Lengthy Sfo Investigations

Aziz Rahman considers whether SFO investigations could be
concluded quicker.

The Serious Fraud Office (SFO) has managed to defeat a company’s
legal bid to have a bribery investigation into it ended because it was damaging
its business prospects. But while the SFO has seen off this challenge, the
issues that the case focused on remain relevant for many who are subject to such
investigations.

In its legal action, Soma Oil & Gas Holdings Ltd
attempted to have the SFO end its bribery investigation into the company;
arguing that the firm could become insolvent if the probe continued. Soma’s
lawyers had sought a judicial review, claiming that the SFO had not considered
the risks to the company’s future posed by the continuing investigation; which
began in August 2015 with offices raided, 50,000 documents and 20,000 emails
examined and three directors interviewed as suspects.

Judicial Review

The application for a judicial review – a court review of
the SFO’s actions – was denied by judges at London’s High Court of Justice,
Queen’s Bench Division as they did not see it having any "prospect of
success." But in the judgment, Lord Justice Gross acknowledged that “The
Court nonetheless had some sympathy with the position in which Soma found
itself and exhorted the SFO to proceed as expeditiously as possible’’.

In simple terms, Soma was told it wasn’t gaining its wish to
end the investigation but the SFO was being told to be quick about it. Which
may be a dilemma familiar to many under investigation by the SFO.

The SFO had opened an investigation into Soma regarding
possible illegal payments to Somali officials under a programme to explore the
region for oil and gas. Soma had argued that it would be insolvent within weeks
if the SFO investigation continued; as it would prevent vital contracts being
signed. SFO lawyers denied this; adding that it was still looking into another
strand of the investigation.

Length of Investigation

At present, there is no power to stop an investigation in
its tracks due to the length of time it is taking. It is likely that the SFO
covertly began building its Soma case before the raids; for example, seeking
disclosure orders against banks. This means that the case may have already been
going on for more than a year and a half.

Every Director of the SFO has expressed a willingness to cut
the length of time it takes to complete investigations. Yet some take more than
five years while the average gestation for an SFO investigation seems to be
around two years. This has to be considered unacceptable.

Many have suffered a similar fate to Soma. As well as disruption
to their daily life caused by restrictions on their movement, they may also be
subject to a restraint order; which means restricted access to their assets.
Assets are often frozen under the terms of a restraint order imposed when an
investigation begins – before any guilt has been proven.

Restraint Order

In cases where a restraint order is in place, one solution to
such problems would be to discharge it after a set amount of time if no charges
have been brought. If there is a restraint order, the investigation does at
least have to be the subject of judicial scrutiny.

With the right legal advice, there is usually scope to have
the order discharged or at least amended so a person can access some of their assets.
But this does not mean that the investigation would end, meaning many would
still suffer the problems Soma was alleging. And it certainly is of no benefit
or relevance to those who are the subject of a lengthy investigation without a
restraint order.

A point that is worth noting from the Soma case is that although
the SFO was determined to carry on its investigations, it did at least confirm
in a letter to the oil and gas company that it had concluded the first strand
of its investigation and found no need to take it further. This could at least
provide some comfort to Soma – and give the company some reassurance to pass on
to potential investors and business partners.

If Soma had not brought its legal action, it is very
unlikely it would have received such detail from the SFO: a possible indicator
of the value of having a legal team that thinks “outside of the box’’ to pursue
a client’s interests during an investigation.

It still, however, remains unclear about the extent of the
second strand of investigation that the SFO is continuing. Which again prompts
the question, how long should a serious and complex fraud investigation be
allowed to go on for?

The SFO may choose to relax bail conditions. But does that
mean that an investigation is over? When a person’s business and personal life
is still being disrupted, we would clearly say no.

Judicial Scrutiny

My belief is that we live in an era in which the police and
/ or the SFO are under resourced. This means that it can take a long time for
an investigation to be completed.

One way to solve this could be for there to be a time limit
imposed on investigating authorities: if they have not completed their
investigations by a set time they should have to justify to a court why they
should be granted extra time to continue.

This way would mean that the conduct and speed of the
inquiry would be subject to judicial scrutiny. Perhaps in this way, those under
investigation would at least have some idea of how long their ordeal may last –
and their legal representatives would have a better chance of gauging the
likelihood of charges being brought against their client.

Legislation

Could or should legislation be introduced to remove the
problem? It is possible. The Policing and Crime Bill may have a profound effect
on such situations.

Five years ago, the High Court upheld a ruling by a district
judge that police must question and charge a suspect within four days of
detention. It led to fears that suspected murderers and rapists could walk free
if police couldn’t build up a case in time and contradicted 25 years of police practice.
It also led to then Home Secretary Theresa May rushing through an emergency
bill to restore the police power to bail. The resulting Police (Detention and
Bail) Act 2011 was retrospective, meaning that police forces were protected
from any possible compensation claims.

The change in the law made it clear that time spent on
police bail does not count towards those 96 hours and the “clock” only runs
while suspects are detained. It was an emergency piece of legislation that
swiftly corrected a problem.

Now, however, there is the Policing and Crime Bill, which is
currently being considered by Parliament. This Bill proposes a 28-day maximum
period of time for people to be kept on bail before a decision is made on
whether to charge them. A decision to extend this bail by a further three
months can then be taken by a police superintendent; with any further bail
extensions only granted by application to the magistrates court or if the case
is considered to have “exceptionally complex’’ provisions.

The government has also indicated that especially serious
cases could be subject to a different bail timescale.

The Bill is not yet law. If it becomes law, it remains to be
seen how many SFO investigations may be considered exceptionally complex or
especially serious for the purposes of bail. But it is at least a cause for
optimism that the current problems could be reduced.