Hayes, R. & Palombo, R. [2025] UKSC 29 (23 July 2025)

Following their UK acquittal for LIBOR rigging, the SFO compelled two bankers to give evidence for a US prosecution using a section 2 notice. The Supreme Court ruled this was lawful, confirming the SFO can use such powers to assist foreign authorities.

Facts

The appellants, Mr Hayes and Mr Palombo, were bankers prosecuted in the UK by the Serious Fraud Office (SFO) for conspiracy to defraud relating to the London Interbank Offered Rate (LIBOR). They were acquitted by a jury in the Crown Court in 2019. Subsequently, in 2021, the United States Department of Justice (DOJ) was prosecuting another individual for related offences and sought evidence from the appellants. The DOJ made a formal Letter of Request (LOR) for mutual legal assistance to the UK. The SFO, acting as the designated authority, used its compulsory powers under section 2(3) of the Criminal Justice Act 1987 (‘the 1987 Act’) to issue notices compelling the appellants to attend interviews and provide evidence. The appellants challenged the lawfulness of these notices through an application for judicial review, arguing the SFO had no power to use section 2 for the purpose of assisting a foreign investigation. The High Court and the Court of Appeal dismissed their claim, leading to this appeal to the Supreme Court.

Issues

The central legal issue before the Supreme Court was whether the SFO had the statutory power under section 2 of the 1987 Act to compel individuals to provide evidence in response to a request for mutual legal assistance from an overseas authority. This involved determining the scope of the SFO’s investigative powers and whether they extended beyond purely domestic investigations. The appellants also raised arguments based on the principles of double jeopardy and the privilege against self-incrimination.

Judgment

The Supreme Court unanimously dismissed the appeal, holding that the SFO’s actions were lawful. Lord Reed gave the sole judgment.

Statutory Interpretation of the 1987 Act

The Court undertook a detailed analysis of the 1987 Act’s purpose and text. The appellants argued that the SFO’s power to conduct an ‘investigation’ under section 1(3) was limited to investigations of suspected ‘serious or complex fraud’ initiated by the SFO itself for potential UK prosecution. They contended that since they had been acquitted, there was no ongoing SFO investigation into them which could justify the use of section 2 powers.

The Court rejected this narrow interpretation. It held that the SFO’s functions inherently include cooperation with international partners. Lord Reed stated:

The SFO’s functions are not confined to the investigation and prosecution of domestic offences. They also include, by virtue of section 1(3A) of the 1987 Act and our international obligations, the provision of assistance to overseas authorities. [para 45]

The court reasoned that assisting the DOJ in response to the LOR was a legitimate part of the SFO’s functions. The process of gathering the requested evidence constituted ‘an investigation’ for the purposes of the Act. To hold otherwise would frustrate the UK’s international legal obligations to combat transnational crime.

A narrow construction of the word ‘investigation’ in section 1(3) would substantially undermine the UK’s ability to provide mutual legal assistance in cases of serious and complex fraud, and would be contrary to the clear legislative intent and the international context in which the 1987 Act operates. [para 52]

Double Jeopardy and Autrefois Acquit

The appellants argued that being compelled to give evidence about matters for which they had been acquitted violated the principle of double jeopardy, specifically the rule of ‘autrefois acquit.’ The Court found this argument to be misconceived. Lord Reed clarified the scope of the principle:

The principle of autrefois acquit is a bar to subsequent prosecution; it is not a shield against being called as a witness in the prosecution of another. The appellants are not being placed in jeopardy a second time. They are being treated as witnesses, not as defendants. [para 68]

The Court affirmed that the principle protects against re-prosecution for the same offence, not against being required to give evidence as a witness in a separate case against a different person.

Privilege Against Self-Incrimination

The appellants’ final argument concerned the privilege against self-incrimination. The Court noted that section 2(8) of the 1987 Act provides that answers compelled under a section 2 notice are not admissible in evidence against the provider in criminal proceedings in the UK (subject to exceptions like perjury). While this statutory protection does not extend to foreign jurisdictions like the US, the SFO had obtained an assurance from the DOJ that the evidence provided by the appellants would not be used against them in any US criminal prosecution. The Supreme Court found this assurance to be a sufficient and appropriate safeguard of the appellants’ rights in the context of international cooperation.

Implications

This decision is significant as it provides a definitive clarification of the SFO’s powers in the context of international legal cooperation. It confirms that the SFO can use its stringent domestic investigatory tools, including section 2 notices, to gather evidence on behalf of foreign authorities in cases of serious fraud. The judgment reinforces the importance of mutual legal assistance in tackling global financial crime and clarifies that an acquittal in the UK does not create a lifelong immunity from being compelled to testify as a witness in related foreign proceedings. It also highlights the role of diplomatic assurances in balancing the state’s duty to cooperate internationally with the protection of individual rights.

Verdict: The appeal is unanimously dismissed.

Source: Hayes, R. & Palombo, R. [2025] UKSC 29 (23 July 2025)