White collar fraud costs us £ billions. Now Labour has a policy to tackle it

by Dan McCurry

“When a man steals your wallet, he gets a stretch. When he steals your pension, he gets away with it,” said Emily Thornberry as she launched her policy for Tackling Serious Fraud and White Collar Crime.

In this country, the Serious Fraud Office (SFO) is considered a bumbling fool, whose work has been cut back so much that last year it only brought a mere 20 trials, on a total budget of only £30m.

To put that in some context, fraud costs the British economy £73billion a year. It was with this thought that the shadow Attorney General travelled to America to see why US prosecutors have such a formidable reputation.

Thornberry arrived in New York and moved on to Washington. In these two cities she found fraud prosecution teams buzzing with the brightest talent. Young lawyers aggressively compete for opportunities in fraud, not because it pays well, but because this is where the big reputations are made.

What a contrast with this country. For years, decades, the SFO has been castigated as a disorganised waste of time and money. Trials collapse, fraudsters walk free, judges criticise, journalists attack, and politicians pour resources into a bottomless pit. Thornberry realised that over all these years of criticism, the focus has been wrong. The problem is not the institution. The problem is the law.

As a simple interpretation of the existing British law, a company can be prosecuted, but a person has to represent that company in the dock. So the directors distance themselves from the crime, and hire lawyers to obstruct the feeble powers of the police investigator. This confuses the situation and allows the company and its directors to wriggle off.

The Americans don’t allow for excuses. As far as they are concerned the entire board of directors should be made liable. This is called “Vicarious Liability”, and in Britain it only exists in civil law. For example, a consultant is liable for a junior doctor’s incompetence. Thornberry wants this principle applied to our fraud law, similar to the American way.

The Americans rarely go to court, but by threatening prosecutions, they leverage massive fines from companies. The largest fine was $3 billion. Currently British companies don’t feel threatened by the prospect of a trial, but they will take prosecutors seriously following this reform.

For a party looking for policies, this will certainly be implemented by a future Labour government. Of two of the most significant laws introduced by the Blair government, Proceeds of Crime and ASBO, this new law will certainly stand as their equal, and Thornberry should be elevated in her status for producing it.

Dan McCurry is a Labour activist who blogs here

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2 Responses to “White collar fraud costs us £ billions. Now Labour has a policy to tackle it”

  1. Felix says:

    ““When a man steals your wallet, he gets a stretch.”

    Nor true if you’re the Somerset Swindler, David Laws

  2. Rallan says:

    The Labour Party leading the charge against fraud? HA HA HA HA!!!! Expenses fraud, dodgy property schemes, misrepresentation, abuse of public funds, indirect electoral fraud, blatant nepotism … oh yeah, you’re all just so trustworthy!

    Someone does need to clean this up, but since you are part of the problem it won’t be left to you. Trust has to be earned. You have earned something else entirely.

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