Government announces independent review of disclosure and fraud offences

The government has announced the establishment of an Independent Review of Disclosure and Fraud Offences, to be chaired by barrister Jonathan Fisher KC. This is another step towards fulfilling the plans set out earlier in 2023, when the Fraud Strategy was published.

The government’s announcement states that there has been no independent review of fraud since 1986, when The Roskill Report on Fraud Trials took place. However, as we have explored further below, there have been many consultations and reviews since then, not least prior to when the Fraud Act was brought into force in 2010. The government notes that, since 1986, “the nature and scale of fraud has evolved considerably, now constituting over 40% of all offences in England and Wales.” Indeed, soon after the launch of the Fraud Strategy on 3 May 2023, we wrote in some detail about this fraud landscape and the scale of the challenges facing the government.

It is well-known that the amount of electronic data being created and used in our daily lives is growing constantly. This growth accelerated rapidly at around the time that smartphones became cheaper and more accessible to most people. Since then, the number and types of smart devices have increased further. Research conducted in 2016 by Northeastern University estimated that 1.7 Mb of data was created per second per person in the world; in 2021, a study by TechJury found that 1.145 trillion Mb of data was created in total every day. It is easy to see why even small criminal cases can involve large amounts of data, harvested from multiple devices. And this issue is only getting bigger.

A long-term problem

For many years, and particularly as the volume of electronic material involved in criminal cases – whether fraud or not – has risen dramatically, the ongoing suitability of the UK’s criminal disclosure regime, which is governed by the provisions of the Criminal Procedure and Investigations Act 1996 (CPIA), has been questioned.

There have been many examples of criminal cases collapsing – sometimes in high-profile circumstances – due to disclosure irregularities. These include R v Mouncher & Others in 2011 (a perverting the course of justice case), which resulting in a barrister-led investigation and a joint inspection of the compliance by the police and the Crown Prosecution Service (CPS) with rules on the disclosure of so-called unused material. After the collapse of another case at the end of 2017 (R v Allan) (a rape case), in January 2018 the BBC reported that more than 900 people had charges against them dropped in 2017 due to a failure by the prosecution to disclose evidence, an increase of 70% over the previous two years. That annual figure had risen to 1,648 by 30 June 2021.

The Serious Fraud Office (SFO) has suffered some embarrassing disclosure failures too, although there is disagreement as to the extent these related to the law or the SFO’s internal processes – or both. After the criminal trial of two former directors of Serco, Nicholas Woods and Simon Marshal, had started, serious disclosure failures came to light. This ultimately led to the acquittal of the two individuals, after the trial judge refused to adjourn the trial while the issues were being rectified. The subsequent review of the case, conducted by Brian Altman KC, reportedly cost the SFO nearly £360,000. Meanwhile, a report by Sir David Calvert-Smith into the handling of the Unaoil case contained a number of criticisms of the way in which the SFO dealt with disclosure.

The 2023 Fraud Strategy included a plan to launch an independent review which would, among other things, consider the current disclosure regime, and in particular how it can be “streamlined for cases with large volumes of digital material, reducing the significant burden on law enforcement and prosecutors.”

What will be examined?

The Terms of Reference for the Independent Review of Disclosure and Fraud Offences (the Review), which have also been published today, explain the remit and scope of the project, which is divided into two distinct parts:

• The Review will investigate the application of the disclosure regime (as set out in the CPIA) and the challenges arising for the investigation of all crime types, including fraud, that handle large volumes of digital material.
• The Review will explore barriers to the investigation, pursuit, and prosecution of fraud offences in England, Wales and Northern Ireland, and evaluate the nature of current penalties contained within the Act and explore the role of civil powers in tackling fraud.

The Review will report on its work in two parts. The first part will look at the operation of the criminal disclosure regime (as set out in the CPIA), focusing on disclosure “for crime types with a large volume of digital material”, and also looking at the Attorney General's Guidelines on Disclosure. The first report will be made in the summer of 2024.

The second part of the work will examine the framework of criminal fraud offences, specifically whether the nature of the UK’s current fraud offences “meet the challenges of modern fraud, including whether penalties fit the crime”, and investigate the scope of existing civil powers – this will include looking to whether a new type of fraud-specific order may be appropriate.

The Terms of Reference mention that this phase “will also consider making it easier for individuals to inform on associates in criminal fraud networks”. The Fraud Strategy included a little more detail on this point, stating: “To better target serious organised crime groups committing fraud, the independent review will also consider how provisions under the Serious and Organised Crime Act 2005 can be better used to persuade criminals to bring down associates and fraud networks by giving evidence for the Crown.”

A report on part two is expected in spring 2025.

Numerous past efforts

An independent review of this nature is undoubtedly overdue, although there has been robust and transparent scrutiny of the system on a number of occasions in the past.

A wide-reaching review and consultation also took place before the Fraud Act 2006 came into force. On 17 May 2004, the Home Office published a consultation paper on Fraud Law Reform, which contained proposals based on those made by the Law Commission in 2002, following a reference from the Home Secretary in 1998. The final provisions of the Fraud Act 2006 took into account this consultation, and significantly reformed the law in this area, in particular by introducing a general offence of fraud. At that time, of course, the CPIA had already been in use for almost a decade, and was already feeling the strain.

Since then, there has been much further discussion and debate on the topic, with a number of agencies weighing in with their views.

On 26 January 2018, the Crown Prosecution Service published the Joint National Disclosure Improvement Plan (updated in May of the same year) which was stated to represent “the shared commitment of the Crown Prosecution Service and the National Police Chiefs' Council to make sustainable change to the way we exercise our duties of disclosure”. This referred to the increase in digital material as a real complicating factor in disclosure exercises.

Also in January 2018, the House of Commons Justice Committee launched an inquiry into the disclosure of evidence in criminal cases, with a report published in July 2018 which made a number of recommendations aimed at a number of criminal justice agencies.

In November 2018, then Attorney General Geoffrey Cox, published his Review of the Efficiency and Effectiveness of Disclosure in the Criminal Justice System.

Establishing an independent review now, overseen by a very well-respected senior lawyer, shows that the government has been listening to lobbying from those working in the criminal justice system – on both the prosecution and defence side – who come up against the practical difficulties of how the disclosure system is operated on a daily basis.

The work of the Review will doubtless be watched very closely, in particular as disclosure is a key requirement of a fair trial. It can only be hoped that, this time, the output of the project will translate into a practical and effective reform of this important area of the justice system in an age where the volume and range of different forms of data is constantly increasing.