Disclosure and the SFO: is the current regime fit for purpose?

Summary

The UK Serious Fraud Office ("SFO") has had significant problems with disclosure in its complex criminal investigations. The question has to be asked: is the current disclosure regime in criminal cases fit for purpose?

Two recent publications have examined this issue: (1) Jonathan Fisher KC's "Preliminary Findings and Direction of Travel" in Part 1 (Disclosure) of his "Independent Review of Disclosure and Fraud Offences" ("Preliminary Findings"); and (2) "An inspection of the handling and management of disclosure in the Serious Fraud Office" by HM Crown Prosecution Service Inspectorate ("HMCPSI"). Both reports identify the increasing volume of digital material as the primary challenge for the current disclosure regime.

But these publications propose piecemeal solutions to the current disclosure regime, which is based on a 1996 statute. They have missed the opportunity to set out the basis for a fundamental reform of the disclosure process that many practitioners believe has been necessary for a long time.

Those practitioners include the SFO, which has stated it will "push for a disclosure regime fit for today's challenges." At a time when the new Director, Nick Ephgrave, is looking at all options – such as financially incentivising whistleblowers – to increase the effectiveness of the SFO, what these publications propose is tinkering round the edges rather than the root and branch reform required.

What are the current disclosure rules?

Disclosure in criminal proceedings in England and Wales is governed by the Criminal Procedure and Investigations Act 1996 ("CPIA"). Pursuant to s.3(1)(a) CPIA, the prosecutor must "disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused".

According to the CPIA Code of Practice at paragraph 2.1, "material may be relevant to an investigation if it appears…that it has some bearing on any offence under investigation or any person being investigated, or on the surrounding circumstances of the case, unless it is incapable of having any impact on the case".

The CPIA Code of Practice at paragraph 6.2 states: "Material which may be relevant to an investigation, which has been retained in accordance with this code, and which the disclosure officer believes will not form part of the prosecution case, must be listed on a schedule."

Jonathan Fisher KC's Preliminary Findings

In his Preliminary Findings, Mr Fisher KC explained how he had held meetings with, and sought the views of, interested parties across the criminal justice system on the issue of disclosure in criminal cases. These included investigators, prosecutors, defence professionals, members of the judiciary, the Bar Council and the Law Society.¹

The aims of Part 1 of the independent review included understanding what works well and what requires improvement in the current criminal disclosure regime and how the regime can be modernised.

The Preliminary Findings identified the challenges posed by the "exponential rise in digital material" in the criminal justice system, particularly that this makes "disclosure […] an increasingly time and resource intensive process for all parties". The disclosure requirements are slowing case progression in the criminal courts. This is especially so in "disclosure heavy" case types, including fraud cases. By way of illustration, the average SFO case has approximately 5 million documents.²

However the Preliminary Findings surprisingly did not propose reform of the disclosure regime to make it more suitable for the volume of data that prosecutors now have to deal with. In fact, the Preliminary Findings stated that the general consensus among those who had been consulted was that "the structure and architecture of the CPIA is sound"³ and the "problems occur largely in its practical application";⁴and that there is apparently "no compelling case for radical reform of the CPIA".⁵

The Preliminary Findings identified the following "emerging themes":

1. The legislative framework;
2. Technology and AI;
3. Early engagement;
4. The Magistrates' Courts;
5. Training and Resources; and
6. Crown Prosecution Service ("CPS") engagement.

(1) The legislative framework

In addition to the surprising point noted above that the CPIA is still viewed by some as "sound", the Preliminary Findings identified the broadly defined term of "relevant material" as an issue. Feedback raised concerns about the potential for highly subjective decisions to be made, coupled with confusion about the exact scope of the definition, resulting in inconsistency across the criminal justice system. The final report will explore the issues around "relevant material" further.

One of the key issues identified is whether there is merit in giving the defence the "keys to the warehouse" – where the defence has direct access to all material held by the prosecution. On the one hand, there is an argument that the "keys to the warehouse" model would be of limited effect, because it would involve in large part simply providing back to the defence material that it provided in the first place. On the other hand there is the inherent threat to privacy and data protection in the "keys to the warehouse" model, since the "warehouse" would inevitably contain material originating from numerous sources; consequential issues would include that more thought must be given to redacting sensitive (including privileged) material. The Preliminary Findings stated that whilst there is merit in exploring the "keys to the warehouse" model further, these are some important issues to consider.

(2) Technology and AI

Discussions with investigators and prosecutors indicated that the material scheduling requirements (set out in CPIA Code of Practice Chapter 6) are particularly burdensome, both in terms of time and resources. Feedback from those consulted suggested significant interest in what solutions AI might have to offer.

Material scheduling⁶ requires each item of unused material to be listed, numbered and described in sufficient detail to enable the prosecutor to decide whether they need to inspect the material before electing whether or not it should be disclosed. Although block listings are permissible, it is easy to see why the material scheduling requirements are time and resource intensive. In its written evidence to the Home Affairs Select Committee in October 2023, the SFO stated "the disclosure schedule in one…case included 200,000 items and took over six months".⁷

As a result, the final report will explore what solutions AI might have to offer to streamline disclosure in the criminal justice system and the utility (or otherwise) of the current material scheduling requirements.

