"30. It is common ground in these proceedings that the Director is a public official appointed by the Crown but independent of it. He is entrusted by Parliament with discretionary powers to investigate suspected offences which reasonably appear to him to involve serious or complex fraud and to prosecute in such cases. These are powers given to him by Parliament as head of an independent, professional service who is subject only to the superintendence of the Attorney General. There is an obvious analogy with the position of the Director of Public Prosecutions. It is accepted that the decisions of the Director are not immune from review by the courts, but authority makes plain that only in highly exceptional cases will the court disturb the decisions of an independent prosecutor and investigator: R v Director of Public Prosecutions, Ex p C  1 Cr App R 136, 141; R v Director of Public Prosecutions, Ex p Manning  QB 330, para 23; R (Bermingham and others) v Director of the Serious Fraud Office  EWHC 200 (Admin),  QB 727, paras 63-64; Mohit v Director of Public Prosecutions of Mauritius  UKPC 20,  1 WLR 3343, paras 17 and 21 citing and endorsing a passage in the judgment of the Supreme Court of Fiji in Matalulu v Director of Public Prosecutions  4 LRC 712, 735-736; Sharma v Brown-Antoine and others  UKPC 57,  1 WLR 780, para 14(1)-(6). The House was not referred to any case in which a challenge had been made to a decision not to prosecute or investigate on public interest grounds...
35. The evidence makes plain that the decision to discontinue the investigation was taken with extreme reluctance. As the Director put it in his second witness statement (para 11):
“The investigation and prosecution of serious crime is a major public interest that the SFO exists to promote. My job is to investigate and prosecute crime. The Al Yamamah investigation was a major investigation. The idea of discontinuing the investigation went against my every instinct as a prosecutor …”
The Attorney General on 13 December 2006 was said to be “extremely unhappy” at the implications of dropping the investigation at that stage. What determined the decision was the Director’s judgment that the public interest in saving British lives outweighed the public interest in pursuing BAE to conviction. It was a courageous decision, since the Director could have avoided making it by disingenuously adopting the Attorney General’s view (with which he did not agree) that the case was evidentially weak. Had he anticipated the same consequences and made the same decision in the absence of an explicit Saudi threat it would seem that the Divisional Court would have upheld the decision, since it regarded the threat as “the essential point” in the case...
41. The Director was confronted by an ugly and obviously unwelcome threat. He had to decide what, if anything, he should do. He did not surrender his discretionary power of decision to any third party, although he did consult the most expert source available to him in the person of the Ambassador and he did, as he was entitled if not bound to do, consult the Attorney General who, however, properly left the decision to him. The issue in these proceedings is not whether his decision was right or wrong, nor whether the Divisional Court or the House agrees with it, but whether it was a decision which the Director was lawfully entitled to make. Such an approach involves no affront to the rule of law, to which the principles of judicial review give effect (see R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions  UKHL 23,  2 AC 295, para 73, per Lord Hoffmann).
42. In the opinion of the House the Director’s decision was one he was lawfully entitled to make. It may indeed be doubted whether a responsible decision-maker could, on the facts before the Director, have decided otherwise...
43. It is common ground that had the Director ignored article 5 of the OECD Convention, an unincorporated treaty provision not sounding in domestic law, his decision could not have been impugned on the ground of inconsistency with it. But the Director publicly claimed to be acting in accordance with article 5. The claimants accordingly contend (1) that it is open to the domestic courts of this country to review the correctness in law of the Director’s self-direction; (2) that our courts should themselves interpret article 5; (3) that the Director’s interpretation should be held to be incorrect; and (4) that the Director’s decision should be quashed. Each of these steps in the argument is, in the judgment of the House, problematical...
47. In my opinion, it is unnecessary and undesirable to resolve these problematical questions in this appeal, for two reasons. First, it is clear that the Director throughout based his adherence to article 5 on a belief that it permitted him to take account of threats to human life as a public interest consideration. Secondly, the Director has given unequivocal evidence that he would undoubtedly have made the same decision even if he had believed, which he did not, that it was incompatible with article 5 of the Convention. I cannot doubt, given its conclusion in para 41 above, that he would indeed have done so."There will be all kinds of excitable commentary on this case and rightly so but again the decision has been taken, as would be expected, on narrow technical grounds -
Question: did the director of public prosecutions have the authority to take the decision to call a halt to the corruption case?
Result: Government win.
The Corner House who pursued the case along with the Campaign Against the Arms Trade say:
Today, the law lords ruled that the Director of the Serious Fraud Office had acted legally in terminating the SFO's investigation into alleged corruption by BAE Systems in its dealings in Saudi Arabia. The SFO's decision followed lobbying by BAE and threats from Saudi officials to cut off intelligence links with the UK if the investigation proceeded.
The law lords' ruling overturns a judgment by the High Court in April 2008, which ruled in favour of Campaign Against Arms Trade and The Corner House in their joint judicial review of the SFO's decision.
During the High Court hearing, Lord Justice Moses posed a key question: if a powerful foreign state makes a threat against our legal system, is there anything a lawyer or court can do? Or is the law powerless in the face of threats from abroad?
