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SFO: Disclosure Failings lead to Trial Collapse

27 April 2021

FCA Investigation

Serious Fraud Office (SFO) Disclosure Failings Cause Serco Fraud Trial Collapse

Article by: Robert Borwick

Once again, disclosure failings by the Prosecution, in this case the SFO, have resulted in the collapse of a serious fraud case.  Yesterday two former senior executives at Serco were cleared in a case where it had been alleged there had been fraud against the Ministry of Justice between 2011 and 2013, in that they had hidden profits from the firm’s government electronic tagging contracts.

Following the Defence raising issues relating to disclosure, Mrs Justice Tipples stated that the issues identified had undermined the process of disclosure in the case to the extent that the trial could not safely and fairly proceed until the issues had been remedied.  Accordingly, the SFO sought an adjournment mid trial to remedy these issues. This application was refused by the Judge.

Following a failed application to adjourn the case, the Prosecution offered no evidence.  As expected, Mrs Justice Tipples directed the jury to acquit Nicholas Woods and Simon Marshall who were standing trial.  The trial had commenced in March 2021 at Southwark Crown Court.

By way of background this investigation into the £12 million fraud began October 2013.  The investigation resulted in a Deferred Prosecution Agreement (DPA) with Serco which resulted in the company being handed a fine of £19 million.  This was the fifth DPA and was approved by Mr Justice William Davis.

A Deferred Prosecution Agreement (DPA) is an agreement reached between a prosecutor and an organisation which could be prosecuted, under the supervision of a judge. They were introduced following the Crime and Courts Act 2013.  The agreement allows a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions.  These can be used for fraud, bribery and corruption and other economic crime.  These do not apply to individuals. They allow a corporate entity to make reparation for criminal behaviour without having the reputational damage of a conviction. They are overseen by a Judge who must be convinced that it is in the interests of justice and is fair, reasonable and proportionate. The benefit to the SFO: the fact that they save lengthy and costly trials.

To date there have been nine DPA’s, some of which have been with well-known companies such as Tesco, Rolls-Royce and G4S Care and Justice Services Ltd.

It is of note that there has yet to be a successful prosecution of an individual following a DPA with a corporate and these failings will need to be considered carefully by the SFO moving forward, following this trial collapse.

ABV Solicitors regularly defend clients in SFO investigations and prosecutions.  We have a specialist fraud team who defend clients in cases being prosecuted by the SFO, FCA, HMRC and CPS Specialist Fraud Unit. Please contact us on: 0344 587 9996.

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