The already damaged reputation of the U.K.’s anti-bribery agency took another hit last month following the release of a High Court judgment.
On May 16, a judge found the Serious Fraud Office (SFO) induced a lawyer acting for a company the agency was investigating to provide it with privileged and unauthorized information.
Neil Gerrard, a former partner at law firm Dechert, was found to be in “gross and deliberate breach of duty” for leaking material to the SFO, as well as stories to The Times newspaper, about his client, mining company Eurasian Natural Resources Corp. At ENRC, Gerrard led an internal investigation between 2011 and 2013 into alleged corruption at a Kazakh subsidiary.
The High Court said the scheme was part of a deliberate attempt by Gerrard to expand the scope of the investigation to rack up more than 13 million pounds (U.S. $16.4 million) in fees, as well as to ingratiate himself with the SFO.
The judge, Mr Justice Waksman, found Gerrard negligently—and for the most part, recklessly—gave ENRC exaggerated and wrongful advice about the company’s potential criminal liability, potential penalties, the risk of raids by the SFO, and the risks involved in engaging with the SFO.
Judge Waksman added the SFO was in “serious breach” of its duties by engaging with and taking information from Gerrard on 15 occasions, “which was plainly unauthorized and against his client’s interests” and constituted “bad-faith opportunism.”
ENRC has been the subject of an SFO investigation since 2013. No charges in the case have yet been announced.
The SFO’s investigation has centered on the activities of the Kazakh subsidiary, but Gerrard widened the internal investigation to look at ENRC’s activities in the Democratic Republic of Congo and Zambia at great expense—over six times the £2 million (U.S. $2.5 million) in fees ENRC expected for the work.
The SFO’s former director, Richard Alderman, and former interim director, Mark Thompson, engaged in “conspiratorial whispers” with Gerrard, the court found. Gerrard “lied continuously” while two SFO officers were equally prepared to give dishonest evidence, according to the judge.
“As much as ENRC welcomes [this] judgment, it is also profoundly concerned by the very serious implications for other Dechert clients and other subjects of SFO investigations,” a company spokesperson said in a statement.
Dechert said in a statement Gerrard’s conduct “is completely at odds not only with our values, ethos, and culture as a firm but also with the high ethical and professional standards adhered to on a daily basis by our lawyers the world over.”
The SFO has been keen to state ENRC failed in most of its allegations against it. In particular, the court found no misfeasance in public office, no deliberate destruction of evidence, no leaking of information to the media, and no use of ENRC’s privileged material.
“We welcome that the judge found against ENRC for the majority of its allegations against the SFO. We are considering the implications of this lengthy and complex judgment for the SFO and other law enforcement authorities,” an SFO spokesperson said.
But the agency doesn’t come out of the proceedings looking good, and the High Court’s findings will have significant implications, particularly in light of the independent review into the SFO’s conduct commissioned by the Attorney General following the regulator’s botched bribery investigation into oil and gas consultancy Unaoil that has so far led to two individual convictions overturned.
Legal experts said the fact the SFO was complicit in Gerrard’s dishonest conduct has serious ramifications regarding attorney/client privilege and raises significant questions regarding the integrity of the regulator.
“We have an agency that wants companies to come forward and self-report everything as part of a deal to just be considered for a deferred prosecution agreement,” said one lawyer. “What the hell is the SFO going to do to you if you decide not to cooperate?”
Matthew Corn, partner and serious crime solicitor at law firm Olliers Solicitors, said “any bad publicity is damaging for the reputation of the SFO.”
“If U.K. agencies (like the SFO) are discredited, this could potentially have an adverse effect on the relationship between U.K. and overseas agencies,” he added.
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