The SFO’s New Guidance on Section 2 Interviews

On 6 June the SFO published new guidance on the conduct of interviews under section 2 of the Criminal Justice Act 1987 (“CJA”). A link to the new guidance can be found here. It replaces previous guidance, which had remained in place for many years.

A section 2 interview is the means by which the SFO compels an individual to answer questions which it deems relevant to an investigation it is undertaking. The CJA deprives the witness of the right to refuse to answer questions, either on the basis of a duty of confidence owed to a third party or because their answers would be self-incriminatory. The only permissible reasons for a refusal are that a truthful answer would cause the witness to reveal information protected by legal professional privilege (LPP) or, exceptionally, if the witness has a reasonable excuse not to answer. The quid pro quo for this compulsion is that the witness’s answers – the product of the interview – are inadmissible against the witness in criminal proceedings, apart from in narrowly defined circumstances, including if the answers are false or misleading.

Whilst section 2 interviews are a powerful investigative tool and have been conducted on thousands of occasions since 1988, the SFO’s practice in relation to such interviews remained, until recently, an uneventful legal backwater. That changed with R (Lord & others) v SFO [2015] EWHC 86. The Administrative Court held that the SFO had acted reasonably in refusing to permit the attendance of a firm of lawyers at section 2 interviews of a trio of witnesses where the same firm acted for the corporate suspect. The Court accepted the SFO’s position that, in the circumstances of the particular case, the presence of the lawyers could prejudice the SFO’s investigation.

The proposition that the presence of a particular lawyer could prejudice an investigation was a long-standing tenet of the SFO’s old guidance on section 2 interviews. Indeed, “prejudicing the investigation” and “delaying the investigation” were, in the old guidance, the only two criteria against which the SFO could refuse to permit a lawyer’s attendance at the interview. Aside from identifying these two criteria, the old guidance was largely impressionistic. It stated that the SFO would generally permit a lawyer to represent the witness in the interview. However, it did not explain how the SFO would exercise its discretion to exclude a particular lawyer on the basis of perceived “prejudice” or “delay”. Nor did it set out preconditions for the lawyer’s attendance at the interview.

Emboldened by the decision in Lord, the SFO decided to rewrite its guidance and change its practice on section 2 interviews. In September 2015, the SFO published what it curiously described as a “private and informal” consultation on possible new draft guidance. Simultaneously and unannounced, the SFO imposed changes to its section 2 procedures which are now promulgated in the new guidance. This was a stealthy but wise manoeuvre, probably intended to test whether these changes would provoke a judicial review. The fact that no one has challenged their legality during the last nine months will be exploited by the SFO to help defeat a future challenge to the new guidance. Having judged that sufficient time has elapsed and sufficient numbers of interviews conducted, the SFO now feels confident to introduce the new guidance. To a substantial extent, therefore, its significance lies in that it is a move from a de facto to a de jure situation.

The significance of this guidance should not be underestimated. It will be extrapolated and so is likely to be a harbinger for the practice of other investigative bodies which are empowered to conduct compulsory interviews. In curtailing the circumstances in which lawyers are permitted to attend such interviews, the SFO’s guidance is an outlier compared to equivalent guidance currently used by the NCA, FCA and HMRC. It may well within a few years become the norm.

What has changed?

The old concepts of refusing to permit the attendance of a lawyer on the basis of “prejudice” or “delay” are carried over into the new guidance. However, the new guidance contains the following innovative developments:

• Unlike the old guidance, the new guidance does not say that a lawyer will generally be allowed to represent the witness in the interview. Instead, a lawyer will only be allowed to attend the interview if the SFO “believes it likely that they will assist the purpose of the interview and/or investigation, or that they will provide essential assistance to the interviewee by way of legal advice or pastoral support”. The lawyer must apply to the SFO in advance of the interview to explain why any of these reasons is satisfied.

