Two-thirds of legal professionals expect no rise in Serious Fraud Office conviction rate

More than two-thirds of legal professionals who specialise in white-collar crime do not believe the Serious Fraud Office’s conviction rate will improve over the next 12 months.

Rahman Ravelli’s founder and senior partner Aziz Rahman said the lack of belief that the SFO will boost its conviction rate was understandable.

He added: “There are clearly many who see little prospect of the SFO improving its conviction rate – and there are arguably a number of reasons for this.

“With deferred prosecution agreements (DPAs) available as an alternative to prosecution there is always the possibility that a conviction will never be a possibility in a number of cases. And the SFO is dealing with very complex cases; where it can often be difficult to obtain conviction.

“Since Lisa Osofsky arrived at the SFO she has put a lot of time and energy into going through the existing caseload and making changes to the way the SFO works. Those changes have not – for the time being at least – brought the hoped-for rewards.’’

The survey also found that less than a third of those questioned thought that Lisa Osofsky’s first year in charge had been a success.

In that year, the SFO failed to convict three senior Tesco executives in the wake of the accounting scandal that saw the company obtain a DPA and avoid prosecution. The SFO also failed to secure convictions against three individuals at steel design and manufacturing company Sarclad which, in obtaining a DPA from the SFO, had admitted corruption and failure to prevent bribery.

The Rahman Ravelli survey asked if there was confidence that the SFO could secure convictions against individuals once – as was the case with Tesco and Sarclad – DPAs had been reached between the SFO and the company concerned. Almost three quarters of those asked said they did not believe the SFO could achieve this.

Aziz Rahman said: “When it comes to Tesco and Sarclad, the original investigations were conducted -and the decisions to offer DPAs and prosecute individuals were made – long before Lisa Osofksy had even been appointed.

“But the outcomes in both of these cases appear to have created a belief that the SFO cannot secure convictions once a DPA has been offered. That is a far from positive view of an agency that has to balance the merits of a DPA against a possible prosecution and consider both corporate and individual liability.’’

The survey also revealed that less than a quarter of those questioned had found the SFO’s recently-published guidance on corporate co-operation useful.

Aziz Rahman added: “The guidance on corporate cooperation was only issued in August. But it is yet another indicator that the SFO has much to do to convince many in the legal profession of its effectiveness.

“Tesco and Sarclad were failures for it, there have been accusations that the SFO lost its nerve when it dropped the investigations into Rolls-Royce individuals and GSK earlier this year and Lisa Osofsky’s first year has not seen many cases coming to trial.

“She has been talking recently of using covert surveillance. This could, in theory, be of use but it is an approach that is fraught with legal and practical difficulties. Added to this, HM Crown Prosecution Inspectorate has recently raised concerns about SFO cases being hampered by the time it takes to process digital material. We are also yet to see the use of participating witnesses, which is something Lisa Osofsky has championed.

“Our survey shows a perception of the SFO that is far from favourable. The challenge for the SFO is to change those perceptions – and that could prove to be far from easy.’’

Comments made by those surveyed included references to certain SFO cases being disastrous and a waste of money. Others criticised DPAs for being nothing more than a way for big corporations to pay their way out of trouble.

But some of those surveyed did have faith in the SFO’s ability to investigate and prosecute.

One said: “We want the SFO to continue to take on difficult cases and they are the ones that are harder to obtain convictions on. We don’t want them to stop trying or to be scared of difficult cases and just go for low hanging fruit. They have a very difficult job – they just need to manage themselves well and continue to have adequate resources. It is far harder to bring a complex fraud case than it is to defend one.”

Another added: “Lisa Osofsky appears to have been an invigorating force within the SFO. Her modern approach tempered with common sense is already evident. I have no doubt that she will improve the SFO’s conviction rate as the agency gets back on track.”