RAHMAN RAVELLI NEWSLETTER 1113

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www.rahmanravelli.co.uk

It seems as if the SFO is out to clean up. The anti-fraud body is beginning proactive sweeps of sectors in a bid to prevent wrongdoing or, at the very least, detect it as early as possible. For a body normally known for reacting to crime rather than looking for it, this marks quite a change to its plan of action.

SFO director David Green has spoken openly of “sectoral sweeps’’ in a bid to make his organisation’s intelligence capability far more effective. And if anyone wondered where he envisaged the SFO brush to be doing most of its sweeping, he outlined it in the clearest possible terms. “ I would look at sectors that are most vulnerable to economic crime,’’ he explained, “such as construction and public contracts, oil and gas.’’ As statements of intent go, Mr Green’s is fairly straightforward. It is not the fi rst time UK authorities have named certain parts of industry they plan to have a closer than normal look at. But the way in which the SFO intends to go about its work is a departure from its normal way of operating.

The SFO has always, rightly or wrongly, responded to problems rather than pre-empted them. Companies self-reporting, whistleblowers coming forward to highlight improper practices, tip offs and information from other agencies have traditionally been the ways the SFO has come to fi nd out about illegal business behaviour. Now, if Mr Green is to be taken at face value, the SFO is prepared to go up a gear in its pursuit of evidence of wrongdoing. The SFO is set to go looking for the wrongdoing rather than wait for it to fi nd its investigators. In making his bold statement of intent, Mr Green cited the annual report by Transparency International, which laid out the industry sectors where corruption and other business crime are most prevalent. Those sectors, it would appear, can now expect to be monitored very closely.

Looking for particular trends in certain sectors is not something new. The UK’s Competition and Markets Authority has said it will be paying close attention to the energy and banking sectors. UK fi nancial investigators have long carried out what are known as thematic reviews

– searching for certain problems or issues in particular types of company. Two or three years ago, anti-bribery controls in investment banks came under scrutiny as the Bribery Act was about to come into effect. What marks the SFO’s statement out as noteworthy, however, is the extent to which Mr Green wants his organisation to go about its pro-active work. He has spoken of using secret surveillance powers: tactics such as the interception of communications that have to be offi cially sanctioned under the Regulation of Investigatory Powers Act. Such a practice will usually require the Home Secretary’s formal permission, as it is normally used for security purposes.

Such talk is a clear raising of the bar when it comes to the SFO’s effectiveness. The SFO has been monitored by the independent inspectorate for the Crown Prosecution Service. This monitoring has already produced a report, issued exactly a year ago, that criticised the SFO for such basic failures as poor record keeping and inconsistent intelligence gathering. Six months prior to this report, Mr Green took over at the head of the SFO, pledging to reinvigorate the way it worked and

Edition 017 / November 2013eBookSerious Fraud, Regulatory and Complex Crime Lawyers

SECTOR INSPECTORS

The Serious Fraud Offi ce is aggressively targeting certain sectors of industry because it believes it can uncover evidence of bribery and fraud. Oil, gas and construction face close inspection – making it vitally important that anyone operating in these sectors have a strong compliance culture.

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raise its image above the perception many had of it as an accident-prone, unsuccessful prosecuting authority.

Whether the talk of sector sweeps is Mr Green’s main attempt to make the SFO a tougher, better organisation remains to be seen. Time will tell. But, for anyone working in the sectors Mr Green has deemed worthy of sweeping, this should serve as the very strongest reminder possible of the need to make sure their companies are above and beyond reproach. Turning a blind eye to wrongdoing, hoping it isn’t happening or being unaware of it simply is not good enough. A previous belief that no one would either spot what was illegal or blow the whistle will no longer suffi ce. If the SFO itself is coming looking for the evidence such a devil may care stance is fairly useless.

