Civil recovery still an option in cases of complex fraud or bribery, SFO confirms

Out-Law News | 23 Apr 2013 | 11:35 am | 2 min. read

The Serious Fraud Office (SFO) remains open to pursuing civil recovery where appropriate in cases of serious or complex fraud, including bribery and corruption offences, it has confirmed.

In a short statement published on its website, the SFO said that civil recovery powers would provide it with an "additional means of dealing with certain cases (or parts of cases) where property derived from crime can be identified". It would follow guidance on asset recovery powers published by the Attorney General when exercising these powers, it said.

The statement added that the SFO would "place in the public domain sufficient information" about cases where it used the powers in order to "demonstrate transparency in its decision making".

The Proceeds of Crime Act (POCA) granted courts additional powers in relating to the confiscation of property and assets related to criminal activity. Civil recovery allows investigating agencies, including the Crown Prosecution Service (CPS) and SFO, to seek a court order that specified property is recoverable on the basis that it is or represents the proceeds of criminal conduct. It can do this before or without a criminal conviction against the party accused of the offence.

Anti-corruption law expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that the restatement by the SFO of principles published in the Attorney General's guidelines "could be overlooked as non news". However, the future use of civil recovery orders had seemed questionable following the appointment of the "more hard line" David Green as SFO Director in 2012, he said.

"Two prior reviews since the publication of [the Attorney General's] guidance ... demanded that changes be made or clear guidelines given in the context of civil recovery orders," he said, writing on his website thebriberyact.com.

"Civil recovery orders maintain their place in the SFO's enforcement armoury, even in a world where there are deferred prosecution agreements. Which road is chosen will depend on a combination of factors, not least the evidence and the outcome of the weighing of the various factors in deciding whether to prosecute," he said.

He pointed out that the SFO's policy of transparency in relation to civil recovery orders had already been demonstrated following its settlement with Oxford University Press in July 2012. The SFO's press release on the £1.9 million settlement with the publishing company, which related to "unlawful conduct" by its subsidiaries in Tanzania and Kenya, was far more detailed than similar releases under the previous regime, he said.

The SFO has already made changes to its policy on self-reporting of offences under the Bribery Act since Green was appointed. Its policy now makes it clear that businesses that flag up bribery cases they are involved in could still be prosecuted where there is a "reasonable prospect of conviction" and if it is "in the public interest" to pursue a criminal case. Previous SFO guidance suggested that companies which self-reported instances of corruption would be looked on more favourably, and may have received civil penalties rather than criminal ones.

In recent comments reported on thebriberyact.com, Green said that previous guidance had "implied that if a corporate self-reported to the SFO then the SFO would strain every sinew to resolve the matter by civil settlement and not be prosecution". He said that "no prosecutor" could "ever give such a guarantee in advance: each set of facts is unique".

However, he added that "the fact of self-reporting would weigh heavily in the public interest against prosecution" in genuine self-reporting cases, where companies provided the SFO with information it would not have found out about otherwise.