The Financial Times (05 June 2013) reports that the SFO submitted to Mr Justice Eder that the Court should consider the cost to the taxpayer, as it continues to defend High Court proceedings brought by Vincent and Robert Tchenguiz, as a result of the agency’s ill-fated investigation into the collapse of Kaupthing Bank.
Mr Justice Eder apparently replied, “You are not suggesting that somehow the government should be treated differently from any other party? …it is something which it seems to me astonishing that counsel managed to sign.”
The Tchenguiz brothers have launched the largest claim against the SFO for damages in the region of £300 million.
It is difficult not to feel some sympathy for the UK taxpayer, and it is well known that the SFO’s budget has been reduced to £38.75 million in 2012.
However, that is not the full story. The Agency has taken on a large number of high profile investigations and they are guaranteed additional ring fenced funding from the Treasury if any investigation is going to cost more than £1.5 million. They have also been given £3.5 million to investigate the Libor scandal with promises of more money, should they need it.
The SFO has also managed to increase their coffers by an additional £6.6 million in 2011/12, as a result of various civil settlements and Civil Recovery Orders.
David Green QC, the SFO Director, must be looking wistfully across the Atlantic at his US counterparts and the incredible sums which they have recently levied as financial penalties for FCPA offences. The FCPA (Foreign Corrupt Practices Act) is the US equivalent of the UK Bribery Act 2010.
In 2010 the Department of Justice collected $870 million and the SEC an additional $148 million, although that dropped in 2011 to a mere $355 million, because of their aggressive attitude and use of Deferred Prosecution Agreements.
The SFO is responsible for bribery and corruption enforcement, and can look forward to using Deferred Prosecution Agreements in 2014 to raise some real money.
If you are facing an investigation by the SFO, contact specialist lawyers like us and speak to Jeffrey Lewis or Siobhain Egan.
