Earlier this year, a committee of the UK House of Lords criticized the UK Serious Fraud Office (SFO) and Crown Prosecution Service (CPS) for the slow pace of its investigations, noting also that “the evidence we have received suggests that there are excessive delays even in the majority of more straightforward domestic bribery investigations”. The Committee implored the SFO and CPS to do “everything in their power” to ensure cases progress as quickly as possible. The HM Crown Prosecution Service Inspectorate (HMCPSI) recently picked up on this issue again, noting that the SFO has at times struggled to appropriately staff cases and process digital materials.
An SFO investigation can take several years to complete (with periods in excess of 3 years not being unusual), with long periods of time where the subject under investigation receives no updates and is in a period of legal limbo. This says nothing of the immense stress that an investigation can cause and the disruption to daily life including damaged reputations, restrictions on travel and restricted access to assets.
Figures recently published by the UK Ministry of Justice (MOJ) show that the slow pace of investigations by the SFO and CPS also infects other UK law enforcement agencies. Figures for the first quarter of 2019 showed that a contested Financial Conduct Authority (FCA) case took almost six years to reach a resolution.
The complexity and seriousness of the cases, the terabytes of data for analysis and delays in scheduling court time are oft- cited reasons why investigations conducted by the SFO and FCA take so long to reach a conclusion. However, there are other factors which are within the control of law enforcement including the (sometimes tenuous) public interest in pursuing certain cases, the allocation of resources, and effective case management. Until these issues are dealt with head-on, there appears to be little prospect of enforcement cases being expedited.
Delays also raise the question as to whether the subject of an investigation can receive a fair hearing within a reasonable time frame as they are entitled to under article 6 of the European Convention of Human Rights. Delays present a real risk that legitimate interests are adversely affected; witness evidence becomes less reliable (if available at all); and the corporate memory of a firm changes over time.
So, what might we expect in the UK to address some of these criticisms and the risk that investigations infringe a subject’s right to a fair hearing?
SFO director Lisa Osofsky has suggested that a key factor to speed up investigations is to increase collaboration with other national and international enforcement agencies, which most likely (given Ms Osofsky’s background at the FBI) means the US agencies. The fight against fraud and corruption has increasingly become a transnational issue that can only be tackled by international authorities “linking arms”, as Ms. Osofsky has put it. Only last year’s Rolls Royce settlement was an example of a transnational achievement by UK, US and Brazilian authorities. In a recent speech, Sara Lawson, QC, General Counsel of the SFO suggested to speed up the investigations by choosing the “best pieces of evidence earlier on” and trying to “keep the (our) eye on the bigger picture”.
Similarly, the FCA has recognized that its enforcement metrics were “too static” and was looking to improve how efficiently it investigates matters to cut down the time between the opening of a probe and reaching a decision. In recent years, this has resulted in the FCA opening more investigations than ever in its history, but also closing more investigations than ever. Between March 2017 and March 2018, the FCA ended 208 probes – just under twice as many as the year before. Whilst the right outcome may ultimately be reached, therefore, we can expect to see more enforcement actions being opened, with the inherent cost, stress and management time associated with it.
But, one final thought. Perhaps with an increased acceptance that cases are taking too long to progress through the law enforcement process, we might see successful challenges to the SFO and FCA’s actions before the English Courts. Whilst typically unsuccessful, there may come a point where the enforcement process moves from slow to unacceptable.