Two months in and the Serious Fraud Office ("SFO") has already begun to set the tone for 2025 as a 'year of firsts'. Fast out of the gate, the SFO has obtained its first ever Unexplained Wealth Order, has been given the green light to apply to the Court to deal – for the first time – with a breach of a Deferred Prosecution Agreement, and has said it wants to be the first to bring a prosecution under the statutory provisions which will come into force later this year introducing a new corporate offence of Failure to Prevent Fraud.
All of this might be evidence of the "bolder, more pragmatic, more proactive" SFO that Nick Ephgrave talked about when he took the helm as Director in late 2023; an SFO that, in Mr Ephgrave's words, would not shy away from "new tactics, new methodologies".
With one full year under his leadership, BCL's Business Crime team look back at the SFO's actions throughout Mr Ephgrave's tenure so far, and think about what might be to come.
Kicking doors down and closing others
Nick Ephgrave was appointed as Director of the SFO in September 2023, having previously worked as assistant commissioner of the Metropolitan Police Service. He was handed a somewhat beleaguered and lethargic agency; still bruised and picking up the pieces from the high profile (and fatal) disclosure failures which had plagued the Unaoil, G4S and Serco prosecutions during his predecessor, Lisa Osofsky's, tenure.
It was hoped that Mr Ephgrave's background as a law enforcer, rather than lawyer, might mean a more proactive and prosecution-focused SFO. And indeed, in his first public speech in the role, Mr Ephgrave signalled his intention to speed up the period between investigation and prosecution, including through the use of dawn raids, which can quickly lead to interviews and begin critical evidence gathering: "[it] gets people in an interview room, you look them in the eye and start asking questions, put them under some pressure, search the house, crack the evidence, why wait?".
True to his word, by February of 2024, Ephgrave announced that the SFO had "gone through more front doors in the last three months than in the last three years".
2024 was, as such, a busy year for new investigations. In its annual report, the SFO confirmed that between April 2023 and March 2024 it had commenced six new investigations, searched 15 sites and arrested 15 individuals. Notable new investigations include: Thales Group, Signature Group, Carlauren Group and Timeshare Legals Ltd. Whilst the numbers demonstrate an active SFO, it is notable that all but one of the investigations commenced during Mr Ephgrave's tenure (and made public) relate to suspected offences of domestic fraud. Whilst the trend away from large international bribery and corruption matters might indicate a conscious effort to focus on those cases which most impact ordinary citizens and therefore (arguably) best serve the public interest, it might also be symptomatic of a loss of confidence in dealing with disclosure in large, cross-border, bribery matters (considered further below).
In terms of freeing up resources to dedicate to these new investigations, the SFO's annual report indicates six investigations were closed in the 12-month period up to March 2024 (including the SFO's four-year corruption probe into Bombardier).
Most notably, in her final months as Director, Ms Osofsky confirmed the closure of its long-running investigations into ENRC. The SFO still cannot, however, put the matter behind it. In September 2024, the SFO failed in its attempt to appeal a 2022 ruling of the High Court, which had ruled in favour of ENRC in its civil claim against the SFO and its own former lawyers. ENRC had claimed that the SFO had failed to conduct itself properly, including by entering into unauthorised contacts with its lawyers. In a sobering ruling, the High Court found that the SFO had engaged in "bad faith opportunism" by encouraging ENRC's lawyer to breach his firm's contract with ENRC through its inappropriate contact with him.
The failure to overturn the ruling on appeal is no doubt as disappointing for the SFO as it will be costly. The matter will now proceed to a trial to consider the damages due to be paid by the SFO to ENRC, and the SFO's annual accounts (published July 2024) show a provision of £231 million to cover potential damages, an amount twice as large as the agency's budget. The SFO has already been ordered to pay more than £12 million to ENRC in respect of its costs, as well as swallowing its own costs in fighting the litigation (a reported £10 million).
