New MOU between CMA and SFO promises closer working

The UK's Competition and Markets Authority (CMA) and Serious Fraud Office (SFO) are to work more closely together on criminal cartel cases going forward, according to a Memorandum of Understanding published on 22 October 2020 (here).

Both agencies will share information on incoming intelligence and new cases, and the SFO will, effectively, be referred the most serious and complex cases - where the skills found in the Roskill model are needed. Seen by some as an attempt by the SFO to extend its remit, and others as a much needed borrowing of manpower and investigative resources from the SFO by the CMA, it will be interesting to see how this process and indeed these combined forces work together in practice.

Whilst both agencies have been making headlines in recent years in relation to enforcement activity, the SFO's record of success with complex difficult prosecutions has been arguably mixed - with some high profile losses such as the Barclays prosecution, wins in respect of the globally coordinated penalties imposed by deferred prosecution agreements such as Airbus earlier this year, and much-debated legal battles over privilege issues and the extraterritoriality of its document production powers. It also continues to face criticism for the length of time taken to conclude its investigations, and this has not been improved by the impact of the pandemic on its ability to carry out its operational tasks.

For its part, the CMA has placed criminal cartel investigations on the back burner over the last few years. Out of seven investigations to date three have been closed due to insufficient evidence, with another prosecution collapsing due to evidence management issues. The CMA's last investigation was opened six years ago in 2014 (galvanised steel tanks), but resulted in two directors being acquitted and one director being handed a 6 month suspended sentence. Responding to criticism of its lack of successful criminal cartel prosecutions (eg the collapsed prosecution against BA executives in the 2008 fuel surcharge case) the CMA highlighted the difficulties in proving that an individual had acted dishonestly. While this requirement was removed in 2013 it hasn't yet resulted in an uptick in criminal cartel investigations. The CMA has instead increasingly focused on obtaining director disqualification orders. It will be interesting to see whether the MoU is in fact a sign of renewed CMA focus on criminal cartel investigations under the new rules.

Moreover, it remains unclear to what extent the upcoming Brexit deadline will impact on both agencies' ongoing and upcoming investigations, and whether and how these issues will be addressed by combining resource. Inevitably, we foresee issues with information sharing across borders, including through mutual legal assistance (MLA), increased political and diplomatic pressures; as well as budgetary constraints as a result of the ongoing economic downturn. Where the SFO has not publicly announced any new cases it has opened during the pandemic, many in the market will question why the existing resources are to be further stretched by the onboarding of new investigations in another area of law - which are unlikely to be an instant priority among the caseload. We will await the first SFO cartel case with great interest, albeit it may be a long wait.