So what can be done? Well, compliance goes a long way to cutting out the risks of a company facing prosecution – whatever the sector they are in. Some of it verges on being good, careful common sense. For example, if your staff work abroad, what measures have been

taken to make sure they comply with UK law and the law of the country in which they are doing business? Has anyone else that the company has dealings with – such as suppliers, agents and third parties - been checked thoroughly? Has ongoing monitoring been arranged as a precaution?

At Rahman Ravelli, we assist and advise companies of all sizes on compliance matters. Compliance can only be effective if a company introduces and then maintains systems that prevent any possibility for wrongdoing. In our experience, companies are increasingly keen to maintain a compliance culture once they realise the potential benefi ts. It soon becomes clear that the need to avoid prosecution, fi nes, imprisonment, loss of reputation and business – as well as huge legal costs and loss of working hours – make compliance a worthwhile priority. Compliance measures will vary, depending on a company’s location, size and – as clearly shown by the SFO’s latest statement of intent – business sector. But each company will face its own risks.

The Bribery Act, the Fraud Act 2006, Money Laundering Regulations, the Companies Act and the Enterprise Act amongst others can all be used to prosecute companies. The Bribery Act alone covers the activities of any company with a UK connection anywhere in the world. So simply hoping for the best is no substitute for compliance.

It is only a matter of months ago that the SFO said it would be cracking down on serious and complex fraud and anyone it suspects of bribery. It seems to be looking for more criminal convictions than civil settlements. When you add to this the SFO’s latest talk of proactive sector sweeps involving, where necessary, surveillance and interception of communications, compliance cannot be considered an option. It is a necessity. If the SFO does uncover the wrongdoing it clearly believes exists in sectors such as oil, gas and construction, a company can only really mount a credible defence to any charges if it can show it took all necessary action to reduce the opportunities for wrongdoing being carried out in its name.

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It’s a statistic that no one will be celebrating, According to the latest fi gures, fraud is at its highest level in four years.

The data from the Investment Management Association shows that investment fraud reached a new high in the fi rst half of this year. According to the research, reported frauds were up to 350 from 200 in the second half of 2012. If any comfort can be found in these fi gures, it is that the number of successful frauds has remained pretty much the same. But the trend seems to be one of fi rms and fi nancial advisors being targeted for fraud, with those carrying out the fraud often using the names or details of a genuine fi rm.

Whatever the names being used by the people involved and whatever the exact nature of what is being carried out, fraud in business can take a number of forms and can go by a variety of names. Bonds selling, boiler rooms, pyramid selling, Ponzi schemes, pension liberation and land banking. Just a few of the practices that have been used to convince people to invest in schemes that can make them wealthier. They are all methods of separating people from their money. And the fi nger of blame always, inevitably, points at the person who persuaded the investor to hand over their cash.

Such a person could be totally honest. It might just be that the product they were

asking people to invest in did not produce the expected rewards. Alternatively, the salesman may be a little too enthusiastic in their belief in the value of what they are selling. They may wrongly (but honestly) believe the investment they are selling has success written all over it. No one else may agree with them – but they may honestly hold that belief. In such cases, it is fair to say such a person is misguided rather than dishonest.

It is an important distinction because the issue of dishonesty is central to fraud prosecutions. Rahman Ravelli represents professionals from all sectors of business who have been accused of fraud. Accountants, salesmen, investment

ON THE UP

Investment fraud has jumped by 75% to hit a four-year high. Which means that there are a lot of people whose honesty and integrity is under investigation.


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brokers, fi nancial advisors, hedge fund managers, company directors, mortgage brokers and lawyers. The cases may vary but the issues are invariably the same. Their investments may stall or fail in a number of ways, the losses may differ in size and the methods they used to pull in investors may bear little similarity but, in each case, the crucial issue that has to be established by the prosecution is whether they acted dishonestly. Did they have dishonest intent when they operated the scheme and convinced others to invest in it? In short, was it dishonesty rather than poor luck or bad judgement that led to investors’ cash being lost?