Thankfully (perhaps) for the SFO, separate proceedings brought by ENRC against the agency and individuals connected to it which alleged that the SFO had leaked information to the media during its investigation, and which were due for trial in October 2024, settled at the courtroom door. The terms of the agreement are confidential.
Charges, charges, charges
Whilst the ENRC-saga continues in the background, the SFO has sought to fill the foreground with news of charging decisions.
2024 started strongly for the SFO with charges announced in January against two individuals in the Raedex Consortium investigation. Each was charged with three counts of fraud in relation to a car leasing scheme and the trial is set to start in September 2026.
But, more excitingly, 2024 also provided the answer to the long-awaited question: would the SFO bring charges against individuals in the Petrofac and Glencore investigations?
The SFO has long been criticised for its apparent inability to obtain individual convictions following admissions of criminal wrongdoing made by corporate entities. As such, and since the guilty pleas entered by Petrofac and Glencore to bribery offences in October 2021 and June 2022 respectively, all eyes have been on the SFO to see whether it would deliver individual prosecutions and convictions.
It was big news, therefore, when the SFO announced in February 2024 that two former executives of Petrofac had been charged with bribery offences in relation to the award of contracts for oil facilities. It was even bigger news when, in August 2024, the SFO confirmed that six individuals had been charged with conspiring to make corrupt payments to benefit Glencore's oil operations in West Africa. Trials have been fixed for late 2026, and 2027, respectively.
Finally, just as the curtain was closing for 2024, the SFO announced that five people had been charged following an investigation into the collapsed law firm Axiom Ince. The charges include fraud, forgery and the destruction of documents. The trial is due to commence in February 2027 (one defendant has entered a not guilty plea; the remaining defendants are yet to be arraigned).
The SFO's investigation into Axiom Ince commenced in October 2023, with raids and arrests taking place in November 2023. The SFO's ability to make charging decisions just 13 months later clearly demonstrates Mr Ephgrave's commitment to delivering faster investigations. In a comment, he said "we have conducted a thorough and targeted investigation in record time to bring these charges". The key here is 'targeted' and may provide some indication as to the SFO's way forward – more focused investigations, rather than the 'leave no stone unturned' approach which produces largescale, sometimes unwieldy, and lengthy probes.
But at trial...things end with a fizz not a bang
Charges are, however, only the first step. The upcoming trials of the individuals in the Petrofac and Glencore investigations offer the SFO an important opportunity to demonstrate that it can live up to its raison d'etre and successfully prosecute high-value, cross-jurisdictional, complex bribery and corruption cases.
The SFO's track record in this regard is not exactly enviable, and 2024 did little to improve the picture. Last year's highest profile trial was the re-listed trial in the SFO's long-running investigation into GPT Special Project Management Limited ("GPT") which was first opened in 2012. Following the company's guilty plea to corruption in April 2021, Jeffrey Cook (GPT's former managing director) and John Mason (a part-owner of a subcontractor to GPT) were charged with corruption in relation to alleged bribes paid in connection with contracts of work for the Saudi Arabian National Guard.
The trial originally took place in 2022, but the jury were discharged halfway through (reportedly as a consequence of further information coming to light). Following the SFO's decision to pursue the case after its original collapse, Cook and Mason were acquitted of corruption in March 2024. The SFO made big headlines of the fact that Cook was convicted of the lesser offence of misconduct in public office in relation to commissions he received. Nevertheless, the failure to achieve individual convictions on the corruption charges means that the SFO can add GPT to the long list of investigations in which it has failed to secure convictions against individuals for the precise criminality already admitted by the relevant corporate entity.
2025
What can we expect for the SFO in 2025?
With no trials reported for 2025, the SFO has some time to prepare for what is shaping up to be a heavy case load in 2026, including trials in the Raedex Consortium, Ethical Forestry Limited, Patisserie Holdings PLC, Petrofac and London Mining investigations. The Glencore trial is listed for 2027.
But whilst preparation for those trials goes on, the SFO has shown no sign of slowing down the momentum gathered throughout 2024.
