Today’s Supreme Court ruling on the Serious Fraud Office’s extra-territorial powers will force the agency to rethink its investigations and could cast doubt over foreign documents that companies have already provided, lawyers have said.
In a judgment handed down this morning, the Supreme Court unanimously ruled that the SFO cannot demand documents held outside the UK by a foreign company under the Criminal Justice Act 1987. It found that there was no basis for the divisional court’s finding that the SFO was entitled to such material if there was a sufficient connection between the company and the UK.
Richard Kovalevsky QC, head of criminal defence at Cohen & Gresser’s London office and QC for the appellant, said the judgment has broad implications for all foreign entities under investigation by the SFO.
‘This historic decision significantly alters how the SFO can conduct extraterritorial investigations and protects foreign entities from being forced to comply with far-reaching and unlawful demands for the production of documents and electronic materials under the threat of criminal charges,’ he said.
Cohen & Gresser said the ruling also calls into question the status of all foreign documents previously obtained by the SFO under a section 2(3) notice.
Kingsley Napley criminal litigation partner Alun Milford said the ruling would be ‘disappointing’ for the SFO, as almost all of its cases involve overseas evidence gathering and it no longer has access to European Investigation Orders following Brexit.
‘States do not generally welcome the use by other states of extraterritorial powers within their borders, so a judgment in the SFO’s favour was never going to spell the end of conventional mutual legal assistance in its cases. It simply has to double down now on making those mechanisms work,’ Milford said.
Some lawyers have suggested that the Criminal Justice Act 1987 is outdated given the number of multinationals now under investigation. Andrew Smith, partner at Corker Binning, said: ‘The 1987 statute which created the SFO’s powers may be ill-suited to modern age, when the SFO frequently investigates multinationals holding relevant documents overseas.
‘But it is not the role of the courts to rewrite statutes merely to further the public interest in investigating crime. It will now be for parliament to decide whether the statutes, which date from over 30 years ago, can or should be updated.’
The appellant, US engineering conglomerate KBR Inc, was represented by Lord Pannick QC, Richard Kovalevsky QC and Jamas Hodivala QC, instructed by Greenberg Traurig LLP. The SFO was represented by Sir James Eadie QC, Jonathan Hall QC and Simon Pritchard, instructed by the Government Legal Department.