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NOV
19

Soldier Falls Prey to Strict Firearms Laws – by Laura Saunsbury

The case of Army Sergeant Nightingale, which has received wide coverage in the media over the past week, is the latest example, and a particularly stark one, of Britain's draconian firearms laws. Sentenced to 18 months detention by a Court Martial earlier this month for possession of a pistol, his wife has now written to the Prime Minister David Cameron appealing to him to intervene and direct her husband's release.

Sgt Nightingale had been deployed to Afghanistan and Iraq, and, as a qualified SAS sniper, there can be no doubt that he is familiar with a wide range of firearms, and has shown himself to be responsible and competent in their use and handling. However, following the arrest of his fellow serviceman with whom he shared Army quarters, a search was conducted of their accommodation. In the course of that search, a Glock pistol was discovered amongst Sgt Nightingale's belongings. It was accepted that he had intended to have the pistol deactivated and mounted to present it as a souvenir to his squadron, and that there were several very good reasons why he had not got around to doing so prior to its discovery by civilian Police.

In principle, the offence of possessing a pistol, which is classified as a prohibited firearm, carries a mandatory minimum sentence of 5 years imprisonment. However, the courts are empowered by law to impose a shorter sentence or even no custodial sentence at all in cases involving "exceptional circumstances". Sgt Nightingale's barrister had argued for a suspended sentence.

Through his military record, Sgt Nightingale has not only demonstrated great courage, and a far greater sense of duty to his country than most, but also that he was prepared if necessary to pay the ultimate price for his country, namely his life. Indeed two of his comrades did just that and he returned to Britain with their bodies to see them laid to rest. Subsequently, whilst taking part in an ultra-marathon event for charity to raise funds for wounded servicemen and women, Sgt Nightingale collapsed and suffered a serious brain injury, which has had a lasting impact on his memory.

In the circumstances, it is difficult to think of a more compelling case to show leniency and to find exceptional circumstances so as not to impose an immediate term of imprisonment. One might imagine the general public would agree that a suspended sentence would be a fair and proportionate penalty for Sgt Nightingale, given his loyal service to the country and the lack of any criminal intent. Surely, it would be far better to allow him to continue serving his country than to spend our taxes on incarcerating him?

Mandatory minimum sentences for certain firearms offences were introduced in a vain attempt to stem the tide of violent gun crime in Britain. The sentence imposed here highlights once again the inherent risk of injustice in adopting a one size fits all approach.

Sgt Nightingale's case will be debated in Parliament on Tuesday. Further developments will be watched with interest by our firearms law specialist, Laura Saunsbury.

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NOV
13

New Approach to Environmental Crime

The Environment Agency has embarked upon a new intelligence-led approach to the detection of environmental crime, which has resulted in 335 successful prosecutions and has raised £1.7 million in fines and over £2million in seized assets under POCA.

The Guardian reports on 13/11/2012 that 16 individuals received custodial sentences.

There is no doubt that Environmental crime has increased hugely over recent years as a direct result of the UK's economic climate and that the Environment Agency is determined to prosecute.

If you are facing such an investigation or prosecution contact Jeffrey Lewis.

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NOV
09

Interim Committee to Take Forward Anti-Tax Avoidance Work

The Government has announced that it will appoint an interim advisory group to oversee the development of guidance on the new General Anti-Abuse Rule (GAAR).

The GAAR is being introduced to deter and counter abusive tax avoidance, while providing certainty, retaining a tax regime that is attractive to businesses, and minimising costs for taxpayers and HMRC.

In the last budget, the Government announced that a GAAR Advisory Panel would be established to give opinions on specific cases and to approve HMRC guidance on the new rule. HMRC will shortly begin the process of advertising for and appointing a Chair of the Advisory Panel, who will then advise HMRC on appointing the other panel members.

This process will not be complete until early next year. Until this time, an interim group of panel members led by Graham Aaronson QC will oversee the development of the new guidance, after it is published for public consultation in December.

Exchequer Secretary to the Treasury, David Gauke said:

"HMRC already has a strong set of weapons to tackle tax avoidance, and the GAAR will be a valuable additional tool in tackling artificial and abusive avoidance schemes. But we are also clear that it must address such schemes without creating uncertainty for business investment. I am pleased that Graham Aaronson will bring to bear the expertise that he and his colleagues have already brought to the GAAR Study Group Report to ensure that HMRC’s guidance is of practical use to all taxpayers."

Contact Jeffrey Lewis or Siobhain Egan for advice on these issues.

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NOV
09

Lessons for the SFO from the Kaupthing Case – by Keith Wood

In a blaze of publicity in front of the world press on 9 March 2011 the SFO conducted a series of dawn raids on numerous premises throughout the financial heart of Mayfair. The targets were some of the wealthiest and highest profile entrepreneurs that the SFO would ever investigate and this would, in all probability, be the biggest ever raid in the history of the agency. Over 130 investigators and police raided the business premises of R20 and Consensus Business Group as well as eight private residences and a simultaneous operation was launched in Iceland.

A little over 18 months later, on 15 October 2012, two sentences were written on the SFO’s news page. The investigation into the last remaining fragments of this sorry saga was to be dropped.

What on earth happened?

