Trying fraud in a crisis

• United Kingdom

• Financial services disputes and investigations
• Fraud and financial crime
• Litigation and dispute management

17-04-2020

At the end of March, as the impact from the UK’s Coronavirus restrictions began to hit the criminal justice system hard, the CPS published an Interim Charging Protocol, agreed with the National Police Chief’s Council (the “Protocol”). The Protocol acknowledges that the criminal courts are unable to operate as usual while lockdown restrictions are in force, and therefore aims to manage new criminal cases being fed into the court system and deal with how those cases are progressed.

The Protocol divides criminal cases into three broad categories and gives examples of how those types of cases might be handled.

The first category of cases is labelled as ‘Immediate’ and relates to all custody cases (i.e. where a law enforcement agency is seeking remand in custody for a suspect following a positive charging decision), as well as all cases relating to a Covid-19 offence. The second category is High Priority cases – serious cases where bail will be required but there is not necessarily a requirement for the suspect to be remanded in custody following a positive charging decision. The third category covers other cases, where a suspect is to be released under investigation or no arrest is required.

As the Protocol itself points out, serious fraud cases will fall into the third category. Those cases are complex and investigations are generally long-running with suspects often interviewed under caution by arrangement rather than following an arrest. In order to avoid further blockage of the courts, the Protocol states that case preparation should continue and encourages work to be done with defence solicitors ahead of charge.

The CPS has also issued interim case review guidance (the “Guidance”) on how the public interest test should be applied at this time, reminding prosecutors in particular of paragraph 14.4 of the Code for Crown Prosecutors which requires prosecutors to consider a number of questions, including whether prosecution is a proportionate response. In the current context, prosecutors are asked to note the “expanding pipeline of cases waiting to be heard”, the likelihood of delays and that “each case that is introduced into the system, or kept in the system, will contribute to the expanding pipeline and delay.” Although this Guidance does not change the Code for Crown Prosecutors itself, it will inevitably add to the operational pressure on prosecutors and will inevitably result in charging decisions which are different to those which would have been made in the pre-Coronavirus world.

Despite attempts to slow the flow, new cases will inevitably need to be sent for trial. The Protocol makes some attempts to free up time in the magistrates’ courts by reminding prosecutors of the process for direct transfer of complex fraud cases to the Crown Court, by way of a notice under Section 51B of the Crime and Disorder Act 1998, a process routinely used by the Serious Fraud Office (“SFO”). Where there is sufficient evidence of a serious or complex fraud offence, this process allows for an adult defendant to be sent to for trial at the Crown Court promptly, thus skipping the usual plea before venue or allocation procedure at the magistrates’ court.

Where new complex fraud cases do need to be listed at a Crown Court, the Protocol also suggests that “a virtual specialist fraud court could be set up to manage cases and prepare a longer listing plan.” This is an interesting concept, but one that does not yet seem to have been picked up on any further. For example, there has been no specific mention of this idea in the daily online operational summaries published by HM Courts & Tribunal Service. There has been considerable work done on streamlining and consolidating work carried out in physical court buildings (at the time of writing a total of 74 Crown Courts are open either to the public for essential hearings or as a workplace for court staff and judges) and on putting in place procedures for video and telephone hearings.

In a recent article we predicted that the SFO would recalibrate its priorities and focus in order to adapt to the economic crimes which will inevitably emerge from the pandemic, as they have done from previous crises. These unprecedented circumstances also provide an opportunity for the SFO to play a key role in helping transform the way in which complex fraud cases are managed and passed to the courts. However, the SFO has been silent thus far in this regard, as well as in relation to how Coronavirus may be affecting its current and emerging investigations and any charging decisions that are to be made. It will be interesting to note how the SFO makes use of the Protocol, and how it interprets the recent Guidance when making charging decisions under the Code.