Pictured above: Charles Arrand
Business could be left in limbo for months on the future of the
Serious Fraud Office, an expert has warned.
Charles Arrand, a partner in the Birmingham office of
international law firm DLA Piper, urged the new Government to make
clear its intentions as soon as reasonably possible.
His comments come as political pundits speculate that the
much-vaunted plan to abolish the SFO and replace it with a
super-agency to fight white-collar crime may never happen because
of the financial crisis.
Ministers are publicly committed to merging the SFO, plus part
of the Financial Services Authority and the Office of Fair Trading,
into one large economic crime agency that would tackle bribery,
fraud and insider trading. Other departments, such as the City of
London police fraud unit and parts of the Criminal Prosecution
Service (CPS) , might also be folded in, it has been mooted.
However, with the top priority being reduction of the budget
deficit, a question mark has now emerged over whether the
reorganisation can be afforded.
Treasury officials are said to be working on detailed costings
for presentation to a cabinet committee later this year.
It all comes as the SFO has mounted a series of arrests and
prosecutions.
Mr Arrand said: "Business is anxious for clarity in these
matters.
"It is very important that the regulatory requirements on
business are clear, that business knows where it stands with its
regulators and what is expected of it.
"What is being mooted is a massive reorganisation and is never
going to happen overnight. But the longer the uncertainty lasts the
more uneasy business will become.
"Obviously it will take time for Ministers to decide whether the
country can afford the cost involved but there is a danger that if
this drags on then business will in effect be left in limbo - will
they have to adjust to another major shake-up, with all the
implications for cost and manpower, or be left instead with a
case of better the devil you know."
George Osborne, the chancellor, pushed the idea of creating the
super-agency while in opposition. He claimed during the election
campaign that it would "sweep away the confused, multi-agency
approach and create a single, focused body with the mandate,
expertise and authority needed to tackle serious economic
crime".
Setting up the super-agency would require new legislation. The
government decided not to include this in the first programme of
coalition bills outlined in the Queen's speech, and it is not yet
clear whether the agency would be given new powers, for instance to
impose liability on corporations, strike plea bargains, or offer
immunity to whistleblowers.
Mr Arrand added: "The legal profession will be looking very
closely at any proposals which come forward particularly in
relation to plea bargains, which has been a cause of much recent
controversy and interest."