New Serious Fraud Office director Lisa Osofsky is barely a month into her role. But on top of what is likely to be a lenghy ‘to do’ list she now has two important court rulings to digest.
In a widely-reported ruling in Direcrtor of the Serious Fraud Office v Eurasian Natural Resources Corporation (ENRC) the Court of Appeal this month rejected the SFO’s submission that documents prepared for ENRC’s own internal investigation should not be protected by privilege – thus reducing the scope of what the SFO can request from a company.
However, just a day later the High Court handed down another ruling – this time to the SFO’s benefit. In R (KBR Inc.) v SFO, the court said where there is a ‘sufficient connection’ to the UK, the SFO can compel the production of documents, even if they are held outside the jurisdiction.
The case centred around Kellogg Brown & Root Limited (KBR Ltd), a UK subsidiary of US engineering company KBR Inc. The company is being investigated by the SFO in connection with its links to Unaoil (also under SFO investigation).
In April last year, the SFO requested the production of 21 categories of documents but became concerned that the KBR was attempting to draw a distinction between documents that were held by its different subsidiaries in different jurisdictions. KBR sought judicial review of the SFO’s decision to request the documents but the court said that the documents could be requested from foreign companies provided they have a ‘sufficient connection’ with the UK.
Ross Dixon, corporate crime partner at Hickman & Rose solicitors, predicts that the ruling, which would extend the SFO’s powers to material kept overseas for the ‘first time’, will change how companies facing investigation engage with the SFO.
Ian Ryan, head of business crime and a partner at London firm Howard Kennedy, adds that it will be interesting to see how Osofsky proposes to deploy with this ‘very important power’.
However, Andrew Smith, partner at criminal defence firm Corker Binning, says the decision will not affect the stance likely to be adopted by a suspect who is seeking leniency from the SFO – which would produce overseas documents as a hallmark of its cooperation. He added that the decision may also mean that the government has less impetus to introduce the overseas production order – a law currently making its way through parliament in the Crime (Overseas) Production Orders Bill - which would have compelled overseas companies to produce electronic data.
Osofsky is about to finish her first month at the SFO and we are yet to get a sense of what directon she will move the office in. We will have to wait and see how these rulings will affect future decisions.