SFO needs better oversight of counsel

His Majesty’s Crown Prosecution Inspectorate (HMCPSI) has published a report following an inspection of the Serious Fraud Office’s (SFO) use of counsel at the pre-charge stage, revealing both effective practices and areas for improvement. While the report notes that the SFO has established effective systems and processes for engaging counsel, which has led to appropriate instructions and a focus on managing costs, it recommends bolstering these efforts with stricter oversight measures.

In the 2024/25 fiscal year, the SFO's spending on counsel fees reached £7.6 million, accounting for 8.9% of its net expenditure. The inspectors found that SFO staff understand the necessity of maintaining sound financial controls as part of effective case management. Moreover, their review highlighted that SFO engaged counsel appropriately with a clear rationale and considerations for cost-effectiveness, reflecting a commitment to financial prudence.

However, the inspectors identified several challenges requiring immediate attention. Notably, some counsel were instructed to address short-term internal resource constraints due to ongoing recruitment difficulties. Additionally, many business cases lacked specifics on tasks for counsel, and instructions were inconsistent across teams, undermining the SFO’s ability to demonstrate value for money.

Another significant issue raised was the SFO's reliance on a limited number of preferred counsel, which restricts diversity in counsel selection. Furthermore, the absence of a central record of counsel performance hampers informed decision-making regarding which counsel to engage in future cases.

Anthony Rogers, His Majesty’s Chief Inspector of HMCPSI, remarked, “The SFO is a specialist investigating body that tackles complex and serious economic crime. It is vital SFO builds robust cases, and that is why they must show a strong grip on how much they are spending on external counsel, demonstrate value for money, and that counsel positively contributes to strong cases.” He stressed that while the SFO’s current practices are effective, the implementation of the six recommendations proposed could significantly enhance performance and ensure better outcomes for the public and victims of crime.

The six recommendations include guidelines for staff on business case specifics for counsel instruction, revisions to the processes for authorising these business cases, and a comprehensive refresh of guidance for drafting counsel instructions. Additional suggestions include a mandate that all approved business cases are shared with the Finance team and the establishment of an external assurance process to verify consistency in counsel instructions and fees.

Susan Hawley, Executive Director of Spotlight on Corruption, emphasised the importance of refining the SFO's use of external counsel. "Getting the use of external counsel right is critical to the success of SFO investigations - from getting rigorous independent review of its early casework, to ensuring parity of arms against those it decides to pursue for complex corruption and fraud." She added that while progress has been noted, full implementation of the recommendations remains essential for fostering a diverse legal talent pool within the agency.

By adopting these recommendations, the SFO hopes to further enhance its approach to handling external counsel, thereby strengthening its investigations and securing greater accountability in addressing economic crime at a national level.