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Serious Fraud Office win appeal in the House of Lords as public outrage continues

by The Corner House and CAAT

first published 30 July 2008

PRESS RELEASE, 30 July 2008

The House of Lords, the UK's highest court, has overturned the High Court's ruling of April 2008 that the Director of the Serious Fraud Office (SFO) acted unlawfully when, acting on government advice, he terminated a corruption investigation into BAE Systems' arms deals with Saudi Arabia afterlobbying by BAE and a threat from Saudi Arabia to withdraw diplomatic and intelligence co-operation.

The High Court judgment was in response to a judicial review brought by the Campaign Against Arms Trade (CAAT) and The Corner House.

The law lords described the threat made by Saudi Arabia as "ugly and obviously unwelcome". Baroness Hale said that she would have liked to have been able to say that it was wrong to stop the investigation as it was "extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort." But she felt she had to agree that the SFO Director's decision was lawful because of the breadth of the Director's discretion.

Nicholas Hildyard of The Corner House said:

"Now we know where we are. Under UK law, a supposedly independent prosecutor can do nothing to resist a threat made by someone abroad if the UK government claims that the threat endangers national security.
"The unscrupulous who have friends in high places overseas willing to make such threats now have a 'Get Out of Jail Free' card -- and there is nothing the public can do to hold the government to account if it abuses its national security powers. Parliament needs urgently to plug this gaping hole in the law and in the constitutional checks and balances dealing with national security.
"With the law as it is, a government can simply invoke 'national security' to drive a coach and horses through international anti-bribery legislation, as the UK government has done, to stop corruption investigations."

Symon Hill of CAAT said:

"BAE and the government will be quickly disappointed if they think that this ruling will bring an end to public criticism. Throughout this case we have been overwhelmed with support from people in all walks of life. There has been a sharp rise in opposition to BAE's influence in the corridors of power. Fewer people are now taken in by exaggerated claims about British jobs dependent on Saudi arms deals. The government has been judged in the court of public opinion. The public know that Britain will be a better place when BAE is no longer calling the shots."

The law lords judgment confirms that the UK is in flagrant breach of its duty to implement and give force to the OECD Anti-Bribery Convention.

Both groups issued a statement calling for changes in the law to ensure that prosecutors can remain independent and are empowered to resist threats from abroad. They are also calling for measures to ensure that the Government cannot arbitrarily invoke national security without effective checks and balances to trump the rule of law.

NOTES

  1. The Campaign Against Arms Trade (CAAT) works for the reduction and ultimate abolition of the international arms trade.

    The Corner House is an environmental and social justice NGO. www.thecornerhouse.org.uk

  2. The full Opinions of the Lords of Appeal can be read at: http://www.thecornerhouse.org.uk/sites/thecornerhouse.org.uk/files/Lords-Judgment.pdf

    The High Court's final judgment can be read at: http://www.thecornerhouse.org.uk//sites/thecornerhouse.org.uk/files/JR-Judgment.pdf

  3. For a time line of the judicial review, including links to arguments presented and key legal documents and evidence, please go to ControlBAE Judicial Review

  4. The Serious Fraud Office is a UK government department that investigates and prosecutes complex fraud. It aims to contribute to "the delivery of justice and the rule of law."

  5. The "rule of law" simply means the best way of protecting everyone's rights from the arbitrary exercise of power is to apply and uphold legal rules impartially. Doing so requires an independent judiciary (prosecutors, judges, magistrates, courts) that acts "without fear, favour or prejudice". Any action that undermines the impartial application and upholding of the law undermines the rule of law.

  6. The OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions (known as the OECD Anti-Bribery Convention) is a multilateral treaty aiming to ensure that all 30 OECD countries, as well as 7 other non-member signatory countries, present a combined and united front against bribery and corruption of foreign public officials.

    Article 1 of the Convention requires parties to make it a criminal offence to bribe a foreign public official, which the UK did in Section 109 of the Anti-Terrorism, Crime and Security Act 2001.

    Article 5 of the OECD Anti-Bribery Convention makes various provisions to enforce Article 1. It rules out the termination of corruption investigations on grounds other than the merits of the case. Signatory governments undertake not to be influenced "by the potential effect [of an investigation or prosecution] upon relations with another State." Article 5 also prevents signatories from being "influenced by considerations of national economic interest" in deciding whether to terminate an investigation.