A new dawn at the Serious Fraud Office
On 13 February 2024, Nick Ephgrave delivered his first public speech as the new director of the Serious Fraud Office (“SFO”), declaring that “The SFO will be bolder, pragmatic, more proactive”.
Mr Ephgrave began his tenure in September 2023 and, unlike previous incumbents, his is not a legal background but rather a policing one so it was interesting to see where he considers the emphasis for the SFO is going to land in the coming months.
Mr Ephgrave’s speech was not purely a wish-list of all he hopes to achieve; he spoke at some length about the history of the SFO and their previous achievements.
The main themes emerging from the speech were those of maximising efficiencies and building relationships with other agencies as well as learning from methods utilised by other jurisdictions.
Mr Ephgrave was keen to point out that whilst the prevalence of emerging technology in the modern age presents greater opportunities to fraudsters, making it difficult for the authorities to keep up with, let alone get one step ahead of, this is not something new to be dealing with and is not a just a result of the digital age.
In reflecting upon the work the SFO has undertaken before he took the helm, Mr Ephgrave made reference in particular to the victims of fraud and drew on his policing experience, stating that he has a “visceral reaction” when he reads a victim statement or is briefed on the effects of misdemeanours carried out by corporations or businesses.
In looking forward to his ambition for the SFO under his directorship, Mr Ephgrave wants the SFO to be more prevalent in the role it plays in the national effort to attack and reduce fraudulent activity. He is keen for his team to work with other agencies, such as the National Economic Crime Centre, to enable collaboration and share experience and insight.
The speech also focused on improving efficiencies within the SFO. He pointed out the immense task that is the disclosure process in the cases his team investigates – he made mention of an active case which involves 48 million documents and the time it can take to trawl through years’ worth of relevant records. 25% of the SFO’s operational budget is spent on disclosure. The SFO is introducing a new review process on its current cases, whilst also introducing new techniques for investigation which are being used already in other spheres and it is currently piloting “technology assisted review” with an aim to reducing the time spent on the analysis process.
Mr Ephgrave wishes to make better use of existing legislation, such as the Serious Organised Crime and Police Act which he considers is not used to its fullest ability, and he referred to the way that witnesses are incentivised in the United States without question and yet, despite the ability to do so in the UK, it is not generally accepted behaviour.
What will be seen as the most controversial aspect of the speech was the suggestion of reform to permit payments to whistleblowers to incentivise reporting. Mr Ephgrave referenced a significant proportion of civil settlements and judgments which the US Department of Justice recovered emanated from whistleblower information.
Mr Ephgrave wants to use this existing legislation to enable offenders to assist in investigations as he considers this will provide a swifter resolution to investigations as well as providing a reduction in sentence for the defendant.
A win – win solution?
Colette Kelly, Partner in Irwin Mitchell’s Regulatory and Compliance Group Comments:
“The indication that the SFO is working to reduce time spent on investigations to three years is welcomed. However, there will be significant hurdles in seeking to implement a policy of paying rewards to whistleblowers, not least relying on evidence obtained under such a scheme and the challenges that would be made to this at trial.
We will see if the SFO will be bolder, pragmatic and more proactive.”