What was striking to me about this case from the very first day I was involved was the feeling I had that the SFO had completely failed to really grasp and understand the very nature of the transactions that they were investigating. It was apparent to me as the first pieces of information came out from the investigation that they did not in all probability understand the factual basis of the complex deals and arrangements that they had targeted as being corrupt. At Bishopsgate Police Station it was clear when I started to question the investigating and disclosure officers, and all too apparent that they did not themselves understand what they were investigating and had little more than a rudimentary grasp of the complex derivative trades and the financial structures and restructuring arrangements upon which they were focusing their questioning. They even failed to understand the actual roles of many of the persons involved in both the business and banking organisations which had been targeted.

It was here I feel the SFO, in my view, got it wrong from the start. Even though they must have had the explanations within the material under their control, which the SFO had accumulated long before the decision to arrest was reached, I felt the agency were determined to flex their muscles and take on this case; a war in which it would be shown in due course that they should never have engaged, as there was nothing to fight for. There was simply no crime. Perhaps the SFO were under pressure to find a villain within the piece, and lost focus in the hunt for such. Where such pressure came from, I am sure will arguably be revealed once the claims for damages for wrongful arrest are finally adjudicated upon.

In the early days there were failings. Information for the initial warrant had not been verified or independently reviewed. It contained factual errors which had not even been checked against the material that had been acquired during the early investigation, including the Section 2 interviews which had been carried out only months before the decision to plan the arrests was made. The information forming the background to the warrant, it was discovered, came largely from Grant Thornton who were themselves acting for Kaupthing Bank against one of the main targets in related civil litigation. Conflicts of interest which needed to be addressed and properly considered were ignored. In the words of the President of the Queen’s Bench Division, Sir John Thomas commented that the Crown Court Judge listening to the application for the warrant, “Needed to know of their [Grant Thornton’s] interest and the lack of independent verification of their conclusions.” He went on further to add, critically, “The Judge should have been put on notice so that he was alert to any possibility that the SFO was being used to promote the interests of one party to civil litigation.”

Unpleasant reading, indeed.

The raids were also very badly handled in my view. More concerned with media coverage, the SFO failed to appreciate that much of what they seized was LPP material, as there was ongoing litigation in this very matter being conducted from the premises that were raided. It is a frightening statistic in this case that over 40% of the material seized in this case was done so incorrectly and was returned shortly after the raids.

I feel that there was an overall inability to cope with the sheer volume of information in the possession of the team and coupled with a quest to find something damning, irrespective of the material which they controlled, a dangerous mix was brewing. A classic example of a theory being allowed to grow unchecked and be used to direct an investigation rather than objectively assessing the weight of the evidence in possession.

Lessons learned?

The case highlights the need for proper information to be objectively and independently assessed before any steps are taken. Government agencies should not be persuaded to take action by either media or other external pressures. Any investigation has to have proper funding, as the long-term costs when it goes wrong – as indeed this case shows it inevitably will – far outweigh any savings which are trying to be made at the front end.

Lastly, in a week in which it was disclosed that the former SFO chief executive at the time of this affair received an unapproved £400,000 redundancy package, it may be that many more lessons are to be learned from this affair. The first of these, I would suggest, is not to spend anything else at the moment as I would be rather concerned that a number of writs for substantial damages arising from this affair are on their way.

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NOV
07

What Progress on UK Libor Criminal Inquiry? – by Siobhain Egan

News that French prosecutors have begun a criminal Libor inquiry begs the question about progress on the UK criminal inquiry announced in July 2012 by the SFO.

Much has been made of the flurry of financial settlements that banks have made with US prosecutors e.g. Barclays’ fine of £290 million and it is rumoured that RBS could face a fine of up to £300 million. It appears that Barclays may have received a discounted penalty because they were the first to come forward, and that there are other banks lining up negotiations with prosecutors both sides of the Atlantic.

So far it looks lucrative for prosecutors, but this approach flies in the face of public opinion. A recent YouGov survey in early October concluded that 90% of respondents believe that bankers found guilty of market abuse should be sent to prison. These results echo the views of Martin Wheatley of the FSA, who has been quoted as saying that anyone who deliberately manipulates markets for their own profit could face up to seven years imprisonment and/or a £multimillion fine.

The simple truth is that these allegations will be impossible to successfully prosecute to the criminal standard of proof.

The roles of the Treasury and the BOE remain unclear in the Libor scandal; were the banks doing as they were told to do?

It is unlikely that any meaningful evidence will be found against those in senior positions at the banks, because of management structure and lines of communication.

The prosecutors may find some damming emails implicating traders, who are very much at the bottom of the pile, but prosecuting them alone will not resolve this situation fairly or reflect what the prosecutors and general public feel has occurred.

In September last year, the Treasury and the FSA had asked the then Director of SFO to begin a full investigation into the Libor scandal. He refused, explaining (correctly) that his budget had been severely reduced as a result of Treasury cuts and because of the current work load at the SFO.

It seems that the SFO have been allowed a sum to fund this inquiry but, let’s be honest, a quick cursory analysis of current criminal statutes and common law offences leads to the conclusion that it will be well-nigh impossible to successfully prosecute these offences. There could be nothing more devastating for the SFO to begin another high profile prosecution only for it to fall at the first hurdle.

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