It has been a year since Lisa Osofsky’s tenure as director of the Serious Fraud Office (SFO) began. Practitioners noted that the SFO has been “going through a state of change” and was on “hiatus for the first six months of the tenure”.
Osofsky looked at ongoing investigations, taking a view as to whether they were worth pursuing. In this vein, the long-standing corruption investigation at Rolls-Royce and bribery allegations at GSK were dropped – moves for which the SFO was heavily criticised. One practitioner noted that the new director was indicating “the need to make decisions on historic cases”.
The SFO has also been using the new weapons in its armoury such as unexplained wealth orders (UWOs) and account freezing orders (AFOs). It has used the former new power four times since February 2018, with UWOs enabling the government agency to ask anyone with unexplained assets worth more than £50,000 to explain the source of the funds if their income appears insufficient. The SFO also recently successfully used its first AFO in March earlier this year, compelling a convicted fraudster to forfeit £1.5 million. The SFO’s first few uses of these resources provide an interesting insight into how it is likely to proceed in the future, in harnessing these new powers to combat serious crime.
Practitioners also reported an uptick in “larger expenditure on compliance” from companies, and a growing “need to help companies with these processes”. One practitioner noted, “Directors and senior people in businesses are taking their compliance responsibilities very seriously, and pre-emptively looking at issues before they become serious problems. This means there is planned compliance rather than prosecution.”
The legal market
Our research indicated an interesting blurring between the representation of individuals and corporations, with one practitioner adding: “It will come out during an investigation that a director needs individual advice also.” This demonstrates the importance of maintaining valuable client relationships.
Other sources added that the business crime space “used to be the premises for boutique firms”; now, however, there are “lots of firms who want to do this work and are recruiting practitioners”. Lawyers we spoke with noted that they are seeing “city firms and US firms recruiting to create a business crime offering rather than referring the work elsewhere”. Consequently, the market witnessed “lots of lateral moves in 2018” and a “revolving door of regulators moving into firms”. Such developments mean the “market is more competitive than it was five to 10 years ago”, with some sources describing it as a “saturated market” – but one that comprises a “cohort of strong people”.