The Serious Fraud Office (SFO) have a range of investigatory tools available to them but the most popular seem to be those in section 2 of the Criminal Justice Act (CJA) 1987 where they can search a property and compel persons to answer questions and produce documents.
Section 2:
“…(2) The Director may by notice in writing require the person whose affairs are to be investigated (‘the person under investigation’) or any other person whom he has reason to believe has relevant information to answer questions or otherwise furnish information with respect to any matter relevant to the investigation at a specified place and either at a specified time or forthwith.”
The SFO can only use this power if the Director finds reasonable grounds to suspect an offence has been committed involving serious or complex fraud or corruption.
The impact of a s.2 Notice
Written notice is always given by the SFO when they exercise the s.2 power.
Notices are typically issued to individuals, banks, financial institutions, accountants and other professionals, most of whom will have a duty of confidence to their clients. Issuing s.2 notices therefore obliges them lawfully to produce the material to the SFO.
Your rights to legal representation
When balancing the interests of the employee who is being interviewed and the company that is under investigation, the SFO is entitled to apply its own policy to determine whether the employee can have legal representation during a section 2 CJA interview.
Unlike interviews conducted at a police station, s.2 interviews do not come with the guaranteed right to have legal representation whilst questions are being asked of you and the SFO are not required to provide advance information before the interview, although they would provide in general terms the nature of the complaint. Police officers are not permitted to be present or conduct s.2 interviews.
It is unusual for a s.2 interview to be conducted for a suspect, this is because of the limitations of the use of the evidence obtained in this way but that is not to say that it doesn’t happen.
If you are served with a notice and you do not comply with it or when interviewed you are found to have given false or misleading information, you can be prosecuted by the SFO.
However, the answers given during the interview cannot be used in evidence against the interviewee (Mr X). Mr X cannot therefore be forced to incriminate himself as that would be a breach of the Human Rights Act 1998. (Saunders v UK 23 EHRR 313)
In circumstances where Mr X provides or recklessly provides false or misleading statements in interview then any answers given by Mr X can be used against him during proceedings issued against Mr X under section s.2(14) CJA 1987.
Alternatively, if evidence of the interview is adduced by the ‘defendant-Mr X’ during the main trial, the SFO have the right to apply to the Judge to include the contents of his interview for the purposes of cross-examination for inconsistencies during the trial before the jury.
The SFO can of course seek to conduct another interview under caution using powers in the Police and Evidence Act 1984 [PACE]. This will apply in circumstances where Mr X is no longer an interviewee but a suspect. During the interview the SFO can ask the same questions again to adduce the answers in evidence or to try to admit the answers from the s.2 interview.
During a PACE interview however, Mr X, the suspect, has amongst other things, a right to silence, a right to a solicitor and the right not to admit anything at all.
R (Lord and others) v SFO [2015] EWHC 865
The decision of R (Lord and others) in the High Court has recently approved the policy followed by the SFO for s.2 interviews.
The background to the Lord case is as follows;
During the SFO investigation of GlaxoSmithKline Plc (GSK) for possible acts of bribery and corruption the applicants, employees of GSK, were required to attend interviews conducted by the SFO.
When the applicants in the Lord case were notified that they were required for a s.2 interview they informed the SFO that they required the attendance of a solicitor of their choosing, who were the same solicitors for GSK during the investigation (the GSK solicitors).
The SFO, by letter, objected to the choice of their legal representation setting out their reasons.
The employees brought judicial review proceedings against the decision of the SFO to refuse the solicitor of their choice. On the papers their application for permission was refused and so they renewed their application by way of an oral hearing before the High Court of Justice.
At the oral hearing the SFO relied upon their Operational Handbook that set out the SFO policy on legal advisers at s.2 interviews.
It was the SFO’s ‘firm view’ that the content of the interview would be prejudiced if the GSK solicitors were instructed by the employees. The underlying issue was that the GSK solicitors would be obliged to tell GSK of the content of the interview and therefore the interests of the interviewees could be compromised for that of the company.
The Divisional Court did not find that the SFO decision was a blanket policy to allow them to prevent the employer’s solicitor to be present at any interview of an employee. Instead Lord Justice Davis considered that the policy would be applied on a case by case basis.