(3) Early engagement

Critically, the Preliminary Findings identified that "greater attention needs to be given to disclosure at an earlier stage". The consensus was that early engagement between the prosecution and the defence, both pre-charge and post-charge, has the potential to produce major benefits for case efficiency and progression.

One option raised in the Preliminary Findings would be to use either an existing hearing, such as the 'plea and trial preparation' hearing, or establish an entirely new early-stage hearing, to discuss and agree the prosecution's approach to disclosure. This 'disclosure hearing' could focus exclusively on disclosure issues, could be held either in-person or remotely, and would have the benefit of judicial direction regarding disclosure from an early stage.

(4) The Magistrates' Courts

The Magistrates' Courts are subject to shorter statutory timelines and fewer case management hearings, meaning less time and fewer opportunities for the prosecution and defence to iron out the aforementioned disclosure-related issues. The final report will explore the possibility of a bespoke approach to disclosure in the Magistrates' Courts.

(5) Training and resources

A common theme across the feedback was the need for better training and resources in relation to disclosure across the criminal justice system. Mr Fisher KC intends to assess the areas of training, resources and culture further in his final report, since "the importance of disclosure must be embedded as an inextricable part of the criminal trial process".⁸

(6) CPS engagement

Currently, the CPS requires that a comprehensive schedule of unused material is prepared before a charging decision is made. In cases sent to the Crown Court, the unused material schedule should, wherever possible, be provided to the prosecutor at the same time as the prosecution file in preparation for the first hearing.⁹ The final report will seek to address whether this is necessary in all cases.

Mr Fisher KC has invited reflections on the Preliminary Findings.¹⁰ His final report is due to be submitted to the Home Secretary in the summer of 2024.

HMCPSI: 'An inspection of the handling and management of disclosure in the Serious Fraud Office'

On 30 April 2024, HMCPSI published "An inspection of the handling and management of disclosure in the Serious Fraud Office", following what it described as a "thematic inspection of the SFO's ability to deliver its disclosure obligations".¹¹

HMCPSI used two recent SFO cases as case studies for the report: its successful prosecution of numerous Balli Steel executives in September 2022, and its failed prosecution of three G4S executives in March 2023. Having examined the two case studies, HMCPSI found that the following processes were carried out with varying degrees of effectiveness:

1. Disclosure decision-making;
2. Scheduling of unused material; and
3. Engagement with the defence.

The report acknowledged that advances in modern technology have greatly increased the volume of digital material in cases, posing unique challenges, especially in complex cases and fraud investigations.

HMCPSI identified the following as being some of the key challenges faced by the SFO in the discharge of its disclosure obligations:

1. Retention of case staff;
2. Disclosure planning strategy;
3. Record keeping and case management;
4. Structural weaknesses;
5. Assurance processes; and
6. Internal culture.

The report also noted that the SFO has already taken the following positive steps since the collapse of the G4S case:

1. Efforts to incentivise staff to take on the role of 'Disclosure Officer';
2. Changes to its Operational Handbook;
3. Changes to its assurance processes; and
4. The introduction of a new document review platform.

HMCPSI made the following recommendations for the SFO to implement:

1. Update its Operational Handbook in relation to the handling of Deferred Prosecution Agreements and related material;
2. Revisit the guidance in its 'Disclosure Management Document' template in relation to explaining disclosure processes and safeguards;
3. Introduce an independent, post-charge disclosure review process, akin to a peer review, for every case;
4. Consider ways to incentivise staff to take on the roles of 'Disclosure Officer' and 'Deputy Disclosure Officer' on a case; and
5. Review its current model for the management of legal professional privilege, with a particular focus on risks, management and control.

These publications do not go far enough

The CPIA was passed in 1996, at a time when the internet and email services were in their infancy. That year, the most high profile mobile phone launched was the Motorola StarTAC, which could send and receive calls and SMS messages, but no more. Self-evidently, the volume of data and digital material connected to criminal proceedings at the time the CPIA came into force was a fraction of what it is now.

The SFO made this point in its written evidence to the Home Affairs Select Committee in October 2023: "every SFO case can involve multiple phones, laptops and company servers with a storage capacity unconceivable even a decade ago. It takes considerable resources to process and examine that data".¹²

These publications could have been an opportune moment to set out plans to overhaul and update the disclosure regime to align with the modern digital world. So it is surprising that the Preliminary Findings do not make more of the burden the current disclosure regime places on the prosecution and instead seem to be advocating incremental changes to the existing framework – even when prosecutors want wider reform. For example, the SFO's recently published strategy for 2024-2029 includes a goal of "[c]ontinu[ing] to push for a disclosure regime that is fit for today's challenges"¹³ (emphasis added).

The difficulties arising from the current disclosure regime can be seen in the result of the HMCPSI report – being bound by seemingly outdated disclosure rules can create significant problems, resulting sometimes in collapsed prosecutions.

Despite the issues identified and recommendations proposed in both publications, without real reform to deal with the current disclosure regime it seems inevitable that the disclosure issues that have plagued prosecution of complex corruption cases will continue to arise.