Can the UK control economic crime? - by Jessica de Grazia

Date: 05/10/2010

In the midst of a reorganisation of British policing, the Government proposes to create an economic crime agency.

The task is complicated by the many turf-protecting investigation, intelligence and prosecution agencies that would be melded into the new entity and widespread misunderstanding of how to deliver the best results.

The ECA’s raison d’être should be to deliver justice for crime victims more efficiently — so restoring Britain’s tattered reputation for economic crime prosecutions whose unhappy record includes the expensive and avoidable collapse of the Office of Fair Trading’s first big prosecution. But that will happen only if the ECA has the right design, human capital and tools.

Design is decisive.

Will the ECA be a combined investigative and prosecution agency (the Serious Fraud Office model proposed by Lord Roskill in his report in 1986 on fraud trials also adopted by the Financial Services Authority) or a police agency that farms out prosecutions to external prosecutors (the Crown Prosecution Service model proposed by Sir Cyril Philips in his Royal Commission on Criminal Procedure in 1981)? If the latter, the ECA will never deliver what the public need.

In America and the rest of Europe, experience has shown that the most efficient system for obtaining fair convictions is through prosecutor-led multidisciplinary investigative teams, where the prosecutor can initiate cases and direct and participate in the investigation by interviewing witnesses (including co-operators and targets) and defendants.

In the US this system has delivered consistently good results since first deployed in the 1930s in New York City to tackle organised crime and public corruption.

In Britain, prosecutors from the SFO and FSA exercise similar investigative powers. Indeed, in the international community of prosecutors (including Scotland), the CPS is the odd man out.

CPS prosecutors can advise but not direct the police. Although they may interview witnesses, this is rare. Moreover, the power kicks in only after the police have obtained a statement. Best practice, however, is for prosecutors and investigators to interview witnesses in tandem before reducing information to evidence.

Capable CPS prosecutors succeed despite the agency’s curtailed investigative role: but they could do better working under the SFO model.

Recently, a respected CPS organised crime prosecutor said he hoped to save money by persuading the police to consult him earlier so that he could prevent time-wasting mistakes.

The CPS/police “joint working” policy (close collaboration in the investigative phase) is meant to prevent this but, inevitably, breakdowns occur because it is not possible to control an organisation with a different command chain and bureaucratic demands. This is why in complex cases US local prosecutors employ their own district attorney investigators (with police powers) to supplement external forces.

Non-British prosecutors are mystified that SFO and CPS prosecutors are required to run the same tough race with different handicaps.

This is an accident of history. In 1977 Sir Cyril chaired the royal commission to decide whether prosecution, controlled by the police for more than 100 years, should be vested in a national agency independent of the police. Recognising that prosecution and investigation “overlap and intertwine”, the commission considered what investigative role, if any, prosecutors should have.

After looking at various common law models, it decided “none” — not because this would produce the best system but because a CPS with curtailed powers was an easier sell to the resistant police.

The Philips commission is sometimes wrongly cited as authority for the proposition that prosecutorial independence requires institutional segregation and that prosecutors who investigate lose their independence.

But the commission explicitly rejected the proposition that investigators were incapable of dispassionate decision-making: “... we have not been made aware of any systematic empirical evidence that supports it in relation to investigators as a group. It may be equally true that lawyers who spend their professional lives working in a prosecution agency become just as committed to securing convictions as police officers are said to do so.”

When I explained the Philips principle to a senior German anti-terrorism prosecutor, he was astonished.

German law requires prosecutors, who are knee-deep in the investigation, to ascertain “not only incriminating but also exonerating circumstances, and ensure that evidence, the loss of which is to be feared, is taken”.

In 1935 the US Supreme Court imposed the same obligation on US prosecutors. In the eyes of an American or German prosecutor, CPS decision-making is not independent when relying, as it typically does, only on police assessment of witness reliability.

Independence does not come from segregation of tasks or institutions — it is an intellectual process, a mind set, and a professional ethos that will flourish in any well-managed investigative prosecutors’ office.

During the SFO review, I asked a senior City of London fraud detective which was his preferred working method — the SFO or CPS model? His unequivocal answer was the SFO model, done right. I was pleased to discover that the police are the same on both sides of the Atlantic. Good police want good results and will take direction from prosecutors who know what good is.

It is worth spending money and time on building the ECA only if it delivers improvements. Better to focus on improving human capital and updating tools than to construct a new entity with a crippling design flaw.

The author is a former senior New York City prosecutor and adviser on criminal justice reform. In 2004-08 she conducted an independent review of the SFO and co-developed and co-ran the CPS proactive prosecution programme

This article first appeared in The Times on September 16th 2010 and has been reproduced by their kind permission and that of the author.