The Davie Report — Anodyne for the SFO

Published date01 February 1995
Date01 February 1995
Pages89-91
DOIhttps://doi.org/10.1108/eb025682
AuthorRinita Sarker
JournalCrime Vol. 3 No. 1 Prosecution
The Davie Report Anodyne for the SFO
Rinita Sarker
'The public no longer believes that the legal
system in England and Wales is capable of
bringing fraudsters expeditiously and effectively
to book.'1
Eleven years and three government inquiries later,
the verdict and the solution, that of an independ-
ent Serious Fraud Office, remains apparently
intact. Rex Davie, a former Cabinet Office lumi-
nary, has recommended that the SFO should not
be merged with the Fraud Investigations Group
(FIG) of the Crown Prosecution Service (CPS)
much to the dismay of the police, CPS and media,
who have been anticipating the untimely demise of
the SFO for several months now. While providing
the SFO with a much needed morale boost, the
Davie Report, like its predecessors, acts more as a
temporary pain reliever than as a serious cure for
the problems of investigating and prosecuting seri-
ous fraud.
ON THE HORNS OF A DILEMMA
The Attorney-General is due to make an
announcement in March as to whether he accepts
the report's recommendations involving a tough
political balancing act. To abolish the SFO com-
pletely would be to admit defeat by the
Government and risk sending the wrong message
about fraud. On the other hand, vacillation in the
face of a barrage of public criticism at the SFO's
declining conviction rate, caseload and high-profile
failures, could prove an equally dangerous strategy.
FUTURE OPTIONS
The Davie Report considers three possible scenar-
ios.
First, a return to the pre-war situation of the
police as the traditional investigators of serious
fraud, secondly, a merger of the SFO into FIG,
and thirdly, the maintenance of an independent
SFO.
With regard to the first option, given limited
police success in the past, this was hardly a solid
foundation for the future. A merger with FIG was
advocated in 1994 by John Graham, currently
working for the CPS. It was submitted that this
would create a cost-effective administratively
streamlined organisation able to pool resources.
The Davie Report took the view, however, that
such a merger would not only create an anomalous
body within the CPS, contrary to the Phillips prin-
ciple of keeping investigation and prosecution
separate, but that it would also pose great organisa-
tional difficulties. Once again, it would be the
police who would take the primary role in inves-
tigation and prosecutions, a lead already rejected in
the first option. This left the final option of an
independent SFO, initially proposed in 1878 by
Lord Penzance, who criticised the ineffectiveness
of the criminal law in dealing with economic
crime and recommended a separate 'public func-
tionary' to maintain control of the financial
markets.
But how to solve the SFO's ever decreasing
caseload? George Staple, the SFO's Director,
claims the decline in referrals is a function of the
business cycle and a reflection of the downturn in
mergers in new issues. The SFO is currently
investigating 48 cases of complex fraud involving
£5.5bn, whereas its annual average should be 60
cases.
Its conviction rate has dropped from 71 per
cent to 63.6 per cent over the past two years, and
friction between police, lawyers and accountants at
the SFO led to communication via memo only at
some stages during the BCCI prosecution.2
LOOPHOLES IN THE
RECOMMENDATIONS
The Davie Report is similar to the Graham pro-
posals in that it is ambiguous and even half-baked
as to how its recommendations arc going to be
implemented in practice. For example, it suggests
that 'all cases of complex or serious fraud which
would benefit' from treatment by the SFO and its
powers should be passed to it by the CPS and
police, and that the financial criterion for reporting
cases to the SFO should be lowered to Elm (the
present financial criterion for acceptance is £5m).
Although this would indeed increase the SFO's
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