The SFO guidance does not bar an employee from having legal representation but suggests that best practice would be for the employee to have separate representation from the company.
The applicants sought to argue that despite the CJA 1987 not expressly providing for the right of legal representation there was an implied term in the common law that the individual could have their chosen lawyer present during the interview.
Davis L J, in delivering his judgment, did not agree with the applicants and held that it was ‘simply not a tenable argument’ to suggest that a common law right could be implied into the statute for representation.
The application by the employees for leave to judicially review was refused.
What are the practical consequences of the Lord decision?
The upshot of this decision is that the SFO policy, as currently in force, was found to be lawful and its application was not wrong provided it was proper and reasonable in the particular circumstances.
The starting point will be that, the SFO are not adverse to lawyers being present during the interviews provided that their attendance does not unduly delay or in any way prejudice the investigation and that they understand their role which is different from their role for interviews under caution with suspects. This will also mean that lawyers should consider any conflict of interest. The SFO point to the Law Society’s guidance provided for the Heath and Safety Executive to be applicable to them for conflict of interest assistance.
There is, of course, no obvious bar to the interviewee taking legal advice before the interview is conducted or to consult with them afterwards. As an interviewee, you may, therefore consider requesting a copy of the recorded interview from the SFO after the event, a right that is specifically provided for in the SFO Operational Handbook.
Companies going forward may want to consider separate representation for their employees to ensure that adequate legal advice can still be provided that protect Mr X from issues such as legal professional privilege and criminal sanctions that can arise from the CJA 1987.
As a side point, employees should be rest assured that the Secretary of State has approved the SFO as a ‘prescribed person’ for the purposes of the whistleblowing provisions in the UK. Therefore Mr X’s job within the company should not, ordinarily, be jeopardised as a consequence of the interview with the SFO, provided that, he believes the information is substantially true and concerns a matter within his area of responsibility.
The knock on effect of the High Court decision may lead to more companies considering separate legal representation for their employees compelled to answer the interview questions of the SFO.
Ultimately protecting Mr X will have a beneficial impact on the future of the suspected company.
The Serious Fraud Office (SFO) have a range of investigatory tools available to them but the most popular seem to be those in section 2 of the Criminal Justice Act (CJA) 1987 where they can search a property and compel persons to answer questions and produce documents.
Section 2:
“…(2) The Director may by notice in writing require the person whose affairs are to be investigated (‘the person under investigation’) or any other person whom he has reason to believe has relevant information to answer questions or otherwise furnish information with respect to any matter relevant to the investigation at a specified place and either at a specified time or forthwith.”
The SFO can only use this power if the Director finds reasonable grounds to suspect an offence has been committed involving serious or complex fraud or corruption.
The impact of a s.2 Notice
Written notice is always given by the SFO when they exercise the s.2 power.
Notices are typically issued to individuals, banks, financial institutions, accountants and other professionals, most of whom will have a duty of confidence to their clients. Issuing s.2 notices therefore obliges them lawfully to produce the material to the SFO.
Your rights to legal representation
When balancing the interests of the employee who is being interviewed and the company that is under investigation, the SFO is entitled to apply its own policy to determine whether the employee can have legal representation during a section 2 CJA interview.
Unlike interviews conducted at a police station, s.2 interviews do not come with the guaranteed right to have legal representation whilst questions are being asked of you and the SFO are not required to provide advance information before the interview, although they would provide in general terms the nature of the complaint. Police officers are not permitted to be present or conduct s.2 interviews.
It is unusual for a s.2 interview to be conducted for a suspect, this is because of the limitations of the use of the evidence obtained in this way but that is not to say that it doesn’t happen.
If you are served with a notice and you do not comply with it or when interviewed you are found to have given false or misleading information, you can be prosecuted by the SFO.
However, the answers given during the interview cannot be used in evidence against the interviewee (Mr X). Mr X cannot therefore be forced to incriminate himself as that would be a breach of the Human Rights Act 1998. (Saunders v UK 23 EHRR 313)
In circumstances where Mr X provides or recklessly provides false or misleading statements in interview then any answers given by Mr X can be used against him during proceedings issued against Mr X under section s.2(14) CJA 1987.
