SFO’s Strategy for 2024-2029 – New Emphasis for the SFO

The UK’s Serious Fraud Office (SFO) has unveiled its strategy for 2024-2029.  The Strategy reads rather more clearly and concisely than many corporate vision-statements of this sort, perhaps reflecting the pragmatic approach of the new Director, Nick Ephgrave QPM. There is considerable , and laudable, emphasis on values, technology and attracting “the brightest and best”.   Here are some of the more interesting highlights:

ECCTA and Increased Investigatory Powers

Previous SFO Directors have strongly advocated for law reform, in particular extending the ambit of corporate criminal liability. In late 2023 the SFO finally caught the car, in the form of the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”). ECCTA provides for a new Failure to Prevent Fraud offence which extends vicarious liability to companies as regards a wide range of offences and is likely to come into force in 2024. ECCTA also changes to the scope of corporate liability more generally.

It is notable that the new Strategy has not given much airtime to these important legislative wins for the SFO. There are no predictions of a new dawn for corporate enforcement or the like. The Strategy says that the SFO will  “strengthen our operations through the deployment of new powers such as the new “failure to prevent fraud” offence”. But that is about it. No mention is made either of the expansion of the SFO’s investigatory powers under ECCTA, which now can be used in any SFO investigation, not just bribery cases. It may be that expectations for the consequences of the new law are now being managed.  

Whistleblower Incentives?  

The SFO teases an “exploration” of providing whistleblowers with “incentives”. We think this means paying whistleblowers compensation or some percentage of money recovered in cases where their evidence has been critical, a practice which is well established in the US.  However, such a policy is likely to require primary legislation in the UK and whether it obtains the necessary political traction remains to be seen.

Enhanced Cooperation

The SFO makes clear its appetite for greater cooperation with other agencies.  At least three of the SFO’s recent investigations have involved collaboration with another UK law-enforcement agency, the National Crime Agency (NCA).  The SFO is also said to be fostering stronger ties with the Organisation for Economic Co-operation and Development (OECD) and other international bodies, in order to enhance its operational capacity. Initiatives include a secondment programme and specialised training for both domestic and international partners, aiming to strengthen these alliances.

Increased Intelligence and Enforcement

The SFO states its intention to expand its intelligence operations and enhance undercover efforts. It remains to be seen whether evidence gathered covertly will make a difference to many cases.

Harnessing Technology

It seems that no corporate strategy document may now be published without reference being made to AI. The SFO Strategy does not disappoint. It rightly recognises the critical role of technology in the world of fraud in particular. The SFO intends to trial new tools and enhance the use of machine learning and artificial intelligence, and to implement a new case-management system.

More Focus on Domestic Fraud?

Although this is not express within the Strategy document itself, it appears that there is a renewed emphasis within the SFO on domestic rather than international fraud and bribery cases. The Strategy states that “almost all of our cases have an international element” and that  “we are a proactive, authoritative player in the global and domestic justice system”. However, it is striking that, since September 2023, the SFO has announced five new investigations, all of which are centred on large-scale domestic (i.e. UK-based) fraud. Historically, the SFO has had a more international focus, recently using Deferred Prosecution Agreements (DPAs) to secure large settlements for overseas bribery offences.  But international cases are hard to investigate and even harder to convict. A change in focus would have the practical benefit for the SFO of avoiding the complexities of overseas evidence- gathering and extradition, and thus should speed up average times for resolution of cases.

Recruitment and Retention

The SFO’s greatest asset is its staff – it is fortunate to employ many skilled and dedicated public servants. However, the SFO has long recognised the need to improve recruitment and retention. On this, the SFO Strategy is optimistic, although more than a little vague.

The SFO is not giving up on Lord Roskill’s original model of integrated teams of investigators and prosecutors. Various “up-skilling” measures are promised, including setting clear expectations for skills and competencies, creating a five-year strategic workforce plan, establishing an in-house academy, and upgrading HR support to attract and retain top talent.

What about increasing salaries?  The private sector seems to think pay is pretty important in recruiting what the Director calls “the brightest and best”.  Apparently the SFO will “provide additional support to staff by designing a new Employee Value Proposition and developing our overall benefits package”. It’s not very clear what this means in practice. The hope must be that the government will recognise the unique difficulties faced by the Serious Fraud Office (and, we would also argue, the Financial Conduct Authority) in competing for talent with private practice firms and provide for significant real-terms pay increases for key staff.  Until that happens the SFO will not be as strong as the UK needs it to be. 

Article co-authored by Xenia Baranova, Trainee Solicitor at CMS