In the fight against global economic crime, the authorities have repeatedly advocated their desire to seek the assistance of those who have participated in, or have information concerning, criminal wrongdoing. They do so in a number of ways: through the help of whistleblowers, informants, suspects or defendants testifying in court and the use of Deferred Prosecution Agreements (DPAs).
The Director of the Serious Fraud Office (SFO), Lisa Osofsky, comes from a background of US enforcement. When she initially took up office she made several references to ‘flipping defendants’ to become prosecution witnesses. For example at the GIR Women in Investigations conference in June 2019 she recalled that: “we are allowed under our system to trade off a certain kind of leniency for certain types of information” and underlined the role she considers cooperating witnesses play: “Insiders can bring cases to life… our juries could live with a little bit of leniency for someone who had been on the inside and has given extraordinary cooperation to the government.”
However, at the recent Cambridge International Economic Crime Symposium in September 2019, flipping defendants wasn’t mentioned but instead Osofsky stated the stark reality: “when we cannot get the evidence – maybe because witnesses are dead or unavailable, or documents or monies are hidden on unfriendly shores, or because the evidence trail runs cold for reasons beyond our control – then the law requires us to stand down. It is nothing more or less than the old saying: “No witness, no case.””
So cooperating witnesses are even more important. Yet in contrast to their US counterparts, prosecutors have made little use of their powers to encourage such assistance. Equally, and as viewed suspiciously from the other side, there are many pitfalls for the defence lawyer to circumvent while advising clients to provide such assistance.
Ss 71-75 Serious Organised Crime and Police Act 2005 [SOCPA] purports to provide a statutory alternative to the common law concept of providing “Queen’s evidence”. The legislative premise was that the common law powers were underused and that the statutory regime would increase their usage [See White Paper One Step Ahead 2004].
There are 3 types of SOCPA agreements:
- S71 - full immunity - these are extremely rare and almost redundant
- S72 – restricted use undertakings – also very rare
- S73 - cooperating witness agreement – less rare relatively speaking. This requires the offender to plead, cooperate with the prosecutor including giving evidence in return for a super discount on sentence.
With the introduction of SOCPA agreements in April 2006, it was anticipated by the legislative and many others that this was the start of a brave new world in terms of cooperating defendants or suspects.
However, it seems that we (prosecutors and defenders alike) are not so brave after all. For example the CPS has revealed that for the period 1 May 2017 – 30 April 2018, there were no s71 agreements and only 14 s73 agreements. That is 0.002 per cent of their cases. Neither the SFO nor Financial Conduct Authority (FCA) have published figures but they are unlikely to be any different.
WHY ARE SOCPA AGREEMENTS SO RARE?
From the prosecutor’s point of view there are various reasons:
- The full code test has been applied and so the defendant has little to offer
- The process is formulaic and heavily resource driven including witness protection
- It is a lengthy process which may delay a trial
- Ultimately, juries have a healthy distrust of a “super grass” evidence and their motives and the drama of their testimony is a distraction from other equally important matters
For the defence:
- There is a mistrust amongst defence lawyers of the process and hence a lack of appetite for such agreements
- It can be a “who blinks first” scenario and often no one blinks or they blink too late
- Perhaps the most relevant consideration is that the process is a minefield and offers little by way of protection for a defendant if the agreement negotiations collapse
SO WHY IS IT SUCH A HOSTILE PROCESS FOR A COOPERATING DEFENDANT/SUSPECT?
When to start the process?
The first approach will be a leap of faith and trust will be a key feature because once disclosure is made, it is very difficult to control it. Any information given could trigger an investigation that may not have been in contemplation and so there will a difficult balance to strike of offering enough to interest the authorities in progressing the matter but not so much that an individual’s interests are compromised.
If the prosecutor bites – the next stage is the scoping interview
The purpose of the scoping interview is to assess if the individual is suitable to enter into a SOCPA agreement and the type of agreement. Before this is done a proffer letter needs to be agreed. This in theory protects the individual from their interview being used against him in future proceedings should the process collapse. However, it does not really offer that much protection as it still allows the investigators to use the answers given to peruse other lines of inquiry which may be unhelpful.
The inherent risk is that at the end of the process the individual may not be considered suitable for a cooperating agreement or they may not be first through the door but has nonetheless given a lot of information and intelligence to prosecution.
The next stage is entering into the agreement
If, and it is a big if, an agreement is offered, it is likely to be under s73 (a cooperating witness) in which the following would need to be agreed by the individual:
- To take part in a cleansing process (see below)
- Plead guilty to all offences admitted
- Be truthful
- Continued cooperation with the prosecution including giving evidence
- In return, the prosecutor will provide a report to the sentencing judge setting out the assistance given
- The agreement will be very clear that any breach of the agreement will render it void
The cleansing stage
This is the biggest and most uncertain stage in the process. It is an interview under caution and a full admission of guilt is required – if not then there cannot be any expectation to receive the fullest discount and the agreement may be voided. An admission of all previous wrongdoing is required and so the risk of being prosecuted for those and potentially they will be asked to waive privilege in respect of matters under investigation.
If at this stage the agreement breaks down, there is little protection and the interviews can be used against the individual in any subsequent trial.
Other factors to bear in mind
In addition to there being no guarantees at any stage, witnesses can be cooperating for months if not years and are more likely than not have to undergo hostile cross examination during the trial process, sometimes from multiple lawyers.
SO WHAT IS IN IT FOR THE DEFENDANT/SUSPECT?
A substantial discount in sentence and in some cases staying out of prison. The discount of up to ¾ of the total sentence which would otherwise have been passed. Then a further 1/3 discount for an early guilty plea.
Cases which have been reported show that judges are buying into this process and the discounts have been significant. However, it is very much in the hands of the judge so adding to the leap of faith – it is outside the powers of the prosecutor to agree a level of sentence. In addition, the court has the power to completely disregard the basis of plea.
Also, under s74 the prosecution can seek to refer the sentence back to the court if there is a subsequent breach. This though will only be possible if the defendant is still serving a term of imprisonment. In the fairly recent case of Loughlin, the Supreme Court refused to be prescriptive about the factors to be taken into account by a specified prosecutor when deciding to refer a matter back. In this case the cooperating witnesses has lied and colluded and so breached their agreement but the prosecutor found that it was not in the public interest to invoke s74.
So the process really is hostile to a cooperating witness or potential cooperating witness. With serious fraud prosecutions appearing to have a greater element of chance than other prosecutions because they often collapse or defendants are acquitted which has in the past left cooperating witnesses disappointed and the only one in the case convicted. It is perhaps very unlikely that the landscape will change any time soon, and that Lisa Osofsky’s wish for a new emphasis on flipping defendants will just end up a recycled aim and no more.