Alternatively, if evidence of the interview is adduced by the ‘defendant-Mr X’ during the main trial, the SFO have the right to apply to the Judge to include the contents of his interview for the purposes of cross-examination for inconsistencies during the trial before the jury.
The SFO can of course seek to conduct another interview under caution using powers in the Police and Evidence Act 1984 [PACE]. This will apply in circumstances where Mr X is no longer an interviewee but a suspect. During the interview the SFO can ask the same questions again to adduce the answers in evidence or to try to admit the answers from the s.2 interview.
During a PACE interview however, Mr X, the suspect, has amongst other things, a right to silence, a right to a solicitor and the right not to admit anything at all.
R (Lord and others) v SFO [2015] EWHC 865
The decision of R (Lord and others) in the High Court has recently approved the policy followed by the SFO for s.2 interviews.
The background to the Lord case is as follows;
During the SFO investigation of GlaxoSmithKline Plc (GSK) for possible acts of bribery and corruption the applicants, employees of GSK, were required to attend interviews conducted by the SFO.
When the applicants in the Lord case were notified that they were required for a s.2 interview they informed the SFO that they required the attendance of a solicitor of their choosing, who were the same solicitors for GSK during the investigation (the GSK solicitors).
The SFO, by letter, objected to the choice of their legal representation setting out their reasons.
The employees brought judicial review proceedings against the decision of the SFO to refuse the solicitor of their choice. On the papers their application for permission was refused and so they renewed their application by way of an oral hearing before the High Court of Justice.
At the oral hearing the SFO relied upon their Operational Handbook that set out the SFO policy on legal advisers at s.2 interviews.
It was the SFO’s ‘firm view’ that the content of the interview would be prejudiced if the GSK solicitors were instructed by the employees. The underlying issue was that the GSK solicitors would be obliged to tell GSK of the content of the interview and therefore the interests of the interviewees could be compromised for that of the company.
The Divisional Court did not find that the SFO decision was a blanket policy to allow them to prevent the employer’s solicitor to be present at any interview of an employee. Instead Lord Justice Davis considered that the policy would be applied on a case by case basis.
The SFO guidance does not bar an employee from having legal representation but suggests that best practice would be for the employee to have separate representation from the company.
The applicants sought to argue that despite the CJA 1987 not expressly providing for the right of legal representation there was an implied term in the common law that the individual could have their chosen lawyer present during the interview.
Davis L J, in delivering his judgment, did not agree with the applicants and held that it was ‘simply not a tenable argument’ to suggest that a common law right could be implied into the statute for representation.
The application by the employees for leave to judicially review was refused.
What are the practical consequences of the Lord decision?
The upshot of this decision is that the SFO policy, as currently in force, was found to be lawful and its application was not wrong provided it was proper and reasonable in the particular circumstances.
The starting point will be that, the SFO are not adverse to lawyers being present during the interviews provided that their attendance does not unduly delay or in any way prejudice the investigation and that they understand their role which is different from their role for interviews under caution with suspects. This will also mean that lawyers should consider any conflict of interest. The SFO point to the Law Society’s guidance provided for the Heath and Safety Executive to be applicable to them for conflict of interest assistance.
There is, of course, no obvious bar to the interviewee taking legal advice before the interview is conducted or to consult with them afterwards. As an interviewee, you may, therefore consider requesting a copy of the recorded interview from the SFO after the event, a right that is specifically provided for in the SFO Operational Handbook.
Companies going forward may want to consider separate representation for their employees to ensure that adequate legal advice can still be provided that protect Mr X from issues such as legal professional privilege and criminal sanctions that can arise from the CJA 1987.
As a side point, employees should be rest assured that the Secretary of State has approved the SFO as a ‘prescribed person’ for the purposes of the whistleblowing provisions in the UK. Therefore Mr X’s job within the company should not, ordinarily, be jeopardised as a consequence of the interview with the SFO, provided that, he believes the information is substantially true and concerns a matter within his area of responsibility.
The knock on effect of the High Court decision may lead to more companies considering separate legal representation for their employees compelled to answer the interview questions of the SFO.
Ultimately protecting Mr X will have a beneficial impact on the future of the suspected company.