A new toolkit?
In January 2025, the SFO obtained its first ever Unexplained Wealth Order ("UWO"). UWOs are not by any means a 'new' tool, having been first introduced through the Criminal Finances Act 2017.
UWOs can be used by enforcement agencies to compel respondents to explain the origin of assets where there are reasonable grounds to suspect that the assets appear disproportionate to the respondent's income; or that they have been obtained through unlawful conduct.
Despite having been available for almost 8 years, the only agency to use UWOs (with mixed results) has been the National Crime Agency. The SFO's use of a UWO – obtained against Clare Schools, the ex-wife of convicted solicitor, Timothy Schools, who was sentenced to 14 years in prison in 2022 for his role in a fraudulent investment scheme – signals the SFO's appetite to make use of the broad range of enforcement tools available to it, and reach beyond its traditional comfort zone.
With the SFO gaining confidence with new methodologies, it may be that 2025 sees the SFO also make good use of some of the new provisions enacted through the Economic Crime and Corporate Transparency Act (2023) ("ECCTA").
First, new provisions within the ECCTA have expanded the SFO's so called 'Section 2A powers', to include all SFO cases (Section 211 of ECCTTA). It was reported that these new powers were used for the first time in early 2024. Under the new provisions, the SFO can compel individuals and companies to provide information at a pre-investigation stage, thereby giving the SFO access to information at a much earlier juncture. (Previously, the powers were granted pursuant to section 2 of the Criminal Justice Act 1987, and could only be used following the SFO Director's decision to commence an investigation where there are 'reasonable grounds to suspect' that a crime (serious or complex fraud, bribery or corruption) has taken place. This power was later extended to pre-investigation in cases of suspected international bribery and corruption). This legislation is likely to be a critical tool for the agency, allowing it to extract key evidence faster, and accordingly speed up the investigation process.
Second, the ECCTA also extended the 'identification doctrine'. Under the identification doctrine, a company can only be held criminally liable in common law where it can be proved that a person representing its 'directing mind and will' committed the offence. The doctrine has long made it difficult to hold companies – particularly large companies with complex decision-making structures - to account.
The ECCTA reforms the identification doctrine for certain economic crimes, including fraud and bribery and money laundering (Schedule 12 of ECCTA), and puts the regime on a statutory footing. The legislation creates a statutory mechanism to attribute criminal liability to a corporate entity through the actions of its "senior managers" where they act with the actual or apparent authority of the corporate. The definition of 'senior manager' is wide and includes those "who play a significant role in the making of decisions about how the whole or a substantial part of the activities of the body corporate...are to be managed or organised" (Section 196 of ECCTA).
Finally, the most substantial 'new' tool available to the SFO is set to come into force later in the year. We have written previously about the ECCTA's creation of a new corporate criminal offence of Failure to Prevent Fraud, the implementation of which was delayed pending the publication of Guidance on how the new offence (and its defences) would operate. The long-awaited Guidance was published on 6 November 2024, alongside confirmation that the offence would come into force on 1 September 2025.
The new corporate criminal offence enables prosecutors to hold large organisations to account where the organisation fails to prevent its associated persons from committing fraud (where the fraud has the intention of benefiting the organisation).
As with the other 'failure to prevent' offences, a statutory defence is available where a company can show it had 'reasonable' procedures in place to prevent the fraud. What is "reasonable" will differ from organisation to organisation. The published Guidance directs companies to follow six principles: (i) top level commitment; (ii) risk assessment; (iii) proportionate, risk-based prevention procedures; (iv) due diligence; (v) communication; and (vi) monitoring and review. For more analysis see our previous articles discussing the Guidance and its impact.
Whilst possibly helpful in giving a general framework for companies to work towards, the Guidance is clear that it is not a 'safe harbour': "even strict compliance with the guidance will not necessarily amount to having reasonable procedures where the relevant body faces particular risks arising from the unique facts of its own business that have not been addressed."
