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SFO criticised for numerous public law errors in failing to challenge company’s assertion of LPP while subject to Deferred Prosecution Agreement

R (AL) v Serious Fraud Office [2018] EWHC 856

Related Member(s):
Tim Owen QC
Related Practice Area(s):
Crime and Regulatory Law, Fraud, Financial and Business Crime
Court:

This claim for judicial review concerned novel issues concerning the extent to which the Serious Fraud Office (SFO), in fulfilling its disclosure obligations towards a defendant in criminal proceedings who had formerly been employed by a company which had self-reported wrong doing, is under a duty to obtain documents from that company in order to review them and disclose them if appropriate. In this case the SFO concluded a Deferred Prosecution Agreement (“DPA”) with the company under which, inter alia, the SFO prepared a draft indictment against the company but then, with the approval of the Crown Court, suspended that indictment.  One of the conditions in the DPA for the continued suspension of the indictment was that the company would afford total cooperation to the SFO in its efforts to investigate and proceed against employees of the company who, it is alleged, engaged in the criminal payment of commissions (bribes) to foreign agents to secure business for the company.

It was held that the High Court was not the appropriate forum in which a dispute about disclosure of this sort should be litigated. There were “adequate alternatives open to the Claimant (and indeed all the Defendants) in the Crown Court which should be sufficient to enable this issue to be resolved.  The issues arising however are novel; if in due course it transpired that the Crown Court did not have sufficient powers to determine this matter fairly then it is possible that the High Court would then decide that it was proper to exercise its jurisdiction in order to fill a procedural lacuna that otherwise risked giving rise to injustice.  However, that position has not yet been reached and, on our analysis, we think it unlikely that it would be”. Accordingly, the claim for judicial review was refused.

However, “in material respects we considered that the approach the SFO was adopting was flawed”, the Judgment addresses in detail the numerous errors of law committed by the SFO in its approach to its duty of disclosure.  Thus the Court observed that:

• the SFO was wrong in its assertion that it enjoyed a broad discretion to decide not to proceed against the company to compel the production of the first account material pursuant to the co-operation clause in the DPA.  The discretion as it applies to disclosure is circumscribed by ECHR, art 6, the common law right to a fair trial and by the AG’s Guidelines;
• in its decision letter subject to the judicial review, the SFO simply accepted the assertion of LPP made by the company’s lawyers even though it was the SFO’s own case that LPP did not apply and the SFO’s position is supported by the current case law;
• the SFO never addressed itself to the issue of waiver of privilege (either as a matter of law or as part of the company’s duty to co-operate) arising as a result of the oral proffers;
• the SFO adopted a test of “not obviously invalid” in relation to the company’s assertion of LPP and in so doing it erred since its duty is to assess privilege claims properly and not cursorily and superficially;
• in any event the SFO had not either before or during the judicial review hearing provided any sort of reasoning for its conclusion that the points advanced by the company’s lawyers in correspondence were “not obviously wrong”;
• if and insofar as the SFO adopted an approach whereby it declined to reassess its disclosure obligations in the light of developments in the law because of a concern for “finality” reasons then it erred since that it is tantamount to an argument that the SFO can ignore the law and its duty to keep its disclosure obligations under review.

“In short”, the Court concluded, “the SFO failed to address relevant considerations, took into account irrelevant matters and applied the wrong legal test to the assessment that it made. These public law errors were material.  If, on proper analysis no privilege applies (either per se or because of waiver) then XYZ Ltd should simply disclose the interview records forthwith”.

Tim Owen QC was involved in this case.