It is still too early to say whether the disclosure failure resulting in the collapse of the Serco case arose from disclosure complications of the DPA process itself, or was a stand-alone issue.
However, what can be said with certainty, and evidenced from general disclosure issues arising in proceedings following the SFO’s DPA with Sarclad and the DPA with Tesco, is that the DPA process can cause (sometimes unforeseen) subsequent general disclosure tensions and complications to arise that (i) require careful navigation and (ii) are ripe for challenge.
What happened in the Serco case?
Monday 26 April 2021 brought news that the SFO’s prosecution against two Serco executives had collapsed. Neil Williams, solicitor in Gherson’s white-collar crime department has been commenting on this, and was featured in the Times and Compliance week.
The trial follows a 4 July 2019 final-approvement for a DPA between the Serious Fraud Office and Serco relating to three offences of fraud and two of false accounting arising from a scheme to dishonestly mislead the Ministry of Justice as to the true extent of the profits being made between 2010 and 2013. The SFO’s announcement was accompanied by an SFO statement stating that:
“SGL engaged in a concerted effort to lie to the Ministry of Justice in order to profit unlawfully at the expense of UK taxpayers. The SFO will pursue those who engage in this sort of criminal conduct so that they are held to account”.
True to their word, following the agreed DPA it was announced that on 16 December 2019 the SFO charged two individuals with fraud, Simon Marshall, former Operations Director of Field Services, with three counts of fraud in relation to representation made to the Ministry of Justice between 2011 and 2013, and Nicholas Woods, former Finance Director of Serco Home Affairs, charged with one count of fraud in relation to representation made to the Ministry of Justice in 2011.
It is in relation to the charges against these two individuals that the SFO’s case has now collapsed.
The SFO has previously failed to secure charges against individuals in relation to conduct for which a corporate has accepted criminal liability. Following a DPA with Rolls Royce the SFO subsequently ceased its investigation into individuals, following a DPA with Tesco the trial against individuals was stopped following half-time submissions, and following a DPA with Sarclad, three individuals were acquitted following a trial.
DPA and disclosure generally
It goes without saying that managing the disclosure process in any large-scale complex investigation is a mammoth task for both sides. However, managing the disclosure process through a DPA and through proceedings subsequent to a DPA can mean addressing additional complications. For the very process of managing, negotiating and concluding the DPA can cause disclosure issues and tensions to arise in subsequent proceedings (including the potential prosecution of individuals) and which will require very careful navigation.
Whilst conducting and negotiating through the DPA process the SFO will therefore need to have a keen eye, and a degree of foresight, to ensure continued compliance with any disclosure obligations that arise, and just as importantly, that may arise subsequently. This is an area ripe for challenge by expert lawyers.
Indeed, general disclosure issues arose following both the Sarclad and the Tesco DPAs.
Sarclad – SFO duty to obtain and disclose documents
As noted above, having entered into a DPA with Sarclad in 2016, the SFO subsequently charged individuals. One of these individuals sought disclosure of his interview notes from an interview with Sarclad and when the SFO refused, issued a claim and began judicial review proceedings against the SFO’s failure to obtain and disclose the notes. This judicial review concerned the extent to which the SFO, in fulfilling its disclosure obligation towards a defendant in criminal proceedings, is under a duty to obtain and disclose documents from a company with which it has entered a DPA.[1] Ultimately, the SFO was criticised for its decision not to pursue the request for disclosure and the High Court (had it been the right venue for the claim) would have quashed the decision of the SFO.
Tesco – conflict between confidentiality and disclosure
This case does not concern criminal proceedings but highlights another issue that can arise regarding the disclosure of documents following the DPA process. In this case the Court ordered disclosure in civil proceedings of documents which the SFO had obtained using their Section 2 Criminal Justice Act 1987 powers and disclosed to Tesco in confidence as part of the DPA process (i.e. documents that Tesco would not ordinarily have been able to obtain). In this case Tesco was conflicted and found itself caught between the obligation of confidentiality imposed by the DPA process, and the subsequent obligation to give full and proper disclosure arising in the civil proceedings.
Conclusion – do you have any questions regarding DPA (or DPA related) proceedings?
Managing, negotiating and navigating the DPA process (including disclosure), subsequent proceedings or indeed proceedings which have a DPA angle, requires extensive expertise and experience as there are plenty of potential areas to challenge.
Gherson’s white-collar crime team comprises individuals who have experience negotiating on both sides of the DPA process, and in subsequent proceedings, and can therefore offer insightful and expert advice.
Join Gherson’s mailing lists to stay connected with the latest on this story or alternatively follow us on twitter.
[1] The court also considered that Sarclad was under a duty to disclose the notes under its duty to cooperate as part of the DPA;.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2021