Financial crime – A brief overview of the differences between Scots law and English law

Financial crime covers a wide range of offences such as fraud, dishonesty, misconduct or misuse of information relating to financial markets, the handling of proceeds of crime and the financing of terrorism.

There are differences in how these crimes are dealt with in Scotland and England.

The prosecution

In Scotland, only the Crown Office and Procurator Fiscal Service (COPFS) can bring criminal prosecutions. COPFS is Scotland’s only public prosecution service and death investigation authority; they decide what action, if any, should be taken in criminal proceedings. They decide what charges are preferred and in which court cases shall be heard. Reports are received by COPFS from Police Scotland and other specialist reporting agencies such as the FSA and HMRC.

In contrast, in England, the Crown Prosecution Service (CPS), the Serious Fraud Office (SFO), The National Crime Agency (NCA) and other agencies can bring criminal prosecutions. A suspect can also, in certain circumstances, elect where the trial will be heard.

Police interviews

In Scotland, a suspect has a right to remain silent. The right to remain silent is absolute and no adverse inference can be drawn should that right be utilised.

In England, a suspect does not have the same right and negative inferences can be drawn where a suspect does not mention information that may later be relied upon in evidence.

Financial crime offences

Unlike in England and Wales where the Fraud Act 2006 applies, there is no statutory fraud act in Scotland. In Scotland, fraud is dealt with under the common law. Where the fraud is deemed to be a serious one, the matter will be passed to specialist prosecutors within the Economic Crime Unit of COPFS.

Statutory provisions covering financial crime in Scotland include the Bribery Act 2010 and the Proceeds of Crime Act 2002. Soon to come into force is the failure to prevent fraud offence (section 199, a provision of the Economic Crime and Corporate Transparency Act 2003). The new offence is aided by government guidance which sets out a framework of principles that organisations and relevant bodies need to put in place to avoid criminal liability.

It is of note that Scotland operates a self-reporting initiative which has been in force since 1 July 2011. The initiative is extended annually and offers businesses the opportunity to self-report conduct in their organisations which may be considered an offence under the Bribery Act 2010. The benefit to self-reporting is consideration of the case being referred to the Civil Recovery Unit within COPFS with a view to reaching a civil settlement rather than a criminal prosecution.

In contrast to Scotland, England operates Deferred Prosecution Agreements (DPA) for fraud, bribery and economic crime cases. DPAs involve agreements between the prosecution and a company whereby several conditions are agreed upon. The conditions may include the payment of compensation, a financial penalty and a corporate compliance programme.

In both Scots law and English law, there is provision for designated authorities to apply for Unexplained Wealth Orders (UWOs) as a tool for investigating the source of wealth in respect of assets over £50,000. To date, only the NCA and, more recently, the SFO, have secured UWOs in their fight against financial crime.

In the financial crime landscape, each case is dealt with on its own facts and merits, and there may be many factors that impact your defence, the reporting of your case and investigative decisions.

How we can help

If you or your organisation need expert insight or guidance on any of the issues highlighted, then please get in touch with sonia.cheema@andersonstrathern.co.uk.