When it comes to the law, dishonesty relates to the defendant’s state of mind. In Ghosh (1982), the Court of Appeal ruled that it had to be “according to the ordinary standards of reasonable and honest people, what was done was dishonest’’ and that, if so, the jury must be convinced that the defendant “must have realised that what he was doing was, by these standards, dishonest’’.

This defi nition effectively puts an obligation on the defendant to prove their

honesty. Which is often where the best legal advice is required. When it comes to honesty and fraud cases, anyone under investigation has to gain advice from a solicitor very familiar and well-versed in this fi eld of law. In such cases, a person under investigation has to make sure the solicitor they appoint is experienced in dealing with organisations, such as the Serious Fraud Offi ce (SFO), that carry out fraud investigations. A defendant may have to go to great and complex lengths to be able to argue and prove that they acted honestly (even though the burden is on the prosecution). The prosecution will be out to place the defendant in the least fl attering light. This makes it very diffi cult for a defendant to convince a jury of his innocence. Any jury may not comprehend every aspect of a case, which can make it harder for a defendant to persuade jurors that they acted honestly.

And this is precisely why it falls to a defendant’s legal team to make sure the jury is made aware of the defendant’s honesty. It is up to the defence solicitor to outline and detail the defendant’s work, the reasons behind his actions and his

thoughts when carrying them out. Careful, selective use of expert witnesses to show that the defendant was not exhibiting unacceptable, unprofessional or dishonest behaviour can be of great use in convincing a jury. Producing evidence of his previous work that has never been under suspicion can also help build a wider view of the defendant as a trustworthy professional unworthy of the character assassination being offered by the prosecution. The nature of the professional being accused and the commodities being sold may vary, but these defence principles can apply to all investment fraud cases. There are no guarantees but, if carried out intelligently, such tactics can win over jurors and dispel any lingering suspicions they may have that dishonesty was the motivating factor in what happened. And, before that, the issue of disclosure can give a defence team plenty of scope for challenging the prosecution’s claim of dishonesty.

Dishonesty, however, is not always the be all and end all of a fraud defence. For example Section 397 of the Financial Services and Markets Act 2000 makes it a criminal offence to make a misleading statement, promise or forecast or dishonestly conceal facts from someone with the intention of inducing someone to do, or refrain from doing, something in relation to an investment. Under this section, a person can be guilty if they are not dishonest but merely reckless regarding the statements they make to convince others to invest their money. In such cases, it can be as important to prove that there was no recklessness as it is to prove there was no dishonesty in other cases.

Such issues require a defence solicitor to establish that their client believed his actions would not create a false or misleading impression and that they acted in accordance with rules of professional conduct. To do this requires the aforementioned ability to convince a jury that the defendant acted honestly and with professional integrity.

Incidents of fraud may be on the way up. But it will take skilled solicitors to establish the honesty and decency of defendants who fi nd themselves being prosecuted. And only then will the number of investment fraud convictions be prevented from rising at the same alarming rate as the number of reported incidents.

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CARBON CREDIT FRAUD

Carbon credit fraud is a phenomenon that is on the rise. Rahman Ravelli’s Aziz Rahman was asked to write about the subject for “Environment’’ magazine. In a version of the article here, he explains the latest developments.

There can be little doubt that carbon credits were one of those ideas that was genuinely intended to make the world a better, greener place. With carbon credits, industry was supposed to become more conscious of its environmental footprint. Companies and organisations were given a mechanism by which they could make sure impact of their activities could at least be offset.

