21.07.2022
A third conviction in the Unaoil case was overturned on a grim day for the Serious Fraud Office (SFO), when two reports were also published scrutinising failures that led to the collapse of the Unaoil and Serco cases.
Stephen Whiteley, a former manager at the oil and gas consulting company Unaoil, is now the third individual prosecuted in the Unaoil bribery scandal to see his conviction overturned. The Court of Appeal today confirmed that serious disclosure failings by the SFO meant Whiteley, like his co-defendants Ziad Akle and Paul Bond, did not receive a fair trial.
These failures are the focus of a report released today by the Attorney-General following an independent review undertaken by Sir David Calvert-Smith QC. The report concludes there were very serious failings at the top of the SFO, including use of personal mobiles for sensitive business, failure to record meetings and the sidelining of the SFO’s legal counsel as well as the case team.
Persistent disclosure failings have underpinned the SFO’s recent spate of collapsed trials, including the Serco prosecution, the subject of another review by Brian Altman QC that was published today. In this case, two senior managers at Serco charged with defrauding the Ministry of Justice were acquitted after the SFO failed to make adequate disclosure of documents to the defence.
Pointing to the combination of factors that caused the collapse of the Serco trial, Altman QC has recommended a range of reforms to strengthen the SFO’s disclosure capacity, including a significant boost in resourcing, training and investment in technology to ensure robust disclosure processes are followed.
The huge burden that disclosure places on prosecutors is a ticking time bomb that has to be grappled with urgently. The government needs to give serious attention to addressing the lack of proper resourcing, outdated technology, and poor management at the agency that has led to over-stretched case teams, poor quality assurance on cases, and disclosure failures.
One option to significantly increase resources at zero cost to the taxpayer is to establish an Economic Crime Fighting Fund, reinvesting money generated by the SFO and other economic crime fighting agencies through confiscation and forfeiture orders as well as fines back into the agencies. This should be on top of their core budgets and on a long-term sustainable basis, and not undercut victim compensation.
SFO annual report
The SFO’s annual report also published today, reveals 43 new cases have been opened with 130 remaining active, and a big uptick in confiscation orders. The report shows a big increase in the amount of money confiscated from criminals, from £7 million in 2020-2021 to £45 million in 2021-2022, a very welcome increase of 543%. These impressive figures show that the SFO brings in far more than it costs, and that the answer to the challenges identified in the two reviews released today lies in boosting the resources, capacity and ambition of the SFO.
Less impressive are the results on victim compensation, which went down from £200,000 to £136,000. Fraud and corruption, including that which occurs overseas, are far from victimless crimes – courts should be empowered and mandated to ensure the victims of corruption are represented and compensated. This should include a broader assessment of the harms of corruption which reflects not just the bribe paid and any direct financial loss but also the broader social damage of corruption on individuals and affected communities.
Ambitious thinking is also needed about building greater oversight and accountability at the SFO, not to the Attorney General who is a political appointee, but to an independent panel that can provide a robust challenge function.
In a welcome signal of its willingness to take these lessons on board, the SFO has committed to implementing the recommendations of both reviews as a “pressing priority” so that the agency can “move forward with clarity and confidence”.
It’s essential that the government supports the SFO’s renewed resolve by committing to a big funding increase (or at a minimum protecting it from threatened staff and funding cuts) to ensure the agency fulfils its potential as the UK’s leading enforcer of top-level corporate economic crime.
Sue Hawley, Executive Director at Spotlight on Corruption, said:
The SFO is ultimately too important to the UK’s ability to fight big ticket fraud and corruption to be allowed to fail. The recommendations from these reviews need to be implemented urgently. We need a huge re-investment of the money the SFO brings into the public purse through fines and confiscation back into the agency to beef it up and ensure these failings aren’t repeated.