Putting the US criticism of the SFO into perspective

Today’s Sunday Times has published a scathing indictment of the Serious Fraud Office. No doubt, much of its content is true. The SFO is no different in its cultural make-up from any other UK agency of financial crime control, the ‘Good Chaps Syndrome’ has always been of paramount importance to civil servants, regardless of whether they could do the job for which they were hired or not!

However, there is another side to the story. Ms de Grazia was granted open season on the SFO when the Government wanted to find reasons for justifying getting rid of Rob Wardle, its Director, after the Saudi Arms corruption debacle. Her report gave them that justification, a bit like a self-fulfilling prophecy. The following article was published by me in ‘The Company Lawyer’ in 2008.

A recent report published by former senior New York City prosecutor Jessica de Grazia, has been variously described as a source of major criticism of the UK’s Serious Fraud Office (SFO). The Office has been generally criticized for its

‘…low conviction rates, its lack of focus of its investigations and the employment of lawyers who lack the necessary skills to increase their convictions rates…’

The report is a highly critical examination of the SFO, and many of the observations made would be indeed a serious indictment of the Office and its culture, but for the fact that the author of the report betrays a lack of understanding of the significant differences which exist between the law enforcement process in England and Wales, and that which pertains in the USA.

Ms de Grazia writes her report, perhaps not surprisingly, from the point of view of a New York prosecutor, but without factoring in the features which, though apparently small, and to the uninformed outsider, possibly insignificant, make such a difference to the way in which crime, and in particular, serious fraud, is prosecuted in this country.

She talks very firmly about ‘skills shortages’ in prosecutors’ offices. She states;

‘…This skills shortage is a by-product of the “immaturity” of the independent prosecution agencies…’

The concept of an ‘independent prosecuting agency’ is a very new element in English criminal jurisprudence. In the UK, it has always been, and still is, the tradition that prosecutors are very largely called from among the ordinary ranks of the men and women who make up the English Criminal Bar.

The US prosecutor’s office however has been traditionally staffed by men and women of very different class and social background. For a poor boy from the ‘wrong side of the tracks’ who had nevertheless done well in Law School, despite having to work his way through college, a period spent in the local prosecutor’s office was a very good grounding for a successful career move. Coupled with the fact that in America, crime and crime prosecution possessed significant political ramifications, an aggressive prosecutor who was seen to be good at ‘getting his man’, and who kept up his conviction rate, was a man who would later rise in the political hierarchy and could achieve high office of State. (Rudolph Giuliani is a classic example).

Much of what Ms de Grazia advocates about the role of prosecutors would not be acceptable to the English legal profession. In the US, prosecutors have very hands-on relationships with major witnesses, coaching them on their evidence and engaging with them for lengthy pre-evidentiary discussions. An independent English barrister would find that kind of relationship with a witness far too close for professional comfort.

In addition, the USA has very draconian sentencing powers contained within both their Federal and State Sentencing Guidelines. These predicate the fact that a very large percentage of defendants will plead guilty to selected charges at a pre-trial, plea-negotiation session, where the prosecutor makes a ‘proffer’ of the sort of sentence they might be willing to ask for if the defendant waives his rights to a full trial by jury and enters a negotiated plea at an early stage. In view of the fact that many defendants are facing the likelihood of serving significant periods of imprisonment if they ‘roll the dice’ and go for a full jury trial, at which they are convicted, many defendants seek the line of least resistance and ‘plea down’ their indictments.

Nevertheless, Ms de Grazia does identify some serious and proper criticisms of the SFO culture. She observes that the relationship between lawyers and police detectives is poor and could do with significant improvement. This is not a new identification and could be said to have bedeviled the working relationships between lawyers and investigators from the first days of the agency. She talks about the absence of constraints upon defence practitioners to shorten preparation times and to agree pre-trial, significant bundles of documents which could be dispensed with in court, and which lead to unwieldy trials and lengthy and complex pre-trial arguments.

There are significant differences between the US agencies and the SFO in dealing with complex and serious fraud trials. However, until such time as the English legal system is willing to contemplate a root and branch reform of the way in which it views criminal fraud (because at the moment it is largely ignored by most policing agencies around the country); provides the necessary degree of professionalism and money to meet its challenges and recruits staff with the relevant degree of skill and knowledge to cope with the issues identified by professional fraudsters; and is willing to consider introducing some form of pre-trial plea-negotiation process, we shall continue to suffer from the same problems which have so be-devilled us in the past.

This is going to mean encouraging the Judiciary to be willing to permit professional prosecutors to make similar ‘proffers’ to defendants, before the court procedure commences. As in the US, the Judge should have the right to review the quantum of the ‘proffer’ and to decide whether he thinks it is appropriate for the charges anticipated. As in the US, the Judge should have the right to refuse to accept the ‘proffer’ as being inadequate to meet the mischief alleged and to refer the matter back to the prosecutor for reconsideration. Whatever the outcome of the Attorney General’s consultation on this issue, much will depend however upon the willingness of the Judiciary to accept the principal of plea negotiation in the first place, and therein lies the question!

The report is a catalyst for debate, undoubtedly, but it suffers from too great a degree of one-sidedness and a failure to understand the English prosecutorial approach towards crime in general. It asserts, as articles of US faith, concepts which simply do not exist in English law. In its assertiveness, lies its flaw, but we should not ignore its findings, we must try to see how they could be adapted to an English model.