It started in 1997, in Kyoto, Japan, when a protocol to the United Nations Framework Convention on Climate Change (UNFCC) was initially adopted for use. This framework, usually referred to as the Kyoto Protocol, was created to reduce greenhouse gas (GHG) emissions. In short, the protocol allows industrialized nations to meet their GHG obligations by buying reduction credits from other countries. So if one country cannot meet its GHG reduction target, it can buy credits from other countries that have credits to spare. It seemed an idea dreamt up with the best of intentions…but it came to offer opportunities for those who were not concerned with

saving the planet.The signs that something was wrong

started to appear roughly fi ve years ago. In July 2009 the UK government announced it was making carbon emission trading ‘zero rated’ for VAT purposes, making it impossible to claim VAT on the sale of carbon credits in the UK. This was not an attempt to encourage trading in carbon credits. In fact, it was just the opposite – the government took the action because of a prosecution that saw carbon credits used in a £38 million VAT fraud. The carbon credit was now offi cially viewed as a tool being used to perpetrate VAT fraud.

I wrote in the Rahman Ravelli newsletter about carbon credit fraud last summer. The article was prompted by the City of London Police obtaining their fi rst criminal convictions and prison sentences for carbon credit fraud. This was not a VAT fraud case – it was very much a traditional investment-type fraud. Two men were jailed for running an international boiler room operation that moved nearly £6M of investors’ money to bank accounts in Canada and the United States. Some of the money

was used to fund lavish living in Marbella. On this occasion, however, police were able to trace much of it, recover it from the frozen bank accounts of the defendants and return it to the victims.

The court was told that the duo targeted thousands of people with offers of carbon credits and shares that they claimed were highly profi table. In reality, these were worth next to nothing. The men behind the operation had obtained the names of potential victims through the share lists of legitimate companies. They recruited staff to cold call people, telling their victims they were offering an unmissable opportunity and enticing them into parting with their money. By the time of the trial, police had found more than 1,800 victims. Many of these knew little or nothing about exactly what carbon credits are – or the fact that their resale value can be next to nothing. It was the type of investment operation that has been carried out for decades – only now carbon credits were the vehicle being used for it.

Since that summer article, carbon credits have repeatedly proved to be the

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weapon of choice in various criminal cases. Just last month, six men were charged over their involvement in an alleged £11M carbon credit fraud. Earlier this month, it was disclosed that the Insolvency Service had wound up 19 fi rms over the last 15 months that had attracted a total of almost £24M from investors by offering virtually worthless carbon credits. The 1,500 people convinced to hand over their money had no idea that carbon credits have little or no value when sold as shares or bonds. Consumer Minister Jo Swinson said these companies had led investors to believe they would gain huge returns by investing in trading permits that gave corporations the right to emit one tonne of carbon dioxide. What the investors did not know was that such permits were of little value because big companies usually trade in carbon credits on bulk. Unfortunately, they fell for sales talk that played heavily on the idea of would-be investors’ wish to invest their money ethically.

I have seen how carbon credits have emerged as a potential vehicle for fraud. The £38 million fraud case we mentioned earlier that prompted the government to rush through the closure of VAT loopholes. The case brought the issue of carbon credit fraud fi rmly into focus and highlighted how a chain of bogus companies could be created to trade carbon emission allowances and escape

detection. The theory behind the Kyoto Protocol was quite clear: carbon credits would give companies an incentive to cut their carbon emissions and then sell any spare carbon credits that they had. The reality was that people soon became aware that they could buy them VAT-free in one EU country and then sell them on in the UK. They would add the VAT to the price they sold them for in the UK but then keep the VAT money instead of paying it to the government. The result? A clear illegal profi t through VAT fraud. That route may now have been shut down by the government. But, as the Insolvency Service has shown, carbon credits are still a vehicle for large-scale investment-type fraud and VAT fraud.