Despite the Failure to Prevent Fraud offence being modelled on existing offences of Failure to Prevent Bribery (s. 7 of the Bribery Act 2010) and Failure to Prevent the Facilitation of Tax Evasion (s.45 Criminal Finances Act 2017), these parallels offer little assistance. Although both offences have existed on the statute book for many years, neither has generated any meaningful judge-led guidance on how the 'reasonable procedures' defences work in practice, or how they will be interpreted in contested criminal proceedings. But, with the offence soon to come into force, and with Mr Ephgrave enthusiastic to use it, relevant companies caught by the statutory provisions would be wise to start thinking carefully about their procedures.
But what's happening with DPAs?
Whilst Mr Ephgrave's SFO seeks to find and use new tools, one of its previously well-used instruments has been noticeably absent from the enforcement landscape: Deferred Prosecution Agreements ("DPA"). The SFO has used DPAs to great effect in previous years, having entered 12 since the regime started in 2014, yielding an enormous £1.7bn in fines and disgorgement. But there have been none since 2021.
A cynical commentator might query whether this is because corporate entities, who were once keen to bend over backwards, self-report and cooperate to secure the financial certainty offered by a DPA (rather than face the jeopardy of prosecution), are now conducting a different risk analysis.
Although a DPA requires judicial approval, the court is not required to assess whether the evidence underlying the DPA is sufficient to establish the agreed facts. As such, the DPA process essentially allows the SFO and a corporate entity to enter into a mutually convenient mechanism of resolving an investigation. But DPA data has demonstrated that, when tested in court in trials against individuals, the evidence of criminality that a corporate entity has accepted for the purposes of obtaining a DPA has been insufficient to persuade a jury to convict. In the decade that DPAs have been available, the SFO has secured only one conviction of an individual following the corporate entities' admissions of wrongdoing (and that single conviction comes from an individual who pleaded guilty to receiving bribes from individuals subsequently acquitted at trial of paying them). All other individuals prosecuted have been acquitted.
As such, a corporate entity looking at this landscape could be
forgiven for taking the view that it might rather risk evidence
being tested in court (if the matter gets that far), than seeking
to cooperate and negotiate a DPA.
Interestingly, the disconnect between corporate admissions of
wrongdoing and the weight of the actual underlying evidence is
likely to be thrown into focus this year: in January 2025, the SFO
succeeded in establishing that it has the necessary jurisdiction to
apply to the Court to deal with a breach of a DPA by Guralp Systems
Limited ("Guralp"). Guralp entered into
a DPA in 2019, agreeing to pay just over £2 million by way of
disgorgement within 5 years. It has not done so and the SFO now
seeks remedies.
Whilst the SFO can apply to the Crown Court seeking a finding that Guralp is in breach and a direction that the parties agree proposals to remedy the breach, the true consequence of breaching a DPA is the threat that indictment will be revived and the company will be prosecuted.
However, in Guralp's case (like many others), the three officials charged with conspiracy to make the corrupt payments covered by the DPA were acquitted following trial. In circumstances where there may not in reality be sufficient evidence to pursue the indictment against Guralp, it will be interesting to see where the SFO's efforts in highlighting Guralp's breach ultimately takes them.
A push to incentivise whistleblowers
In terms of what might be on the horizon for the SFO, Mr Ephgrave seems to have taken some of his inspiration from his US counterparts, and has been particularly vocal on the subject of whistleblowers. In particular, he has been clear in his view that the SFO "should pay whistleblowers" in order to expedite the progress of SFO investigations. Mr Ephgrave's stance is an about turn for the SFO; in 2018, the then Director Sir David Green said that rewarding whistleblowers "just isn't British".
Sir David Green's sentiments mirror the findings of a research paper published in December by the Royal United Services Institute (RUSI) which found that there was a general cultural opposition in the UK to rewarding whistleblowers. However, the paper also found that, in jurisdictions with "cash-for-information schemes" such as the US, those financial rewards actively incentivise whistleblowers to come forward, improving the speed, efficiency and cost-effectiveness of law enforcement investigations.
