The collapse of the SFO’s case against Dahdahleh represents a low point in a bad year for the SFO.
By Barry Vitou, partner, Pinsent Masons
The continuing fall-out from the botched Tchenguiz investigation, lost Serious Fraud Office (SFO) documents relating to the BAE Systems investigation found in a cannabis warehouse in East London and now the Dahdahleh case all put the SFO in the headlines for the wrong reasons.
The UK needs a strong investigator of serious fraud. The new director is doing his best to fix the SFO with limited resources. Some will be asking themselves the question – will the bad news ever stop?
Media headlines and politicians have already begun pointing the finger at the SFO. But this is too easy and the stuff of the populist soundbite. While reputational damage has already been done, it is too early to know if the SFO should bear any responsibility for this collapse and if so to what extent. While David Green the SFO Director is reported to have launched a full review into the circumstances surrounding the collapse of the case there are some things we know already.
According to the SFO a key witness, who had already pleaded guilty, changed his story. This risk always exists. David Green has repeatedly made the point that because of the very nature of its work SFO cases are high stakes and there is always the prospect of losing a case.
Put another way, you win some, you lose some. This is all part and parcel of the rough and tumble of litigation. Likewise, we are told that the defence was challenging certain evidence before the court the prosecution was seeking to reply on. In its statement to the court the SFO said: “…The defence have raised issues questioning Akin Gump’s role in the provision of assistance to the Serious Fraud Office both as to what their motives may have been in the dissemination of material and assistance as to witnesses who could provide relevant information, this in the context, as accepted by the defence, of the Serious Fraud Office acting in good faith…”
The SFO will always need to rely on evidence from others in order to bring cases and those parties may have a variety of motives for supplying it to them. Obviously, a prosecutor must be prepared for the attack.
There should be scrutiny of the newly imposed quality assurance processes at the SFO to see if there was anything more the SFO could have done to prevent or cater for what happened.
More broadly though, the UK needs to have a serious debate about the investigation of serious fraud. This needs to start with how much it costs which is, in spite of claims to the contrary, more than the SFO budget.
The case for being serious about serious fraud is straightforward. People will not take seriously the threat of prosecution if the UK is not serious about it. A lack of a credible deterrent leaves UK companies who comply with criminal laws at a competitive disadvantage to businesses who flout them in the UK and elsewhere.
The jury remains out on where the blame should lie in the Dahdahleh case but the bigger question of how serious the UK wants to be about prosecuting serious economic crime remains. It’s all about the money.