Fraud victims are being ’”badly served ’” by the Serious Fraud Office (SFO), which only recovered £1.3 million in compensation last year - despite UK fraud losses of £717 million, lawyers say.
The y have analysed new figures that also reveal that between 2011 and 2014, the SFO failed to act within two months of a new investigation to implement any of the 15 restraint orders under which property is frozen and confiscated.
The figures were condemned yesterday by fraud lawyers who said that the small scale of asset recovery showed that law-enforcement agencies were struggling with insufficient resources.
Alan Sheeley, a partner and head of civil fraud and asset recovery at Pinsent Masons LLP, which carried out the analysis, said: “The small scale of asset recovery by the SFO on behalf of victims of fraud is disappointing.
“These figures simply serve to reinforce what our experience tells us, that law-enforcement agencies do not have the resources to make the recovery of assets on behalf of victims of fraud their top priority, and that victims of fraud must turn to the civil courts if they wish to recover their losses.”
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Victims should be making use of disclosure orders, freezing injunctions, search and seize orders, and passport delivery-up orders in the civil courts which were “all incredibly useful tools to prevent fraudsters and their ill-gotten gains from disappearing,” he said.
He added that if restraint orders were not secured quickly, the chances of recovering losses were diminished. But law-enforcement agencies were “not geared up” to move sufficiently quickly to safeguards assets by way of restraint orders.
Stephen Parkinson, a partner and head of criminal law at Kingsley Napley, said: “Given the sums involved in SFO investigations, this is a very poor showing.
“An absolute priority in any fraud case is to secure the money quickly through a restraint order, if possible before the fraudster knows that an investigation is under way. To leave it for two months on average is simply not good enough”
“Compensation through the criminal courts is usually the only means of redress for victims.”
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Experts yesterday said that given the poor results, fraud victims would be better off pursuing their losses through the civil courts.
Jonathan Fisher, QC, a white-collar crime expert, said: “Victims have always achieved better results in the civil courts where the focus of attention is asset recovery and not proving criminality.
However the SFO would be helped by a recent change in the law, he added, that will make it easier for them obtain a restraint order at the outset of a criminal investigation where parallel civil proceedings have not been instituted.
The SFO rejected the analysis as “self-serving and misleading”.
A spokesman said: “The SFO takes its responsibility to victims very seriously and does everything it can to ensure victims are compensated where appropriate. We deal with a small number of the most serious and complex fraud cases, as opposed to the very wide range of cases measured in KPMG’s barometer. No comparison can therefore sensibly be made.
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“Sums recovered as a result of proceeds of crime work are unpredictable and can vary significantly from year to year. In the last 18 months a total of £34 million has been recovered and of that £9.8 million was returned to victims in compensation.
“There is no immediate correlation between the opening of a criminal investigation and the securing of a restraint order. We always consider the early use of restraint and each case turns on its own facts.”
The analysis by Pinsent Masons found that just £1,221,884 was distributed in compensation to victims in 2013/2014. In contract the KPMG’s fraud barometer identified that the UK lost a total of £717 million as a result of high-value fraud in 2014, it said.
*The mother of the murdered black teenager Stephen Lawrence, Baroness Lawrence of Clarendon, is leading a list names and organisations who write in The Times today in support of a bill for stronger victims’ rights.
The Victims of Crime Bill will be tabled in the Commons today by Sir Keir Starmer, the former director of public prosecutions and now Labour MP for Holborn and St Pancras.
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The ten-minute bill has support from across the political spectrum and from bodies including the NCPCC, Women’s Aid, the Suzy Lamplugh Trust and Victoria Climbié Foundation.
It would give victims various rights in statute, such as that to have a review of a decision by police or prosecutors not to bring criminal charges; impose a duty on every police force to have victims’ services; and require police to record victims’ allegations and provide a right of appeal when this is not done.