecutor from the corresponding prosecution agency, the CPS, the RCPO and Prosecutor Fiscal. Back


 
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