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Anoushka Warlow

Partner, BCL Solicitors LLP

Annabell Hood

Associate, BCL Solicitors LLP

The dawn of the Ephgrave era: challenges and opportunities at the SFO

The dawn of the Ephgrave era: challenges and opportunities at the SFO

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Anoushka Warlow and Annabell Hood take a look at the issues faced by Nick Ephgrave, the incoming director of the Serious Fraud Office.

Nick Ephgrave, former assistant commissioner of the Metropolitan Police, is due to take the helm as the new director of the Serious Fraud Office (SFO) at the end of September. Ephgrave takes over from Lisa Osofsky, whose five-year term was marred by controversies, most notably her role in the agency’s bribery case against Unaoil. Ephgrave's appointment breaks the long-standing practice of appointing lawyers to the role. With extensive experience in policing and investigations, the ‘Ephgrave era’ is expected to herald an SFO in active pursuit of new investigations.

Osofsky has started to clear some of the decks for Ephgrave’s arrival, announcing the closure of two of the SFO’s longest running investigations to date, Rio Tinto and ENRC (the latter also being one of its most controversial). But Ephgrave will inherit several immediate and prevalent issues which he will need to confront and resolve. We take a look at his to-do list:

1.     Navigating Disclosure

The recent high-profile collapses of the SFO’s trials in Serco and G4S, and the quashing of three ‘unsafe’ convictions in Unaoil, demonstrate what appears to be a recurring inability of the SFO to manage its duties of disclosure in data-heavy cases.

Ephgrave will have experience dealing with disclosure in his policing career. However, in a 2018 article, he discussed the difficulties presented by the seizure of digital devices containing the equivalent of 30,000 pages of evidence. The SFO is a different league. In the Glencore investigation, the SFO reportedly reviewed over a million documents. The Rolls-Royce case contained over 30 million.

Osofsky advocated for reforms to the disclosure process in complex cases and the SFO is currently engaged in consultation on the topic. Recently, HM Crown Prosecution Service Inspectorate announced its own inspection into SFO disclosure processes. With disagreement as to the way forward, and calls mounting for a return to the pre-1996 ‘keys to the warehouse’ approach, Ephgrave will need to work out where he sits on this fundamental point and ensure that the SFO is not dogged by disclosure issues in the cases it has decided to prosecute.

2.     Deciding whether to prosecute individuals

Osofsky's tenure was criticised for prioritising corporate resolutions over holding individuals accountable. For example, in a significant success during her term, Glencore pleaded guilty to substantive bribery and failure to prevent bribery charges.

Given Fraser J’s sentencing remarks that senior Glencore individuals were "closely involved" in corruption, Ephgrave will be feeling the pressure to prosecute individuals and secure their conviction. The SFO has indicated its intent to decide whether to charge 11 former Glencore employees by the end of 2023. How Ephgrave chooses to act will be indicative of his direction for the SFO, which has thus far secured notably few individual convictions following corporate resolutions.

In one of her final decisions as director, Osofsky unveiled charges last week against four individuals connected to the collapse of Patisserie Valerie. Both cases offer Ephgrave an opportunity to lay the groundwork for restoring the agency's reputation as one which is capable of achieving individual convictions.

3.     Navigating incoming legislation

Ephgrave's tenure coincides with significant legislative changes. The Economic Crime and Corporate Transparency Bill will soon expand the 'identification doctrine' and also introduce a new corporate offence of failing to prevent fraud.

This could divert Ephgrave's attention towards corporate wrongdoing. While such an approach is likely to bring substantial gains to the Treasury through corporate penalties, he will be under pressure to ensure this is not at the expense of pursuing cases against individuals.

4.     Rebuilding trust and cultivating a positive culture

Ephgrave is no stranger to toxic organisational cultures, having faced similar challenges in the Metropolitan Police. Repairing the SFO's culture is a critical priority, as highlighted by Sir Calvert-Smith’s 2022 report. The agency has been plagued by high staff turnover and low morale. Improving working conditions and trust is essential for consistency and oversight in the investigation, disclosure and review processes.

5.     Setting the future of the SFO

Calls for the SFO to be folded into agencies such as the CPS or the NCA have been growing louder. The SFO's unique approach of having investigators and prosecutors working together, known as the 'Roskill model’, has faced increasing scrutiny in recent years.

While Ephgrave's position on such reform remains unknown, it is evident that he requires sufficient resources to both implement the recommendations from recent independent reports and demonstrate the model's effectiveness, ultimately safeguarding the SFO's status as an effective independent investigating and prosecuting agency.

Anoushka Warlow is a partner and Annabell Hood is an associate at BCL Solicitors.