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Insights

03 August 2017

Has the proposed merger of the Serious Fraud Office and National Crime Agency been scrapped?

Background

Prior to the recent snap general election, the Conservative Party manifesto included a commitment to incorporate the Serious Fraud Office (SFO) into the National Crime Agency (NCA). The manifesto contained few details about how and when the merger would take place. Last week’s Queen’s Speech contained no mention of the proposal, leading to the inevitable discussion as to whether this may have been quietly dropped. 

What are the practical difficulties of incorporating the SFO into the NCA?

In order to integrate the SFO into the NCA, the SFO would have had to be disbanded. The SFO (including its powers and who oversees its operations) was formed under statutory provision in the Criminal Justice Act 1987, and so disbanding it would have required the repeal of the relevant provisions.

This raised at least two problems:

1. If you repeal the sections creating the SFO and giving it its investigatory powers, what is the admissibility of evidence obtained by the SFO in the exercise of its investigatory powers prior to the SFO being disbanded in cases brought after it has been disbanded?

2. The Attorney General currently has ultimate responsibility for the SFO, whilst the NCA comes under the remit of the Home Office.  Who was intended to oversee the integrated entity? If the Attorney General was to be side-lined, what effect would that have had on the credibility, support and independence of the integrated entity?

The problem does, however, go further. The SFO and the NCA do not exercise the same powers, and do not exercise those powers for the same purpose. The NCA’s officers have the same powers and privileges as police officers but not the separate powers of the SFO to investigate and prosecute white collar crime, which is increasingly a priority for the Government.

Why is the proposal unpopular?

Aside from the difficulties expressed above, there were also concerns about the wasted costs involved in carrying out the merger, the intervening impact on the casework of both entities, and the longer term concerns over the dilution of expertise that the SFO, in particular, has worked hard to accumulate. The removal of a stand-alone organisation to fight white collar crime also appears to contradict the Government’s purported desire to focus on identifying and prosecuting white collar and economic crime. Such a focus had been well-received internationally, following sustained criticism of the Government’s previous approach by bodies like the Organisation for Economic Co-operation and Development.

Will the proposal be scrapped?

The recent announcement that the Conservative party has agreed the terms of a “confidence and supply agreement” with the Democratic Unionist Party should herald greater clarity in respect of the Government’s broader policy intentions.  That said, with the purported additional £1billion in funding for Northern Ireland that forms part of the new agreement and the small matter of the Brexit negotiations, it looks likely that this potentially expensive and unpopular proposal is delayed, possibly indefinitely.


This article was written by Rhys Novak and Max Davis. For more information please contact Rhys on +4402074276563 or at rhys.novak@crsblaw.com or Max on +44 (0)20 7427 6603 or Max.Davis@crsblaw.com.

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