Statement from The Corner House and Campaign Against Arms Trade
in response to Law Lords' judgments in BAE-Saudi appeal

by The Corner House and Campaign Against Arms Trade

first published 30 July 2008

The Corner House and Campaign Against Arms Trade statement issued this statement in response to the House of Lords overturning the judgment of the High Court that the Director of the Serious Fraud Office acted legally in terminating the SFO's investigation into alleged corruption by BAE Systems in its dealings in Saudi Arabia. The implication of the Lords ruling is that 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.


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.