TWENTY YEARS have passed since Lord Roskill famously declared that “the public no longer believes that the legal system . . . is capable of bringing the perpetrators of serious frauds expeditiously and effectively to book”. As then, the overwhelming weight of evidence suggests that the public is right.
The fight against a rising tide of serious fraud is being frustrated by fragmented use of inadequate resources, onerous obligations on investigators and unmanageably long trials with soaring legal aid bills. The most stunning example of a prosecution gone wrong came in March last year when the Jubilee Line corruption case was abandoned after a 21-month trial, at an estimated cost of £60 million.
The Government and judiciary have not stood still since Roskill. The Government is engaged in an important review of the way fraud is investigated, prosecuted and tried. However, neither the new measures announced by ministers and the judiciary, nor the proposals contained in the fraud review’s interim report, provide a truly effective regime for investigation and prosecution of serious fraud.
Four significant problems contribute to justice not being done.
First, there are weak and fragmented resources. While there were 869 fraud investigators in 1995, this fell to 600 in 2003.
Secondly, the present law unhelpfully dictates the way in which an investigation must be conducted. The obligation on the prosecution to investigate “all reasonable lines of inquiry” prolongs investigations and trials. If wasting valuable resources is to be avoided, an investigating authority must be able to select a confined area for investigation without running the risk of criticism from the court.
Thirdly, there is poor trial management, with judges sometimes assigned to a fraud case late in the day. Some judges remain uneasy with IT.
Fourthly, there is no provision for pre-charge bargaining.
Radical changes must be made if public confidence is to be restored in this complicated area of criminal practice.
The number of authorities involved in the investigation and prosecution of serious fraud must be rationalised.
The Government is interested in “partnerships” in which public and private sectors collaborate to finance investigations. But excessive dependency on private funding signals that corporate fraud is not taken as seriously as other criminal activity.
If private investigations are to be encouraged, compulsory training for private investigators is required. They should be registered and subject to the Criminal Procedure and Investigations Act 1996 (CPIA) and the Regulation of Investigatory Powers Act 2000.
Much greater use of a “lead force” should be made among the police authorities, replicating the situation where City of London Police are the “lead force” for the investigation of fraud in the South East. Lead forces must be properly funded, with adequate investigative resources.
The CPIA code of practice needs to be amended. A framework must be established enabling an investigating authority to close down an unpromising line of inquiry, subject to approval from a Crown Court judge. A suspect or defendant could apply for a court order requiring the investigating authority to explore a line of inquiry.
If a prosecution is commenced, the prosecuting authority would present the judge with a schedule of unused material. With the exception of material directly relevant to issues likely to arise at trial, the defence should satisfy the court that there is good reason for further disclosure to be made.
A decision to focus investigation on a particular area of criminality should not derogate from the Assets Recovery Agency’s ability to pursue civil recovery of other criminal assets where prosecution is possible but not economically viable.
A cadre of ten specialist fraud judges should be established with status similar to that of mercantile, technology and construction judges. They would try the most complex fraud cases in centres fully equipped with the latest case IT.
Trial management techniques must be taught to judges who try complex fraud cases.
Prosecuting and defence solicitors also require case management training. Just as prosecuting solicitors need management skills, defence solicitors should be required to demonstrate case- management abilities to obtain a franchise for serious fraud cases.
Pre-charge plea bargaining would have a dramatic effect upon the investigation and prosecution of fraud cases. With co-operation from suspects at an early stage, an investigating authority could obtain a clear account of the fraud, and the persons responsible for committing it. Provision must be made for pre-charge legal advice. Discussions between prosecutors and the defence should be encouraged. If defence counsel could seek assurances at the pre-trial stage on sentence and confiscation, defendants would be more willing to plead guilty. The law should be changed to allow a proposed pre-charge bargain to be brought before the court.
A “pre-charge statement” would enable a prosecutor to explain the case in an easily comprehensible manner. Accomplice evidence would facilitate the conviction of other participants in the fraud.
To safeguard the rights of defendants, no conviction should be permitted on an accomplice’s uncorroborated evidence.
Considerable improvements in investigation and prosecution of serious fraud could be made if these changes were adopted. Savings would be made through more focused investigations and shorter trials. At worst, the impact would be cost-neutral.
The author, a QC at 18 Red Lion Court, is chairman of the Special Project Group. Other members are Robin Booth, Ken Farrow, Will Kenyon, Professor David Ormerod and Rosalind Wright, CB.
The full report is found on www.fraudadvisorypanel.org
