Serco trial collapses

The Serious Fraud Office (SFO) has been on the receiving end of a major blow, as the trial of two former Serco executives fell through after a failure to disclose evidence to the defendants. 

Serco is an outsourcing company that is involved with many governmental activities. In 2019, they paid £22.9m in fines after the discovery of three offences of fraud and two for false accounting on electronic monitoring contracts. The company had agreed to a deferred prosecution agreement (DPA), allowing it to avoid criminal charges and paid £12.8m in compensation to the Ministry of Justice in 2013 as part of a related civil settlement.

Nicholas Woods and Simon Marshall, former directors at Serco Geografix Ltd, were charged with using fraud and false accounting in order to artificially reduce profit margins on a contract relating to the monitoring of offenders for the Ministry of Justice. 

However, the judge at Southwark crown court told jurors to return a verdict of not guilty after the SFO found material pertinent to the case which had not been disclosed to the defence. While the anti-corruption agency sought for an adjournment to seek retrial, the judge refused. 

The SFO have said that they are now, “considering how best to undertake an assessment to prevent this from happening in the future.” The collapse of the trial is a massive blow to the anti-corruption agency, which has led the case since 2018.

This situation will likely increase scrutiny of DPAs, which were introduced in the UK in 2014 and are based on similar deals used in the US. While the SFO has made many such deals with large companies since its inception, 11 individuals charged in cases involved DPAs have been acquitted. 

The campaign group Spotlight on Corruption have described the collapse of the trial as a “disaster” for the SFO and the implementation of DPAs. They highlight that the UK is yet to successfully prosecute an individual where a DPA has been agreed with the company and call for an urgent review as to why this could be. 

Woods and Marshall have obviously welcomed the decision to discontinue the case, maintaining that they were “singled out for prosecution” in order to deflect blame from the company in the aftermath of wrongdoings found.