Commentary: Fraud legislation in the dock

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The Independent Online
It has been a terrible start to the year for the Serious Fraud Office. The acquittal of Thomas Ward, less than a fortnight after the jury was discharged for three of the four defendants in the Eagle Trust trial, does nothing to improve its recent success rate. This was already looking weak with the abandonment last year of the third Guinness trial and the acquittal on appeal of four Blue Arrow defendants during the summer.

Worse still, the SFO received a shock last week when a stipendiary magistrate challenged its power to compel a suspect in a fraud case to co-operate in an investigation. The SFO had thought the powers had been confirmed last year in a House of Lords judgment, but now it may go all the way to the Lords again.

There are bound to be more attacks on the SFO. But the debate has moved beyond the SFO's structure and competence to fundamental questions about the legal framework in which it operates.

This morning, Mr Justice Turner, the Ward trial judge, has promised to return to a theme well rehearsed by previous judges in complex cases: the general problems of fraud trials. By past standards this one was refreshingly brief, so he need not revisit the well-worn theme of how to shorten hearings. He may, however, add his thoughts to a consensus emerging on changes needed to the law. A large number of suggestions have been aired, including a tougher approach to pre-trial disclosure of the defence case, to allow the issues to be narrowed down, and stronger powers for judges to push both defence and prosecution into co-operating in pre-trial hearings.

There are proposals, backed by Barbara Mills, Director of Public Prosecutions (and former director of the SFO), for a new, all-embracing offence of fraud. And of direct interest to the City, there is pressure to give courts the power to bring in regulators, so they can combine civil penalties with the criminal sanctions of the court in a process of plea bargaining.

We will not know which of these ideas has found favour until the Royal Commission on Criminal Justice reports in the summer. But as Mr Justice Henry, an earlier Guinness trial judge, has said: 'Without legislative changes I do not believe that things will get better, in fact I am certain they will get worse.'

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