In 1981, before fraud became a specialist area, the Royal Commission on Criminal Procedure considered prosecutions in general. It found that the police pursued weak cases despite adverse legal advice and closed their minds to contrary evidence. They also overloaded trials with too many charges. The Commission even asked if the investigator might, by virtue of his function, be incapable of making a dispassionate decision on prosecution. Accordingly it recommended separation of the roles of investigator and prosecuting lawyer, leading to the establishment of the Crown Prosecution Service (CPS) in 1985.
Meanwhile, the Roskill Committee on Fraud Trials also worked away, reporting in 1987. This produced the SFO, an independent Government department, headed by the director. It is unique in the UK as an investigative agency that also makes its own prosecution decisions.
While the CPS quietly progressed, the SFO was swamped with criticism over its declining throughput and falling conviction rate. In 1994 the Graham report recommended a merger with the CPS, a proposal that was rejected in 1995 by the Davie review because it would violate the CPS principle of separating the prosecutorial and investigative roles. Although the SFO survived, its problems continued. It went on to fight and lose a series of major cases, including Blue Arrow and the Maxwell brothers.
But the SFO director is also its principal accounting officer. Growing accountability for public finance now added pressure on the prosecutorial role. In 1998 the SFO made a Public Service Agreement with the Treasury. A key measure was the proportion of cases under investigation that were cuted. In 2002 this measure was abandoned, but the contradiction underlying it continues — that high-cost investigations by a relatively small government agency create significant political pressure for prosecutions to proceed.
This structural flaw in the SFO emerged again in the BAE debacle. Lord Goldsmith, then Attorney General, believed the case would fail on evidential grounds. The Corruption Act requires proof that a foreign government does not consent to an allegedly corrupt payment. This is a major difficulty in countries where commission payments are a cultural norm, not least in Saudi Arabia. Equally tricky is the extra-territoriality question. In 2001 the Government put a clause in the Anti-Terrorism Crime and Security Act extending the Corruption Acts to overseas corruption. But criminal sanctions cannot be imposed retrospectively.
Despite warnings from the Attorney General, the SFO nonetheless determined to press ahead. When Robert Wardle finally ended the BAE investigation he failed to mention that the evidence was poor. Lord Justice Moses commented wryly: “It is unfortunate that no time was taken to adopt the suggestion to canvass with leading counsel the Attorney General’s reservations as to the adequacy of the evidence.” Today Lord Goldsmith still asserts the case was impossibly flawed. Many lawyers (and the Law Commission) share his analysis. Had Wardle taken independent legal advice he might have spared the Government major embarrassment and the taxpayer major expense. It seems that institutional ambition trumped the rule of law long before Tony Blair got near the case.
On entering office, the new Prime Minister, Gordon Brown, announced a review of the role of the Attorney General. On 25 March, Baroness Scotland said she would give the new director of the SFO her power of final consent in corruption cases.
Alarm bells should ring. The constitutional arguments against letting the investigator evaluate its own case have not changed since 1981. The risk now is that the SFO will lack the courage to drop its pre-2001 overseas corruption cases, blocking the flow of resource to new and scandalous cases. The UK needs an independent prosecutor not only to defend the rule of law against foreign governments but also to resist the pressure for high-profile prosecutions irrespective of their prospects. The Director of Public Prosecutions has no vested interest in SFO investigations and already uses external counsel in sensitive cases. It is to him that this decision-making power should go. n
Jane Hickman is managing partner of Hickman & Rose Solicitors.
