Nick Ephgrave’s first year as SFO Director

Nick Ephgrave QPM, the Director of the Serious Fraud Office (SFO), recently marked the end of his first year in office. Ephgrave has brought renewed energy, a renewed sense of purpose and a proactive approach to the SFO, opening six new investigations, improving staffing levels and significantly increasing the number of dawn raids and arrests. He has demonstrated ambition and innovation as he seeks to improve the culture, performance and reputation of an agency that has faced more or less continuous criticism since its establishment in 1988. However, as with all previous directors, Ephgrave’s ability to truly transform the SFO over the remainder of his tenure remains hamstrung by the perennial issue of limited funding.

Inevitable lag in impact of major legislative developments

Ephgrave’s first year coincided with the most radical legislative overhaul of the UK corporate criminal landscape in decades, but the real impact of this reform will not be felt for at least several years into the director’s term. The Economic Crime and Corporate Transparency Act 2023 (ECCTA) expands the SFO’s compulsory production powers in cases of suspected fraud or domestic bribery and corruption to the pre-investigation stage. It introduces a new offence of failure to prevent fraud and, most significantly, broadens the ‘identification doctrine’ – the main way in which criminal liability has been attributed to corporate entities in England and Wales – to include the actions of ‘senior managers’, rather than only those individuals who act as the company’s ‘directing mind and will’. These measures will help the SFO gather key evidence earlier, speed up case acceptance and make it easier to hold companies to account. As we saw following the introduction of the Bribery Act, however, the full impact of the changes, and particularly the new test for corporate criminal liability, will take some time to filter down into the SFO’s case load. We will have to look again at the SFO’s record under Ephgrave in 2026, at the earliest, to form a more reliable view, in particular whether the Director’s prediction that deferred prosecution agreements may ‘come back with a bit of a vengeance’ once the failure to prevent fraud offence comes into force.

Dynamic and innovative approach to case work

The SFO’s investigations have been characterised by dynamism under Ephgrave, with 17 arrests and dawn raids in four of the six investigations opened since he took charge, and it is hard to argue with his assertion that this aggressive approach imbues the investigations with much-needed momentum.

A developing criticism of the SFO’s case load under Ephgrave, however, is that it appears to reflect a shift towards domestic fraud with domestic victims and away from more traditional SFO cases of overseas bribery and corruption, and that these new fraud cases are in some way less serious or complex. Leaving aside that Ephgrave leads the Serious Fraud Office and that cases of fraud have been systematically under reported, under investigated and under prosecuted in the UK for at least a decade, there seems little substance to the assertion that high-value corporate collapses are somehow by default more straightforward to investigate and prosecute and less serious than overseas bribery cases.