Carbon credits are a relatively new concept compared to investments such as stocks and shares, jewellery, property or commodities. Yet they are very often being used in the same way that those involved in fraud have used many other such assets. There is no doubt that people looking to make fraudulent gains from carbon credits use the classic boiler room ruse of telephoning people to sell them something that is worth far less than they claim. It appears that many of them also resort to the odd spot of bribery and corruption to gain access to the carbon credits and the rights to sell them. When this is considered, it is clear that carbon credit fraud is simply a new twist on the old boiler room-style fraud. Carbon

credit fraud ticks all the boxes of the classic boiler room model: the recruitment of staff to carry out the straightforward selling of shares of little or no value, charging massively infl ated prices for them, attempting to portray an air of respectability and insider knowledge and sometimes operating abroad so as to be beyond the grasp of the Financial Conduct Authority (FCA).

Having handled many of the largest and most high-profi le investment fraud and VAT fraud cases, I know the importance of the right legal advice for anyone who believes they may have lost out on a scheme. The correct legal guidance is equally vital for someone arrested for working in such a scheme who believes that they are innocent of any wrongdoing. Such an idea is not so far fetched as it seems. After all, carbon credits are quite clearly a legitimate trading commodity. They are recognised as a legal means of trying to control pollution and are acknowledged as such by governments, international trade bodies and the hugest and most high-profi le corporations and organisations around the world.

Carbon credits are a new idea for this century – an attempt to put right some major wrongs. Unfortunately, it seems that they have created problems that their creators could never have envisaged.

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The Chambers UK Guide 2014 has classed Rahman Ravelli, which has offi ces in Halifax and London, as one of the very best practices for handling criminal fraud cases. In the Guide, Rahman Ravelli founder Aziz Rahman is given special mention for his abilities.

Chambers calls Mr Rahman “one of the most determined fraud solicitors in the country” and refers to him as a “fearsome litigator”, “extremely methodical” and “wonderful with clients”.

The 2014 Guide refers to the speed, effectiveness and excellence of Rahman Ravelli´s service and adds that “the real strength of the team is the quality of its members”.

The praise in the Chambers UK Guide 2014 comes just weeks after Rahman Ravelli was classed among the legal elite in The Legal 500, the international guide to law fi rms.

Aziz Rahman said: “At a time when we are expanding our commercial litigation arm and gainining high profi le successes, it is great to receive such an acknowledgement of our achievements.

“We have always placed all our efforts into giving our clients the very best and most proactive legal representation. It is very pleasing to see that this is being recognised by the people whose opinions are so valued.”

The latest accolade comes at the end of a year in which Rahman Ravelli has expanded and moved into a new headquarters in Halifax.

With Ian McCann having been taken on to head the fi rm’s bigger commercial litigation department and Rahman Ravelli’s Helen Lynch having been appointed chair of the Proceeds of Crime Lawyers Association (POCLA) in the north, the fi rm’s profi le is higher than ever.

Mr Rahman added: “Our staff use their talents solely for the good of our clients – our track record proves this. If others notice the great work we are doing then I am more than happy.’’

RAHMAN RAVELLI GAINS ANOTHER PRESTIGIOUS RANKING

Rahman Ravelli Solicitors have been ranked among the very best in the UK´s most infl uential legal guide.

“Our staff use their talents solely for the good of our clients – our track record proves this. If others notice the great work we are doing then I am more than happy.’’

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DEFENCE CASE STATEMENTS

Aziz Rahman and Jonathan Lennon explain why the right approach is crucial.

Any article on Defence Case Statements must also deal with the disclosure process generally in criminal litigation. The Defence Case Statement (DCS) is absolutely central to the whole process of disclosure and the proper drafting of the DCS can make all the difference. .

There is a huge amount of offi cial material on the subject of disclosure. Court guidance documents, case law, reports and reviews and so on. But the leading authority remains –R v H & C [2004] 2 Cr. App. R 179. It is the seminal case on disclosure and public interest immunity (PII). The case went all the way to the House of Lords. The authors represented ‘H’.

Nearly 10 years on from that judgment, disclosure remains a critical fault line in the larger and more complex prosecutions. In the years since R v H & C there has been increased pressure on defendants to set out their defence in the DCS more fully, and to engage more with the prosecution – making the whole process a little less adversarial.