His answer, based on access to unedited secret documents that were disclosed because of the court proceedings, was that it is unlawful for a prosecutor to surrender to such threats unless every other option had been exhausted and unless the threat was imminent. The High Court therefore quashed the SFO decision.
The SFO immediately appealed, and the law lords -- who did not see the unedited secret documents -- have now given a definitive answer on the law as it stands. Their conclusion? The law is indeed powerless.
The law lords have done what was asked of them. They have clarified the law, ruling that national security always trumps the rule of law. The implications are clear: under UK law, a supposedly independent prosecutor can do nothing to resist a threat made by someone abroad if the UK government asserts that the threat endangers national security. The unscrupulous with friends in high places overseas who are willing to make such threats now have a legally valid 'Get Out of Jail Free' card. With the law as it is, a government can simply invoke 'national security' to drive a coach and horses through international anti-bribery legislation, as the UK has done in this instance, to stop corruption investigations. The dangers of abuse are obvious.
The Corner House and CAAT accept that the Government has a duty to protect the public from threats to national security. It is critical that the public has absolute confidence and trust that the Government is not abusing national security arguments in order to avoid embarrassment (in this instance, offending Saudi Arabia) or to pursue the commercial interests of favoured companies, such as BAE, or to get out of its obligations under international law. Such confidence and trust is especially important at a time of heightened concern about international terrorism.
Under current constitutional arrangements, however, the courts give wide discretion to the Government on decisions that invoke national security. For that reason, the evaluation of the national security threat upon which the Serious Fraud Office based its decision was never considered in the judicial review hearings.
It is known, however, that the UK's Secret Intelligence Service (SIS) was not itself the author of the assessment of the risks posed by the Saudi threats upon which the SFO Director based his decision. The SFO Director states himself that he never saw any of the national security assessments. Moreover, documents released during the judicial review proceedings clearly indicate that national security concerns were raised only after the SFO had turned down commercial and diplomatic arguments for stopping the investigation into the BAE-Saudi arms deals.
If the public is to be assured that criminal investigations and prosecutions are dropped only in the face of genuine national security threats, and if the rule of law is not to be compromised, CAAT and The Corner House believe that Parliament should urgently review the political, legal and constitutional issues raised by this judicial review.
The Corner House and CAAT are calling for changes in the law so that prosecutors are given explicit powers to resist threats to the rule of law unless those threats create "a situation of necessity".
There is also an urgent need to strengthen parliamentary scrutiny of the advice upon which any decision to halt a criminal prosecution or investigation on national security grounds is taken. In that regard, CAAT and The Corner House believe there is an overwhelming case for modernising the current constitutional arrangements between the government, the judiciary and parliament in order to give the courts greater scope to hold the government to account if it misuses its power in the name of national security.
Since The Corner House and CAAT launched this legal challenge, we have received massive public support. 125 MPs from all the main political parties, along with over 130 NGOs, have called for the investigation to be reopened. We know that these issues are of widespread concern to many people not only up and down this country but also throughout the world. But far from acting on the public concerns, the Government is instead seeking to remove national security decisions still further from judicial and parliamentary oversight by new clauses in its draft Constitutional Renewal Bill.
At the same time, supporters of BAE have repeated highly questionable statements and statistics about the number of British jobs dependent on Saudi arms deals. The reality is that BAE, a multinational company, has made considerable cuts in its UK workforce over recent years, while shifting its focus to the USA. Once the SFO investigation had been dropped, and the latest Saudi arms deal signed, BAE admitted that most of the jobs generated by the sale would not even be based in the UK.
The SFO, BAE and the Government might think that with today's judgments from the law lords, all is now over. But the real challenges have only just begun. We call on all those who are alarmed at the gaping holes in the law revealed by the judgments today to join us in:
- Pressing for changes to the law to ensure that our prosecutors can remain independent and are empowered to resist threats from abroad.
- Ensuring that national security advice can be scrutinised by the courts and by parliament so that the Government cannot arbitrarily invoke national security -- without effective checks and balances -- to trump the rule of law.
- Opposing the clauses in the draft Constitutional Renewal Bill that would prevent a judicial review like ours from ever being taken in the future and that would give the Government 'carte blanche' to invoke national security to stop a fraud investigation or criminal prosecution without effective checks and balances.
- Insisting that the Government fulfil its international obligations to cooperate with requests for assistance from the US and Swiss authorities in their investigations into BAE's dealings with Saudi Arabia.
- Pressing the OECD to clarify the circumstances under which national security concerns can legitimately be invoked to exempt signatories from fulfilling their obligations under the OECD Anti-Bribery Convention.
- Pressing the Serious Fraud Office to re-open its investigation into BAE's dealings with Saudi Arabia given that circumstances have changed since the investigation was dropped in December 2006. Much of the information that Saudi Arabia was apparently concerned to keep out of the public domain is now public knowledge.
- Exposing the preferential access of arms companies, such as BAE, to the Government, and campaigning to end public subsidies to the arms industry."