On 16 June 2022, we were delighted to host an evening of discussion, 'Time for Change? Public-Private Collaboration Against Financial Crime', at our London offices. The discussion drew on the titular report by Professor Jason Sharman, the Sir Patrick Sheehy Professor of International Relations at Cambridge University. The report is available to read here.
The event opened with Mishcon de Reya's Catherine Rogerson interviewing Professor Sharman about his findings and recommendations.
This was followed by a panel discussion debating various aspects of public-private collaboration in tackling financial crime. Professor Sharman was joined by Lord Agnew of Oulton DL, former Minister of State at the Cabinet Office and Her Majesty's Treasury and current member of the House of Lords; Helena Wood, Senior Research Fellow at RUSI; and James Mather, Barrister at Serle Court Chambers. The panel was moderated by Mishcon de Reya's Gareth Minty.
Following audience polling showing 100% of attendees agreeing that change was needed, Professor Sharman began by describing an unsatisfactory status quo where a high volume of financial crime has enabled many criminals to keep their ill-gotten gains. He emphasised the need to establish an effective deterrent in order to make significant reductions in financial crime and the value of civil law remedies and private criminal prosecutions. Citing the increased availability of litigation funding and the changing attitudes to the involvement of for-profit entities in fighting financial crime, Professor Sharman viewed the current environment as an opportunity to be seized when it comes to facilitating greater public-private collaboration in the future.
The panellists discussed the importance of a solutions-orientated approach, providing best value for the taxpayer and explored several key ideas to delivering gains in revenue recovery. These included an accessible, open-source HMRC register of trusts, the creation of an economic crime-fighting fund and a new office for the protection of whistleblowers.
Potential benefits of adding private sector expertise to public sector economic crime investigations were identified, such as applying a commercial mindset to the process of case selection and review and a more effectively directing resources to genuinely viable investigations.
Panellists also explored the potential policy and practical challenges of public-private collaboration. This included potential conflicts of interest that could arise for law firms providing such advice and how those could be addressed, together with the implications of such an approach when it comes to the level of compensation available to victims.
Whilst the discussion focussed on how best to balance these political, practical and perceived risks against potential benefits, including the ongoing question of future public sector resourcing, the panel recognised that it may ultimately come down to a stark choice between leaving assets with criminals or adopting a collaborative model with some inherent limitations.
Exploring the topic of litigation funding, the panel identified its suitability in asset recovery. In respect of public sector litigation, no prohibitive reason was raised as to why the terms of funding agreements could not be tailored to the public sector's particular requirements or, indeed, why the Government itself should not create its own asset recovery fund. Discussion envisioned the public and private sectors working in tandem with a funding model that would encourage the pursuit of viable cases of fraud and international corruption with recoveries from one case being used to fund work on the next one.
As the event drew to a close, audience member Anthony Peto QC of Blackstone Chambers provided his thoughts on a potential pathway forward, describing a model in which state agencies, which are empowered to bring actions for the civil recovery of proceeds of crime such as the National Crime Agency , could refer to a panel of expert law firms with experience of recovering assets in High Court civil litigation . Lawyers would then consider a selection of cases with identifiable assets that might be suitable for litigation funding and the use of civil remedies. With the Proceeds of Crime Act 2002 given as an example, Mr. Peto QC highlighted that it’s provisions for civil recovery had been underused but that its considerable powers could be deployed effectively against criminals to deprive them of their ill-gotten gains with the specialist expertise available from within the private sector. Mr. Peto QC said that there were plenty of public-spirited lawyers in the private sector who were willing to help the government recover the proceeds of crime. The key driver, as Mr Peto QC put it, in developing public-private collaboration against financial crime is simply the question of having the will.
Hugo Plowman, Head of the Fraud Group at Mishcon de Reya, agreed, stating: "if we can garner sufficient political will to make this happen, the private sector is standing by to deploy its resource, expertise and funding to help combat financial crime."
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