The prosecution of two former Serco executives by the UK Serious Fraud Office (SFO) collapsed earlier today after failures in the SFO’s disclosure process.

The SFO applied to adjourn the trial – which began on 30 March – in order to resolve those issues, but the application was refused and the jury was directed to return not guilty verdicts. The judge also criticised the SFO’s case more generally, saying that there are “real concerns in relation to the nature of the prosecution against these defendants”.

This follows a seven-year investigation into Serco’s contract with the Ministry of Justice for the supply of electronic tagging services. The SFO entered into a Deferred Prosecution Agreement with Serco back in July 2019 under which Serco paid a financial penalty of £19.2m and SFO’s costs of £3.7m. In December 2019 the SFO then filed charges against Simon Marshall (former Operations Director of Field Services within Serco) and Nicholas Woods (former Finance Director of Serco Home Affairs). The defendants were charged with fraud by false representation in relation to representations made to the ministry between 2011 and 2013. The SFO alleged that the two men falsely inflated Serco’s costs in order to artificially and dishonestly reduce the company’s reported profits by around £12m.

The collapse of this trial will add to ongoing concerns about the SFO’s ability to bring successful prosecutions against individuals following on from agreeing DPAs with the corporate, following a number of similar failed prosecutions of individuals in recent years.

The authors would like to thank Maria Zeber, trainee, for her contribution to this blog post.