It has to be remembered, of course, that care must be taken in all cases, great or small, when committing your case to paper. But the fact is that because so many additional factors are likely to turn on the drafting of the DCS in the more complex cases, a very great deal of consideration will have to be given at an early stage to a case which may have taken the prosecution years to prepare.

The CPIA 1996The Criminal Prosecution & Investigations Act 1996 (CPIA) sets out the framework for prosecution and defence disclosure in criminal litigation. The Act is the starting point, next is the Code of Practice made under it. After R v H & C the Attorney General issued his own Guidelines in 2005 and there have been numerous other guidance documents since; most importantly Lord Justice Gross’ Review of Disclosure in

September 2011. Section 6A of the Act deals with the

contents of the DCS. The DCS must set out: the nature of the accused’s defence (including any particular defences upon which he intends to rely); the matters of fact on which he takes issue with the prosecution (and why), particulars of the matters of fact on which he intends to rely, any points of law and the details of any defence witnesses sought to be relied upon, (s6C). The degree of detail now required in a DCS is much greater than was originally the practice and intention when the Act fi rst came into force.

The problem for a defendant is that getting it wrong may well lead to cross-examination about why a defendant appears to be saying something ‘different’ - or not disclosed in the DCS. In front of the jury, this can be devastating. But, worse than that, getting the DCS ‘wrong’ risks losing access to disclosure of material which can advance the defence case.

Issues Arising in Complex CasesThe issue that most frequently arises

in long and complex cases is disclosure of “unused” material held by the prosecution – the material the investigators have obtained but are not using to support their case.

By s3 of the Act the prosecution must; “disclose to the accused any prosecution material which has not been previously 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.”

In deciding what material passes this test the prosecution will consider the DCS. So, in a simple GBH case, if X says it was B that stabbed A, not me, then any material tending to suggest that B was at the scene of the crime or is a violent man must be disclosed to X.

Fraud/Dishonesty CasesBut what if X is not charged with GBH? What if he is charged, for example, with

involvement in a conspiracy to defraud involving a complex scheme that is, according to HMRC, a tax scam designed to rip-off the public purse? These cases are common enough and, usually a great number of the facts will not be in dispute. What is often at issue is something a lot more nebulous than whether X did something or not - the issue will be dishonesty. Advancing the defence case by maximising prosecution disclosure, when the real issue is something as a vague as the concept of dishonesty, means taking a very careful approach to the drafting of the DCS. In fact, it is in cases such as these that the drafting of the DCS is absolutely critical to the entire defence case.

Finding the negativesIn dishonesty/fraud cases an early consideration of why the Crown’s central theory is fl awed must be considered in depth. For example, if a fi nancial advisor has been running an investment scheme which turns out to be a tax dodge then the central question for the defence may well be (depending on the facts) why an alternative theory is more plausible – such as that X himself has been duped and did not know the real nature of the scheme. This may well lead onto disclosure of material tending to show that others, who were also involved but not charged, performed a similar role, or that others appear to be more likely candidates for the role ascribed to the defendant. This in turn can lead to disclosure of material such as email correspondence between those others revealing discussions about an aspect of the fraud where X is not named or included when he perhaps should be if what the Crown are alleging is true. It is fi nding the negatives as well as the positives that matters in such cases.

It will be appreciated that the more complex the case, the simpler the issues - such as knowledge or dishonesty - tend to become. As Churchill once said; “out of intense complexities, intense

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simplicities emerge”. But also it has to be considered that, in such circumstances, the more diffi cult the disclosure is around those issues.

Digital MaterialA classic example of the sort of problems encountered in the larger case is when the investigators have seized numerous computers and discs. Most of that digital material will be ‘unused’. A great deal of it will not even be considered. But, as it is in the unused material that the defence are most likely to fi nd their hidden gems, there must be a mechanism for the defence to at least know what the Crown have, even if it is not disclosed.

