The Serious Fraud Office (SFO) will not have to pick up the legal bill for former defendants in its collapsed London Mining case, after a judge yesterday rejected claims that the agency should pay up because of alleged misconduct in its handling of the probe.
This ruling will come as a big relief for the SFO as it comes under uncomfortable scrutiny for its handling of this international corruption investigation. But this is not the time for the SFO to shy away from answering difficult questions – it offers an important opportunity to learn how it can strengthen its approach to securing crucial intelligence and expert evidence in corporate corruption cases.
A collapsed prosecution leaves unanswered questions
After a long-running probe, the SFO brought charges in 2023 against two former executives and a consultant of London Mining Plc for conspiring to make corrupt payments to a public official in Sierra Leone with the aim of securing favourable iron ore mining deals. The London-listed miner went bust after withdrawing from the troubled Marmpa Mine in the west African country.
But the case collapsed earlier this year after the SFO told the court it had found almost 600,000 items of evidence had been missed when using its old e-discovery software. This triggered a major review of disclosure in 20 of its cases, adding to the string of disclosure failures that have been the downfall of major SFO cases in recent years.
Turning the tables on the SFO
The fallout from the collapsed prosecution has seen the defence make explosive allegations against the SFO about its handling of the probe. Lawyers for the defence have claimed the “vague” reasons given by the agency for dropping the case mask a more troubling picture of how they conducted the investigation.
In allegations that question the anti-corruption agency’s integrity, the defence claimed that improper payments were made to public officials in Sierra Leone as part of a “strategy to outsource the investigation” to external researchers instead of using formal diplomatic channels. One of the defendants argued in written submissions that the individuals who had made these payments had misrepresented the purpose of the material as being for academic research. They also claimed the SFO induced a key witness – who was a business partner and lawyer to one of the defendants – to breach confidentiality in sharing information, pointing out that it was only because of him spilling the beans that the investigation got off the ground.
The court denies defence costs and upholds transparency
But rejecting this defence application for costs yesterday, the judge at Southwark Crown Court ruled that he could not penalise the SFO simply “because I didn’t like the smell of something they’re doing”. Observing he had limited power to order the SFO to disclose evidence once the case had been closed, the judge decided that he was not in a position to resolve the allegations made about the agency’s conduct.
However, the judge did not agree with the SFO that those on the receiving end of the defence’s damning allegations should be anonymised. This ruling in favour of transparency followed a joint submission by Spotlight on Corruption and five media partners opposing the SFO’s application for reporting restrictions to conceal the identities of individuals involved in the investigation.
The decision is a welcome affirmation that the constitutional principle of open justice – which is essential for upholding public confidence in our justice system – cannot simply be put to one side because allegations made in a public court hearing may cause reputational harm.
An opportunity to learn lessons rather than double down
Facing fierce allegations of misconduct in a complex corruption investigation will no doubt be triggering for the SFO, given its bruising experiences in Unaoil and ENRC. Given these allegations are also untested, it will be tempting to shy away from the uncomfortable questions left hanging in the air after the defence’s failed application for costs.
These include important questions about the SFO’s approach to securing evidence from key witnesses, particularly as the agency looks to increasingly leverage corporate insiders such as whistleblowers or assisting offenders under the Serious Organised Crime and Police Act 2005. There are also questions about the agency’s use of external researchers and expert witnesses – often crucial in foreign bribery cases to ensure the court and the jury have a sound understanding of local laws and practices.
Yet rather than doubling down in defence of its conduct, the SFO should look to use the setbacks and uncomfortable scrutiny of its London Mining case to learn important lessons that will strengthen its strategy and processes as a specialist investigator and prosecutor of complex corporate corruption.
