In focus: Solicitors cool over new director's plans to transform the SFO

In his first public speech, the new director of the much-criticised Serious Fraud Office spoke about borrowing investigative techniques from the policing world, the burden of disclosure – and paying whistleblowers to speed up the agency’s work.

Speaking at the Royal United Services Institute last week, Nick Ephgrave said that he is a ‘law enforcer’ rather than a lawyer like his predecessors. If the SFO was ‘serious about cases being quicker’, the organisation would ‘need to focus on intelligence and evidence’.

‘Under my leadership, SFO cases will be processed more quickly, we will be faster,’ Ephgrave said.

He discussed the organisation’s successes – ‘the last five years of our work have generated £1.1bn for His Majesty’s Treasury… for every pound put into the SFO, we give back three’ – and challenges, including disclosure: ‘We have a case on the books at the moment, where we are dealing with 48 million documents, 6.5 terabytes of data. You can imagine what sort of disclosure burden that is.’

On the measures Ephgrave has brought in to cut long case timelines, he said the SFO would be unafraid to shut down investigations. He highlighted a new ‘rigorous and intrusive review process’, and the use of a wider range of investigative techniques, ‘many borrowed from [Ephgrave’s] previous world’, as well as machine learning to help with disclosure.

'Incentivisation of whistleblowers and effective use of the assisting offenders legislation – you’ve got the building blocks there for a much quicker, more efficient way of dealing with these very very complex, big cases'

Nick Ephgrave, SFO

Disclosure ‘gobbles up’ around 25% of the SFO’s operational budget, Ephgrave said. ‘We are piloting something called technology-assisted review, which is a form of machine learning to assist us in our disclosure obligations to try and provide a more accurate and more speedy disclosure review process.’

Ephgrave gave ‘possible suggestions’ on how to expedite cases from investigation to prosecution, with financial incentives for whistleblowers and making ‘better use of assisting offenders legislation’.

He said the ‘benefits outweigh the disadvantages’ when considering paying whistleblowers and acknowledged ‘how difficult it is to be a whistleblower’.

‘So, putting those two things together. Incentivisation of whistleblowers and effective use of the assisting offenders legislation – you’ve got the building blocks there for a much quicker, more efficient way of dealing with these very very complex, big cases.’

Solicitors specialising in white-collar crime reacted coolly to Ephgrave’s speech.

Richard Cannon, partner at Stokoe Partnership Solicitors, said: ‘For an agency that has long struggled with issues of transparency and disclosure, covert tactics could be an unwelcome addition to the organisation’s playbook. If the agency is to regain public confidence and trust it must work to ensure there is greater transparency in investigations and prosecutions. This path is fraught with danger.’

John Binns, white-collar crime partner at BCL Solicitors, said it is ‘crucial’ the SFO uses methods open to it ‘wisely’. He added: ‘The SFO’s toolbox has never been more packed, with compulsory disclosure, deferred prosecution, and “failure to prevent” offences.’

Robert Dalling, partner in investigations, compliance and defence at Jenner & Block, said: ‘The question of disclosure has been a thorn in the side of the SFO for many years. It’s hard to see how there can be meaningful change without significantly more resources for the SFO, bearing in mind the size of the matters they prosecute.’

Lloyd Firth, counsel in WilmerHale’s UK white-collar defence and investigations practice, described Ephgrave’s aims as ‘hugely ambitious’, adding: ‘Leaving aside questions of statutory power and expertise regarding live covert intelligence gathering – the SFO has none and limited respectively – it would truly be transformational for the SFO were it to achieve Ephgrave’s ambitions in this regard.’

Louise Hodges, head of criminal litigation at Kingsley Napley, said: ‘It is encouraging to hear [Ephgrave] talk of taking a fresh look at how the SFO conducts its investigations and creating an era of bolder and more decisive action. Nick and the organisation he leads need to get some early successes under their belt but will find it difficult to succeed long term without increased resourcing and robust support from the government.’

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