This is usually done with a schedule of unused material – basically a list of items arising from the investigation that are not part of the formal evidence in the

case. The list is called an MG6C. The defence can ask for items from the MG6C which may, or may not, lead to the prosecution agreeing to disclose those items, depending on relevance (which will usually depend on the contents of the DCS).

There have been signifi cant problems in a number of recent prosecutions where vast amounts of

material have been seized by the investigators and then not used. How does the Crown go about listing what remains? The answer lies in the Gross Review and the Attorney General’s Supplementary Guidance on Disclosure of Digitally Stored Material (July 2011). Explaining how this works in detail is impossible in this short article but the upshot is that the defence can (and

There is no one size fi ts all. There is a danger that the drafting of a DCS will become an art form or that the judiciary will start treating them like civil pleadings – if it isn’t pleaded you may not be able to rely on it.

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should) engage with the prosecution about how they should examine the computers that have been seized. For example, in the use of key search words. This can present opportunities for the defence and a certain amount of tactical consideration is bound to apply. So, for example, if the prosecution persist with refusals of perfectly proper requests to examine a computer for a certain key word – or look for a certain category of document - then a marker can be laid down at Court indicating that the defence are concerned about the disclosure process. It is not immediately the case that those markers become helpful. But many months later, when the prosecution may yet again be proving ineffi cient or diffi cult, the number of markers may have built up. The stage may well then be set for the defence to say that there have been legitimate concerns from the outset of the process and that those concerns remain; so much so that there may be enough to submit to the Court that the disclosure process being undertaken by the Crown cannot be trusted. Such applications should never be made lightly. But if they are well-founded then the only cure is to stop the case. The central document the Judge will look in assessing any such application will be the DCS.

THIRD PARTY AGENCIESThe investigators will frequently have to liaise with third party agencies before charge. In the case of X above charged with fraud, the third-party agency concerned may be the old Financial Services Agency (now the Financial Conduct Agency), but it can be any number of bodies such as local authorities or some other regulatory entity. The defendant will have engaged with that body at length pre-charge and that body may have expertise about the issue in hand that the police or HMRC or any other authority just do not have, for instance, the Pensions Regulator in a pensions fraud case.

Agencies like the FSA and the Pensions Regulator will often hand over very sizeable digital fi les of material to the prosecutors – of which only a portion is used in the case. This is fi ne – as long as there is a proper MG6C detailing what remains – i.e. the unused third-party material. If there isn’t one, it should be requested. Equally, the FSA/FCA, in our

example, may have information which helps show that Mr X was not the sort of candidate that the regulator was interested in. For example, the FSA/FCA may have investigated a number of similar cases but centred their investigations, not on those actually doing the selling, but on those who created the off-shore bank accounts as they were the ones that could be demonstrated to have acted dishonestly. It is not a knock-out point – they rarely are - but a number of small points like this, gathered in the disclosure process by the pro-active defender, is just the sort of material that helps to persuade a jury that the experts; i.e. those who deal with these cases every day did not consider X to be the sort of man they were interested in and therefore nor should the jury be.

When drafting the DCS, it has to be remembered that there are duties under the AG’s Guidelines, as well as the Codes

of Practice to pursue “all reasonable lines of enquiry” and to retain material (Codes of Practice; paras 3.5 and 5.1). Thus, a defendant can force the prosecution to go to the third party agency and obtain the material needed to make these sorts of points. If they refuse they risk having the trial stayed.

Getting the DCS RightThere is no one size fi ts all. There is a danger that the drafting of a DCS will become an art form or that the judiciary will start treating them like civil pleadings – if it isn’t pleaded you may not be able to rely on it. The issues at stake are far too important to allow that to happen but we are certainly moving in that direction. For those defendants facing large complex prosecutions their DCS may well have to address a whole multitude of issues at an early stage. Preparation is everything.

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RAHMAN RAVELLI NEWSLETTER 1113