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Disclosure a continuing blind spot for the Serious Fraud Office

Posted on 7 September 2022

On 5 September the Director of the Serious Fraud Office ("DSFO") Lisa Osofsky delivered a keynote speech at the Cambridge International Symposium on Economic Crime. In her speech, Ms Osofsky highlighted disclosure as being one of the SFO's "biggest challenges right now".  She went on to explain that while the SFO was working to improve its processes and policies "the current disclosure framework was designed before the advent of mass digital data". Ms Osofsky explained that this meant that the standard SFO case could fill up 22 London buses with documents running into many millions including complex digital data across different devices. She criticised the requirement under the current disclosure regime for manual review because of the amount of time this takes.

Ms Osofsky stated that the current disclosure requirements create a deep risk of human error which the defence can use to mount "tactical challenges" to SFO cases. Ms Osofsky cited the Serco case as an example of how such tactical challenges can lead to the collapse of a case that the SFO has worked and expended significant funds and resources on for a number of years.

This is the second time in recent months that Ms Osofsky has expressed her dissatisfaction with the current disclosure regime. In March, Ms Osofsky appeared before the Justice Select Committee to answer questions about a range of topics including high-profile problems that the SFO had encountered in the Unaoil and Serco cases.

In her evidence before the Committee, Ms Osofsky rejected the suggestion that a lack of experience or expertise within the SFO had led to the recent high-profile disclosure failures and instead pointed to the large volumes of evidence that the SFO had to manage within what she regarded as an antiquated disclosure regime. She called for a change in the rules that currently govern criminal disclosure, including to allow the SFO and defence to exchange evidence at an earlier stage in proceedings. Ms Osofsky's view was that the SFO was "operating in a data first world" with "rules from 1996". She noted that the rules do not "require… or even encourage" the defence to engage with the prosecution.

Surprisingly, Ms Osofsky continues to suggest that the disclosure challenges that the SFO has experienced in recent times are the result of the current criminal disclosure regime (as underpinned by the Criminal Procedure and Investigations Act 1996) rather than its own internal failures. There have been two separate reviews published this year - the Calvert Smith and Altman reviews - which suggest that the SFO needs to look inwards in order to resolve its disclosure problems.  

The Calvert Smith Review, which looked at the SFO's handling of the Unaoil case, concluded that the case team was insufficiently staffed and that compliance with the SFO's disclosure policies by SFO staff and particularly senior managers was ineffective. It found that the case team failed to maintain an updated disclosure strategy document and that inadequate resourcing of cases created serious issues in the disclosure process. The report also found that there was an "unfortunate focus on the effect that disclosure of the documents underlying the schedule might have on the DSFO, the SFO or other individuals". All of this points to operational and compliance deficiencies at the root of the SFO's disclosure failures, rather than the current disclosure regime itself.

Similarly, the Altman Review into the SFO's handling of the case involving two former Serco executives found that the staffing levels for the case were insufficient. The report found that the individual appointed to oversee the disclosure process on the case was too inexperienced to fulfil the role for such a large and complex case. In this case, the disclosure reviewers had access to an "embarrassment" of internal disclosure guidance documents but there was a question mark as to how much this guidance assisted them in their role. The review found that the defence teams in this case had engaged with the SFO to ensure that they were given material that passed the disclosure test and that this should have helped the SFO to ensure that targeted guidance on disclosure was given to reviewers. However this target guidance was not provided.

The Calvert Smith and Altman reviews make it clear that the SFO's internal policies and operational practices around disclosure must be improved and that the disclosure failures that occurred are the result of avoidable human errors. The two reports point to systemic flaws within the SFO's disclosure and decision-making process. It is therefore a mischaracterisation to suggest that the fault lies with the current disclosure regime itself. A lack of proper training, poor decision-making and under-resourcing culminated in the disclosure failures that occurred.

It is also worrying that the standard SFO cases are said to involve documents that can fill up 22 London buses. This suggests that the SFO may need to pursue a more intelligence-led approach to information gathering that does not generate unnecessary levels of material that it will struggle to manage. At present, the SFO does not appear to be capitalising on its advantageous position, whereby it both investigates and prosecutes its own cases, which in turn should make the disclosure process easier to manage.

The Attorney General's Guidelines on disclosure underscore that "Disclosure should be completed in a thinking manner". The SFO must give greater thought to compliance with its disclosure obligations which are a crucial part of the defendant's right to a fair trial. The latest version of the Attorney General's Guidelines on Disclosure also indicates how disclosure should be handled in cases that involve large amounts of material, including how such material should be sifted through for relevance, how it should be scheduled and how Disclosure Management Document should be prepared. The SFO needs to ensure that it has the requisite numbers of staff with the right level of experience and training allocated to its cases, and that there is proper oversight of its compliance with duties of disclosure. As a result, it would be less likely to fall foul of the longstanding disclosure regime within which every UK enforcement agency operates.

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