Engaging with the Serious Fraud Office (the SFO) can often be a difficult task for any company, and the breadth of their statutory powers is often surprising to those unfamiliar with their investigatory powers. More worryingly, the powers are backed up with criminal penalty for obstruction or non-compliance.
The SFO itself has jurisdiction throughout England, Wales and Northern Ireland and deals with cases that appear to the Director of the SFO to involve serious or complex fraud. The Director is the individual who wields the powers of the SFO, although they can delegate any of their powers to any member of the SFO at any time.
What powers do the SFO have under Section 2?
The powers under section 2 of the Criminal Justice Act 1987 are very robust methods by which the SFO can obtain evidence for the purposes of an investigation without the need for a Court order or witness summons.
There are three main powers:
- The power to compel someone to attend an interview with SFO staff;
- The power to compel persons to produce documents or other information;
- The power to apply for a search warrant.
The crucial point about these powers is that failing to respond to these powers in time, or providing false or misleading information in response to them is a criminal offence. This article will consider the first two powers in more detail.
The Section 2 interview power
This perhaps is the most draconian power. The most striking characteristic of a Section 2 interview is that there is no right to silence; an interview attendee cannot provide a no comment answer to questions unless it would reveal information protected by legal privilege, or if they have a reasonable excuse not to answer.
The SFO guidance on these interviews demonstrate that the presence of lawyers is tolerated, rather than encouraged. For example, the guidance states that lawyers will only be allowed to attend an interview if the SFO believe it likely they will assist the purpose of the interview and/ or the investigation, or if they provide essential assistance to the interviewee either in terms of legal advice or pastoral support.
The one crucial caveat to a Section 2 interview is that answers provided in the interview cannot generally be used in a prosecution against the interviewee, except in certain circumstances, such as where those answers are false or misleading. Giving such false or misleading answers could result in a criminal prosecution.
The Section 2 notice
The second power is the ability to serve a notice on an individual or company requiring them to produce documents or other information.
These notices usually specify a timescale for compliance, though they can be used to obtain information 'here and now'. In practice, the time and location specified for the production of information is agreed between the SFO and the target of the notice in advance. If a company believes they may soon be on the receiving end of such a notice instructing a Solicitor to negotiate with the SFO would be of benefit; especially when one considers that non-compliance with a Section 2 notice is a criminal offence.
The Section 2 notice - procedural safeguards
The only safeguards that apply in relation to section 2 notices are that they cannot be used to obtain material subject to legal professional privilege. Furthermore, the powers under section 2 should only be used when necessary, reasonable and proportionate and in line with the Human Rights Act 1998.
On the basis of the above, it is understandable why some individuals and organisations could be particularly anxious about engaging with the SFO, as the powers they wield are particularly draconian. At the same time, this anxiety should not translate into indecisiveness, as it is crucial that anyone served with a section 2 notice or requested to attend a section 2 interview obtains legal advice as soon as possible.