The Serious Fraud Office v Barclays Plc & Anor

Permission to prefer a voluntary bill after dismissal of an indictment is exceptional. It ordinarily requires a clear or obvious error of law, new evidence, or serious procedural irregularity. The High Court must not retry the factual evaluation unless the Crown Court’s view was wholly unreasonable.

For criminal offences requiring mens rea, corporate liability ordinarily depends on the identification principle. The relevant individual must have full discretion to act independently and authority to complete the transaction or perform the function in question. Seniority, negotiating autonomy, or de facto influence is insufficient where the company’s board or committee retained final authority. Civil attribution principles and vicarious liability do not generally extend criminal corporate liability.

The Serious Fraud Office applied for permission to prefer a voluntary bill of indictment against Barclays Plc and Barclays Bank Plc after Jay J, sitting in the Crown Court at Southwark, dismissed the charges against them on 21 May 2018.

The proposed indictment alleged statutory conspiracy to commit fraud by false representation under the Fraud Act 2006, and unlawful financial assistance under the Companies Act 1985. The alleged conduct concerned capital raisings involving Qatari investors, advisory service agreements, and a US$3 billion loan. The central issue was whether the alleged dishonest acts and states of mind of senior Barclays officers could be attributed to the companies.

1. Application dismissed. The application to prefer a voluntary bill of indictment was refused.
2. The procedure was exceptional. Under the applicable practice direction, consent should be granted only where good reason to depart from the normal procedure was clearly shown and the interests of justice required it. The recognised grounds ordinarily included a clear or obvious error of law, new evidence unavailable earlier, or serious procedural irregularity. Exceptionality described the circumstances but was not itself the legal test.
3. The court accepted Jay J’s factual account and evaluation. On such an application the High Court was not entitled to undertake a fresh evaluation of the same evidence. A different view could ordinarily be reached only if the Crown Court’s assessment was wholly unreasonable.
4. For criminal offences involving mens rea, the governing approach remained the identification principle in Tesco v Nattrass [1972] AC 153, as reaffirmed in later criminal authorities. The question was whether the individuals had full discretion to act independently of the board or other controlling organ and authority to complete the relevant transaction or perform the relevant function. General seniority, negotiating autonomy, or authority to bind the company in some transactions was insufficient.
5. The broader approach in Meridian Global Funds Management (Asia) Ltd v Securities Commission [1995] 2 AC 500 did not displace the criminal identification principle. A special rule of attribution could be fashioned only where construction of the particular statutory offence required it. The Fraud Act 2006 supplied no basis for such a rule on the assumed facts.
6. JV, CL and RJ had negotiated with substantial autonomy, but the Board, Board Finance Committee, or Group Credit Committee retained authority over the final capital raisings and loan. They were not authorised to complete the transactions as pleaded and lacked the required full discretion. The alleged dishonesty therefore could not be attributed to Barclays.
7. The same conclusion applied to the unlawful financial assistance count. Although the statutory purpose of the Companies Act 1985 might leave more room for a special attribution rule, the SFO relied on dishonesty which could not be attributed to Barclays. Nor, on the assumed facts, could Barclays itself be said to have provided the loan for the prohibited purpose.
8. The dismissal of the application did not determine the separate criminal proceedings against the individual defendants.

This was a first-instance application in the High Court. The application followed Jay J’s dismissal of the charges against Barclays in the Crown Court at Southwark on 21 May 2018.