Priorities & proposals: Key takeaways from the new SFO Director's first official speech

On Tuesday 13 February 2024, the new Serious Fraud Office (SFO) Director Nick Ephgrave QPM, gave his first official speech at the Royal United Services Institute (RUSI) in London, outlining key priorities under his Directorship and proposals to meet the challenges facing the UK enforcement agency.

The overarching tone of the speech is one of a Director who appears keen to reinvigorate the SFO and improve its processes. The Director made reference to existing and new tools at the SFO's disposal which he hopes to employ in order to speed up investigations and, ultimately, to bring more prosecutions.

This post sets out some key measures highlighted by the Director in his speech.

Evidence-gathering measures

• More dawn raids: Dawn raids are carried out by enforcement agencies in order to obtain evidence where there are suspicions of illegal activity at business premises. Ephgrave stated “we have already gone through more front doors in the last three months than in the last three years”, indicating an apparent uptick in SFO-led dawn raids under his Directorship. 
• Incentives for whistleblowers: The Director raised the somewhat controversial possibility of considering offering financial incentives to encourage whistleblowers' assistance in SFO-led investigations, making reference to similar measures used in the United States. This is a suggestion that may have some chance of gaining legislative traction, given that a government review of the UK whistleblowing framework is currently underway. 
• Assistance by offenders: Ephgrave considered making renewed use of sentence reduction offers to offenders in order to secure their assistance in SFO investigations. Such agreements to reduce sentence may be made under section 74 of the Sentencing Act 2020 (replacing the now repealed section 73 of the Serious Organised Crime and Prevention Act 2005 (SOCPA)). However, although a court may take into account the extent and nature of an offender's assistance, a judge is not obliged to apply any sentencing discounts. This preserves the discretion of the sentencing judge but also demonstrates the downsides arising from a lack of certainty for defendants contemplating such agreements. While not explicitly mentioned in the speech, the statutory framework also provides the availability of other measures such as immunity agreements, although these have been exceptionally rare.

Investigation management and efficiency

• Review of active cases: The Director mentioned the introduction of “a rigorous and intrusive review process” on active cases to ensure investigations maintain focus on the core issues.
• Reallocation of resources: In the interests of ensuring investigation resources are used most effectively, Ephgrave promised to “be bolder, more pragmatic, more proactive”, in taking decisions to close investigations assessed to be unlikely to reach the threshold for charge in order to redirect resources to other stronger cases.
• Document review tools: In the hopes of addressing disclosure challenges, the Director stated that the SFO is already piloting use of "Technology Assisted Review” (TAR), which uses machine learning methods such as predictive coding to automate some parts of the document review process. While this may assist case teams to identify key evidence to build the prosecution's case more quickly, it may be less useful in addressing other key challenges, namely around disclosure. This is because decisions regarding disclosure of material to the defence must be in line with the high bar set by the SFO's statutory disclosure obligations. Additionally, there are wider questions around the use of AI in the justice system, in particular with regard to ensuring transparency of prosecutorial decisions and defendants' right to a fair trial.

Prosecutorial tools

• New offences under ECCTA: The Director expressed the aspiration of being the first to prosecute under new provisions of the Economic Crime and Corporate Transparency Act 2023 (ECCTA).  New offences in ECCTA include the corporate offence of failure to prevent fraud offences under section 199 (applicable only to “large organisations”), in addition to a new rule of attribution allowing certain prescribed economic crime-related offences committed by senior managers to be attributed to corporates under section 196. These were introduced in part to address prosecutorial criticisms, particularly in the context of fraud offences, levelled at the high bar set by the legal requirement to prove an individual represented the “directing mind and will” of a company in order to attribute their criminal conduct to the company. In addition to other actions, such as the SFO's involvement in the UK government's ‘Stop! Think Fraud’ campaign, there are indications that fraud will be in sharp focus for the SFO in the coming years.

To read the full text of the speech, see here.

Subscribe to Ropes & Gray Viewpoints by topic here.