The Serious Fraud Office has come in for strong criticism from the High Court over its conduct regarding the build up to its second deferred prosecution agreement (DPA), despite successfully defending a judicial review (JR) application.
In R (AL) v Serious Fraud Office the Administrative Court rejected an application regarding the office’s decision not to demand full notes from lawyers’ interviews with ex-employees at XYZ – the company with whom the DPA was agreed.
In his judgment yesterday, Mr Justice Green said the court had ‘real reservations’ as to the position adopted by the SFO, which he said had ‘failed to address relevant considerations; taken into account irrelevant matters; provided inconsistent and inadequate reasons for its decisions; and, applied an incorrect approach to the law’.
However, the JR application failed because, according to Green, adequate alternatives are open to both parties in the Crown Court.
The DPA with XYZ, the SFO’s second such agreement at the time, was finalised in 2016. It resulted in the company, which has not been named due to ongoing legal proceedings, paying a £6.5m fine.
In preparation for the SFO’s investigation XYZ instructed external lawyers to conduct interviews with four senior executives suspected of wrongdoing. The interviews were not recorded but the lawyers took detailed notes.
The SFO unsuccessfully sought the notes but XYZ refused asserting legal privilege. The SFO disagreed that privilege applied.
Eventually, XYZ allowed the SFO to record a summary of the interviews and then transcribed them.
One of the defendants (the claimant in this JR) then applied to the Crown Court for an order requiring the SFO to demand the full interview notes from XYZ. The court refused – prompting the application for a JR.
The SFO claimed that there was no need to procure the full interview notes because XYZ’s privilege claims were ‘not obviously wrong’ and the SFO was satisfied that there was nothing in the full interview notes that was not adequately captured in the summaries which had already been disclosed. It added that there are remedies available in the Crown Court and that, as a JR is a remedy of last resort, it should be refused.
Jessica Parker, partner at criminal defence law firm Corker Binning, said the SFO’s decision not to require XYZ to provide copies of the notes of its lawyer’s interviews 'will be a surprise to those who have listened to [SFO director] David Green’s speeches.’
Parker said: 'Those speeches also claim that privilege is 'often claimed, dubiously, over accounts given by witnesses in internal investigations'.
She added: ‘The DPA regime is still relatively new and to date, despite the handful of high profile corporate fines, the SFO has not secured the conviction of any individual defendants involved in the conduct complained of. This case indicates that the SFO is yet to find its feet. The new permanent director, whoever that may be, has a substantial task ahead of him or her.’
An SFO spokesperson said: 'We are studying the judgment carefully and considering our next steps in this case. We will certainly seek to ensure that our future approach to such matters reflects the court’s findings and observations. We cannot comment further at this time, as proceedings are live.'
The SFO is currently embroiled in another privilege dispute with mining company the Eurasian Natural Resources Corporation. That dispute, in which The Law Society is intervening, is set to go to the Court of Appeal in the summer.