• Where the lawyer is unable to demonstrate – by giving appropriate undertakings – that they are not retained by, or owe a duty of confidence to, any other person “who may come under suspicion during an investigation”, they are unlikely to be allowed to attend the interview. The wording “may come under suspicion” suggests that the lawyer is being asked about persons who might become suspects in the future – an inherently unknowable proposition given that the SFO alone has the power to decide who to treat as suspects. However, the actual wording of the undertaking sought from the lawyer refers only to the present tense, i.e. it requires the lawyer to confirm that his/her firm “does not represent any individual or legal person who is a suspect in the investigation”.

• The lawyer must give undertakings prior to the interview that all documents provided before and during the interview, and the contents of the interview, will not be disclosed to any third party without the SFO’s prior written consent.

• Only one lawyer will be allowed to attend the interview apart from in exceptional circumstances.

• The lawyer must acknowledge in writing prior to the interview that he/she will respect certain “parameters” of the interview, including the proposition that they will not do anything which undermines the “free flow of full and truthful information” which the interviewee is legally obliged to give.

What has driven the changes?

As noted above, the SFO has always had the power to exclude a particular lawyer from a section 2 interview. Indeed, in Lord, the SFO did do lawfully in accordance with its old guidance. What, then, has motivated the SFO to expand its guidance so dramatically?

The SFO has not explained why it considers the old guidance to be deficient, nor has it identified the problems the new guidance seeks to remedy. Reading between the lines, however, the new guidance appears to be a response to a number of connected phenomena which the SFO perceives as having inhibited the obtaining of information during a section 2 interview, including:

• As a result of their legal representation, witnesses not being as forthcoming as they are obliged to be.

• The propensity of some lawyers to arrive en masse at the interview and/or obstruct or fashion the answers of the witness, perhaps by treating the interview as akin to a US deposition.

• Requests from the lawyers of the interviewee’s employer (whether a suspect or not) to attend the interview.

• If the lawyers of the interviewee’s employer are not permitted to attend the interview, to receive a briefing afterwards from a tame lawyer from another firm who acts for the witness and is permitted to attend.

• The evidence of the witness, as well as documentary evidence given to the witness, being shared with suspects (or other witnesses), thereby contaminating the investigation.

Is the new guidance justifiable?

If the aforementioned phenomena have been occurring in section 2 interviews, one can see why some elements of the new guidance are justified. If small armies of lawyers have descended on section 2 interviews and disrupted legitimate lines of questioning, whether through ignorance of their role or because they have conflicting professional interests, the SFO is justified in refusing their attendance. In most cases, there is no need for a witness to be represented by more than one lawyer. The SFO is also entitled to surmise that there is a risk of prejudicing the investigation if the witness is accompanied by a lawyer who also represents a suspect.

This last point may be perceived by some lawyers as an impermissible incursion into their own professional ethical duties to identify conflicts of interest, and to decide for whom they can act. However, even if a lawyer has properly concluded that he/she can represent a section 2 witness as well as a suspect, and that it would be in the best interests of the witness for him/her to attend the section 2 interview, their albeit sincere view should not be determinative. The SFO will pursue many lines of enquiry and interview numerous suspects and witnesses as an investigation evolves. The lawyer cannot, owing to their relative ignorance, see the investigation from the SFO’s perspective. The lawyer cannot make informed judgments about the risks that exist of the investigation being prejudiced if he/she attends the interview whilst acting for another client who is a person of interest in the same investigation. Only the SFO can make such judgments. As long as the SFO’s judgment is a reasonable one (which Lord says it needs to be), the SFO would be acting lawfully in refusing the attendance of such a lawyer.

To this extent, therefore, the SFO’s new guidance (including the undertaking about not acting for a suspect) is justifiable. However, when viewed as a whole, it is difficult to understand how much of the new guidance assists the SFO in making a more informed determination about the risk of prejudice to the investigation.

What problems exist with the new guidance?

