City of London Law Society recommends urgent reform of the Serious Fraud Office

The City of London Law Society published a report on the future of the Serious Fraud Office (SFO) on 20 April, which calls for urgent and focused reform of the SFO in light of the setbacks faced by the SFO in recent years in delivering on its mission to prosecute complex fraud and bribery.

The City of London Law Society mentions, in particular, the collapse of another SFO prosecution in March, involving three former employees of G4S subsidiary G4S Care and Justice Services who were formally acquitted at London’s Old Bailey of seven charges for allegedly defrauding the British government between 2009 and 2012 over an electronic tagging contract. The SFO faced criticism following the collapse of the case after a decade of work, delays and spiralling costs. On 10 March 2023, the SFO informed the court that it would not be proceeding with the trial of the executives, as it was determined that it was no longer in the public interest to continue the prosecution.

The City of London Law Society’s Corporate Crime and Corruption Committee states that it is necessary to address and fix the SFO’s shortcomings in order to protect the effectiveness of the UK’s justice system as regards complex fraud, and to maintain the UK’s reputation as a reliable hub for financial services and destination for investment. The report includes 14 recommendations to improve the SFO's governance, investigations and disclosure.

A key recommendation put forward in the report is to increase the budget of the SFO by at least 50 per cent to ensure staff remuneration is adequate and the necessary investment in infrastructure. In addition to this, in line with a recommendation by the House of Commons Justice Committee, the creation of a new ministerial position, a Minister of State for Economic Crime, based in the Home Office is also recommended, who would be tasked with safeguarding the independence and effectiveness of the relevant agencies. The report also states that consideration should be given as to whether there is a case for reform of the governance of the SFO, in particular the balance between operational independence and accountability.

Commenting on the report, the Chair of the City of London Law Society’s Corporate Crime and Corruption Committee, Eoin O’Shea, said: “Financial crime such as fraud is now an enormous social and economic problem. It cannot be investigated or prosecuted on the cheap. New laws are all very well but enforcement is key. It is vital for the UK to grasp the nettle of resourcing and reform of the SFO to protect public confidence in the justice system’s capacity to combat fraud, and the country’s international reputation.”