Fraud 'gunslinger' shoots back: In the wake of Thomas Ward's acquittal, Peter Rodgers talks to the head of the Serious Fraud Office

Click to follow
The Independent Online
GEORGE STAPLE, head of the Serious Fraud Office, was yesterday undaunted by the acquittal of Thomas Ward in the final Guinness trial. Though there are certain to be brickbats for the SFO over the next few days for failing to win yet another high-profile case, this time it is hard to blame the methods the prosecutors used.

Before the trial started, they had already taken on board two of the key criticisms of their past efforts. They fielded a truncated list of charges and the proceedings took place with a brevity that should for once have allowed the jury to remember at the end what it had heard at the beginning.

Nevertheless, the SFO's continuing patchy record in securing convictions is bound to add new force to the debate about whether Britain is tackling fraud in the right way.

Is the anti-fraud service badly run? Is it youthful but learning from experience, ready for the next upturn in fraud, which Mr Staple expects when the economy recovers? Or is there an inadequate legal framework for the prosecutors?

The argument that it is the criminal justice system that is at fault rather than the SFO received new backing yesterday from Mr Justice Turner, the judge in the Ward case.

He called for much greater disclosure of both the prosecution and defence cases on paper, before the trial proper gets under way, and made clear that even the five-week Ward trial would have been shorter if less time had been wasted in evidence that did not get to the substantive issues.

Earlier disclosure is dear to the heart of the SFO, and Mr Staple welcomed the judge's comments, which, although framed in general terms, appeared to take some of the sting out of losing.

Mr Staple said: 'The judge has made an important contribution to the debate. I hope the Royal Commission on Criminal Justice (which reports on these issues later this year) will look very carefully at what he has said and as a result will recommend change.'

Both Mr Staple and his predecessor, Barbara Mills, have made clear they believe too much time can be wasted as trials go down blind alleys.

Key issues lie 'buried until a late stage', is how Mr Justice Turner put it. This can easily turn into an ambush by the defence.

As Mr Staple said, there is a long tradition in British justice that the defence is allowed to keep its cards up its sleeve. His argument for a different treatment of fraud is that prosecution and defence are usually document-based and highly complex. New disclosures at a late stage make trials unmanageable and convictions more difficult.

In the wake of setbacks for the SFO such as the acquittal last year of Lord Spens after a previous Guinness trial and the overturning of the convictions of four defendants in the Blue Arrow case, there has been what Mr Staple politely called a 'fairly active discussion' about the SFO's role.

The less polite Lord Spens last month called the SFO 'no better than a cowboy outfit with a gunslinger mentality', complained that it withheld documents from the defence and called for reform of its methods and structure.

Mr Staple, who said the charge of withholding documents was untrue, defended the SFO's record.

He said: 'I think it is important to remember that prosecution is not about winning at all costs'. The SFO's task 'is to look at the evidence, decide there is a realistic prospect of conviction and decide if it is in the public interest to prosecute or not.'

He added: 'I can only recollect one case which has been dismissed because there was no case to answer. Once you are past that stage, our decision (to prosecute) has been vindicated.'

Mr Staple said the conviction rate this year has been running at about the same 65-70 per cent as last year, on a defendant-by-defendant basis. Of the two thirds who pleaded not guilty, roughly half were convicted.

Measured by cases, which often involve several defendants, he said there were very few where there was not at least one conviction. 'Provided one defendant, particularly the principal defendant, is convicted, then the bringing of a prosecution is entirely justified.'

Mr Staple added: 'We have learnt the lessons about the need to focus our indictments as narrowly as we can. Nobody is prepared to put up any longer with these very long trials at huge expense. We must make sure we do only charge people at the heart of these frauds and don't have trials with large numbers of people . . . We must also ensure that the indictments are focused on the offences which are at the heart of the fraudulent activity.'

The debate, he believed, had shifted away from the SFO to the legal framework. Early disclosure of the defence case is only one of a number of issues in this area.

Mr Staple is, for example, part of a powerful lobby for formal plea-bargaining to be introduced, which could avoid a contested fraud trial altogether.

A judge could tell a defendant the penalty for a plea of guilty, including sanctions enforced by City regulators. If the package was accepted by the defendant, subject to safeguards to prevent undue pressure, everyone could go home early. This is routine in the US.

Some lawyers are concerned at the potential for abuse of natural justice if this system is adopted, considering that the various City regulators have different records and unharmonised procedures.

Mr Staple did not see the present defects of regulation as a great obstacle to plea-bargaining, although he admitted that 'you would have to look very carefully at the system of penalties operated by each of the regulators before you could bring it into a plea agreement.'

A more immediate problem for the SFO is the renewed challenge mounted by the courts to its special powers to compel suspects to answer questions under Section 2 of the Criminal Justice Act.

Transcripts of Section 2 interviews are not admissible in a trial, unless the defendant in the witness box contradicts what was said under interrogation. But the SFO regards the interviews as vital to establish the full facts. Mr Staple said that otherwise 'you are very inhibited from finding out how the fraud took place', and there would be a 'much lesser chance of successfully investigating'.

Most Section 2 notices, of which there have been more than 3,000 in the last five years, are used to persuade banks and accountants to override customer confidentiality.

But a stipendiary magistrate ruled last week that Larry Trachtenberg, one of four charged with offences in the Maxwell case, did not have to answer questions under Section 2, despite a judgment by the House of Lords last year in the Wallace Smith case that backed the procedure.

Mr Staple said this would be appealed to the divisional court and could go to the Lords again. He said: 'We had thought that as a result of Wallace Smith our powers extended to conducting Section 2 interviews after charge. The magistrate has said in this case no. We are keen to see our powers defined as closely as possible, and that everybody knows what they are.'

Back at the SFO's headquarters in Elm Street, a short walk from London's Inns of Court, there is one small but significant organisational change looming. Mr Staple wants to mingle police, lawyers and accountants on the same floors in the nine-storey building.

The change is to combat cultural barriers between the professions. Mr Staple did not say as much, but they are well known to whinge incessantly in private about each other, and the SFO.

He is impressed by the Maxwell and BCCI incident rooms at the SFO, where the three cultures are mixed.

He said: 'When you go into these rooms it is very difficult to know which chap with his shirt sleeves rolled up is a policeman, accountant or lawyer. They share information in a more effective way and offer advice to each other.' So listen for the sound of desks being reshuffled.

(Photograph omitted)

Comments