Law: Squeeze on the white collars: Despite the Levitt case, some lawyers believe the Serious Fraud Office's powers are draconian. Jenny Grove reports
Friday 10 December 1993
In view of the penalty imposed on the City fraudster Roger Levitt, this may seem like hair-splitting, but a community service sentence is not typical of the outcome of highprofile white-collar criminal trials as a whole. The SFO has a conviction rate of about 70 per cent and its prosecutions resulting in prison sentences this year include John Ferriday of Eagle Trust, jailed for six years; Anthony Dobson of Homes Assured, whose company encouraged council house tenants to buy their homes (five-and-a-half years); and Syed Akbar, who pleaded guilty to false accounting involving BCCI (six years).
Some solicitors see the SFO's exceptional powers, in particular under Section 2 of the 1987 Criminal Justice Act, as draconian and tending to curtail civil liberties. Unlike murder suspects, people facing investigation by the SFO have no right to silence and can be jailed for six months for refusing to answer questions or produce documents without 'reasonable excuse'. True, statements made under Section 2 can be used in court only if the person making them gives contradictory evidence in the witness box. But compulsory interviews with Department of Trade inspectors can be quoted freely in court by prosecuting counsel without even that qualification.
In the past three years, what one observer calls the 'Excalibur-like' powers of Section 2 have been reinforced by the SFO's ability to obtain transcripts of interviews between suspects and liquidators, receivers or administrators in largescale insolvencies. An effort to resist the trend is the pending appeal to the House of Lords by Muhammad Naviede, who is trying to prevent the liquidator of his finance company, Arrows, handing over such material to the prosecutors. To date, all such issues before the courts have been decided against the defendant.
John Clitheroe, of the City solicitors Kingsley Napley, says that interviews under Section 2 can be ill-defined and prolonged. 'They can occupy the better part of a year, without any clear-cut indication to defence lawyers of exactly what the SFO are looking for.' Recent decisions by the Law Lords have also enabled the SFO to continue to interview somebody who has already been charged. 'It's unlike any other sort of criminal offence, where once you've charged somebody, you cease questioning them.' Critics are also aggrieved by the SFO's 'dawn raid' arrests, which, they claim, are uncalled for and executed with gung-ho glamour in the glare of publicity. After early-morning arrests at the homes of the Maxwell brothers in June 1992, Kevin Maxwell's wife, Pandora, pointed out that the media circus had taken place despite defence lawyers' offers to bring her husband to the SFO for questioning at any time.
The SFO denies tipping off the press on such occasions, but critics doubt the disclaimer. Press photographers took pictures of SFO dawn raids on companies associated with Asil Nadir in the autumn of 1990, at the stockbrokers T C Coombs in December 1990, and the Maxwell arrests. Soon afterwards the Bar Council called for guidelines to end the practice of tip-offs to the media. George Staple, director of the SFO, says he was not aware of his office tipping off journalists. Some defence lawyers also believe that, in dealing with the SFO, a major limiting factor on the defence is money. Monty Raphael, of the solicitors Peters & Peters, says: 'In a legal aid case, the solicitor has to put together a dedicated team. You must invest in staff and premises, then pray you recover the investment on the taxation of your legal aid costs. Then you pray you won't go bankrupt while you're waiting for payment, which is often made in stages.'
A legally aided defendant is limited to two counsel. 'It's too few in a complex case. If you want to use more you can only do so if the additional barrister is a specialist consultant who can only give an opinion,' Mr Raphael says. He also thinks defence teams are further handicapped because, although the SFO has accountancy help from day one, the legal aid authorities are slow to recognise an equivalent need on the defence side, which can mean months' delay before accountants can be brought into the team.
Access by the defence to documents held by the SFO is another cause of concern. Stephen Solley QC says great skill is needed to ensure the defence gets from the prosecution all it is entitled to. 'Sometimes liquidators have masses of material that the defence ought to see but which is not handed over without a fight,' he says.
However, a solicitor who prefers not to be named is more sanguine. 'Provided you're not scared to demand things when you know you're entitled to them and you're not scared to press the SFO when you're in the right, you shouldn't encounter any problems,' he says. Even so, he admits the SFO's attitude tends to be 'here's a room full of unused material, get on with it]' This lack of cataloguing imposes a tremendous burden on the defence, he says. 'You can't flick through things. If you do, you'll miss the document that's relevant.' He adds that the SFO's attitude can unintentionally be helpful. 'They sometimes miss things that are highly significant,' he says.
There has been talk of defence lawyers banding together to form a pressure group, but the idea has yet to catch on, perhaps because, as Mr Clitheroe says: 'We tend to be idiosyncratic, individualistic people, although we do exchange ideas in the interests of our clients.'
But Mr Solley argues in favour of a more formal association, pointing out that the defence in a particular case could have a formidable victory on a point of evidence or procedure that might go unnoticed. Defence lawyers should band together and exchange information, he says. 'It's of great advantage to the SFO to divide and rule.'
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