The three most significant problems with the new guidance are as follows:

1. A lawyer must now justify to the SFO why his/her presence would further the interests of the interview. It is difficult to understand how the lawyer can be expected to say anything other than platitudes (e.g. “my client has asked me to attend because he wants my legal advice and pastoral care on any issues that arise during the interview”) given that the client will invariably not waive LPP. If the client wishes to be represented by a particular lawyer in the interview, and the SFO cannot reasonably object to the lawyer on the basis of prejudice or delay, that should be the end of the matter. Writing platitudes to the SFO does not help the SFO to determine whether the presence of the lawyer will cause prejudice.

2. A lawyer must now give an undertaking not to disclose documents disclosed before or during the interview – or to discuss the contents of the interview – with any third party without the SFO’s prior written consent. (Interestingly, the undertakings sought do not extend to discussing the subject matter of the interview with a third party in advance of the interview). In most cases, this undertaking will not be problematic, in that it will not serve the client’s interests to disclose or discuss these matters with a third party. However, this is not invariably the case.

The dilemma is that the lawyer will not receive any documents unless he/she gives the undertaking, but if he/she gives the undertaking, reading the documents may result in the decision that the client’s best interests are served by speaking to a third party. If the SFO subsequently refuses to consent to the lawyer speaking to a third party, the lawyer will then be unable to act in his client’s best interests. The artificiality of the undertaking is underlined by the fact that the SFO cannot prevent the witness from speaking to a third party. This point was acknowledged in Lord and is reflected in the new guidance, which asks, rather than orders, the witness “not to disclose anything said or seen in the interview to anyone except your lawyer”. Insisting on an undertaking which creates this dichotomy between what the lawyer and the client are permitted to do will lead to contrived results, e.g. the witness speaking directly to a third party about the interview and then reporting back to his lawyer, or the witness appointing a new lawyer who has not given the undertaking and who can therefore speak to the third party about the contents of the interview.

3. The proposition that the lawyer should attend the interview to facilitate the “free flow of information” has no basis in the CJA and ultimately suggests a misunderstanding about the role of the interview and the lawyer.

The purpose of a section 2 interview is to enable the witness to provide answers which are relevant to the investigation and which the witness is satisfied are accurate. The extra-statutory notion of a “free flow of information” ignores the possibility that the lawyer may properly intervene if he is concerned that the interviewee is being treated unfairly, is being misunderstood or misconstrued, or is speculating about events outside their knowledge.

Conclusions

The SFO’s new guidance on section 2 interviews is a mixed bag. Some elements of it are justifiable in curbing the worst practices of some lawyers, but others appear to serve no purpose at all. These elements will lead to contrived results and suggest a misunderstanding, or indeed cynicism, about the nature of the proper role performed by a lawyer. Above all, it is difficult to see why the old guidance hindered the SFO in resolving when a lawyer should be excluded. Lord is evidence that the old guidance was lawful and that it was reasonably applied by the SFO on the facts of that case. It is not clear how much of the new guidance enables the SFO to make a more informed determination about potential prejudice to an investigation that would be caused by the presence of a particular lawyer.

Whether the new guidance is applied reasonably will have to be seen. The SFO has no doubt reckoned that, post Lord, most corporates, fearful of being perceived not to cooperate with the SFO, will have little appetite for a judicial review. Most individuals will be guided by the conservatism of their employers. The most fertile ground for a judicial review will probably be the confidentiality undertakings the lawyer must now give. This begs the question as to whether the SFO will act reasonably in deciding whether to consent to the lawyer speaking to a third party about the interview, if the decision to do so is plainly driven by the client’s best interests.

Fundamentally, it is a moot point whether the new guidance will achieve its objective of ensuring that section 2 witnesses impart information which is comprehensive and accurate. The vast majority of witnesses – and all responsible lawyers – will share this objective. But making their lawyers jump through unnecessary hoops may not predispose the witness to assisting the SFO by giving a witness statement after the interview. There is in fact a risk that the SFO, in constructing this elaborate extra-statutory scheme, is alienating the very people upon whom a successful prosecution will depend. It is to be hoped that the SFO puts into practice the words found at the start of the new guidance; that “interviews under section 2 must be conducted with great care to ensure that they are carried out fairly”.