The concept of individuals involved in the criminal activity using the whistleblowing mechanism to obtain a better outcome for themselves might be unpopular (and there is indeed already a statutory mechanism in place for assisting offenders, see our earlier article). On this point, Mr Ephgrave has clarified that he anticipates eligible whistleblowers would not be complicit in the criminality, but would instead be innocent bystanders, and that "very few" of those whistleblowers would be required to be witnesses if a prosecution should follow from their information. Ultimately, before any such scheme can be implemented, the SFO would need to consult with a cross section of the legal profession (including the judiciary, barristers and solicitors) to determine important issues including the impact of whistleblower evidence on disclosure, whether whistleblowers will have to undertake the same "cleansing" process as assisting offenders, and who determines whether the whistleblowers come to the SFO with 'clean hands'. BCL's in-depth analysis of this important topic can be found here.
Will the SFO finally get to grips with disclosure?
Finally, and because it is impossible to comment on the SFO without commenting on its difficulties dealing with disclosure, it is of note that this year should see the publication of the long-awaited 'Fisher Report'.
It is well known that the SFO has long struggled with disclosure, and its failure to resolve its issues has been the root cause of trial collapses, including in Serco and Unaoil. The issues in these cases were dissected in subsequent reviews conducted by Sir David Calvert-Smith and Brian Altman KC, which made for discouraging reading.
In October 2023, the government announced an independent review of disclosure and fraud offences, conducted by Jonathan Fisher KC. One of the questions to be answered by the review is whether the current disclosure regime under the Criminal Procedure and Investigations Act 1996 ("CPIA") is still fit for purpose.
Fisher published an interim report containing his preliminary findings in April 2024, which we have previously discussed. The interim report provided an indication of where Fisher might land on reform of the disclosure regime; he noted that the structure and architecture of CPIA is fundamentally sound, however problems occur largely in the practical application of the regime.
Fisher was also tasked with considering the merits of dealing with disclosure by giving the defence the so-called 'keys to the warehouse', such that the defence receives some or all of the unused material held by the prosecution and takes on the burden of reviewing that material themselves.
In November 2024, Fisher shared the final version of his report titled "Disclosure in the Digital Age" with the Home Secretary. The report has not yet been published but we know that it contains 45 recommendations, and that Fisher hopes it will aid the creation of a modern disclosure regime. We expect that its findings will be hotly discussed by practitioners.
Separately, the SFO has, in February 2025, provided an update on the findings of an internal working group which, alongside the Attorney General's Office and HM Crown Prosecution Service Inspectorate, has the remit to review its cases that used the SFO's legacy document review platform, Autonomy. The SFO has raised concern that its application of search terms in historic cases may have prevented disclosable documents from being provided to defendants. For more information see our article on how legacy issues with the SFO's document review platform may put historic convictions at risk.
Conclusion
The past year has been a significant and positive one for the SFO, marked by increased enforcement activity, strategic reforms, and notable legal milestones. Under Mr Ephgrave's leadership, the agency has taken a more proactive stance; launching more investigations, narrowing the timeframe between commencement and charge, and focusing on new methodologies to improve evidence gathering.
There will be key areas of focus for the SFO in the year to come. It is likely to be emboldened by its first-ever UWO, and the agency heads into 2025 with several shiny new tools at its fingertips. However, the SFO's ability to maintain momentum and successfully bring high-profile cases to conclusion will be the true test.
Looking beyond the SFO's current case load, it will also be interesting to see how the SFO responds to changes in the international enforcement landscape. With the Trump Administration having ordered a pause in the US Department of Justice's ("DOJ") work in enforcing the Foreign Corrupt Practices Act in the US, eyes may now turn to see whether the SFO can pick up the DOJ's reins in leading global anti-corruption efforts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
