COMPARATIVE LEGAL STUDY THE ROLE OF FORENSIC ACCOUNTANTS

COMPARATIVE LEGAL STUDY THE ROLE OF FORENSIC ACCOUNTANTS IN CRIMINAL PROCEEDINGS Professor Rob Mc. Cusker USAID Government Accountability Initiative (GAI) NOVEMBER 5, 2020 USAID Government Accountability Initiative 1

Overview • Conduct analysis of comparative legal systems focussed particularly on the Balkan region – Engagement and use of forensic accountants • Focus – Legal status of forensic accountant – Criminal, adversarial proceedings – Procedural matters only • Analysis of the Serbian legal system – Status and role of forensic accountant in criminal proceedings • Analysis of comparable legal systems on the status and role of forensic accountant within criminal proceedings • Provision of recommendations on potential refinement of the Serbian normative framework – Criminal Procedure Code – LOSJA (Law on Organisation and Jurisdiction of Government Authorities in Suppression of Organized Crime, Corruption and Other Severe Criminal Offences USAID Government Accountability Initiative 2

Overview • Context of the Study – ‘Expert’ • Any form of expert witness – ‘Forensic accountant’ • A forensic accountant expert witness – Study argues • Capacity of a justice system to meet challenges of organized crime and corruption demonstrated by – How expert evidence is permitted to be adduced? – How the expertise of proffered experts is determined? – How expert evidence is reported and utilized? USAID Government Accountability Initiative 3

THE NATURE, ROLE AND SCOPE OF EXPERT WITNESSES IN CIVIL (INQUISITORIAL) AND COMMON (ACCUSATORIAL) LEGAL SYSTEMS • Common Law Tradition – Public prosecutor and Accused • Select own experts – Act for their clients not the court • Civil Law Tradition – Court appoints experts • Auxiliaries to the court – Special status • Undertake work under discretion of the court rather than the parties USAID Government Accountability Initiative 4

• The Equality of Arms Principle – Article 6 European Convention on Human Rights • …(d) to examine or have examined witnesses against him [sic] and to obtain the attendance and examination of witnesses on his [sic] behalf under the same conditions as witnesses against him [sic…] THE EQUALITY OF ARMS PRINCIPLE • Each side in a case to have a reasonable opportunity to present its case in a way which does not place it at a clear disadvantage compared to the other parties – Equal access to equal information – Equal opportunity to present arguments and observations – Equivalent status for defence experts as that granted to prosecution’s experts • Assessment on a case by case basis – Procedure as a whole not one particular part of it • Accusatorial system – Defence expert must be placed on same footing as prosecution expert • Inquisitorial system – Expert deemed to be neutral whether or not her/his opinion advantage or disadvantage the defendant USAID Government Accountability Initiative 5

• Use of forensic accountants and potential breach of the principle of equality of arms – Case by case basis THE EQUALITY OF ARMS PRINCIPLE SERBIA • Actions of the expert, not • Presence of the expert • Criminal Procedure Code – No distinction between categories of expert • Article 114 – Expert is ‘…a person who possesses the requisite professional knowledge for establishing or evaluating a fact in the proceedings’ – Important? • Presence and maintenance of principle of equality of arms not the skillset of the expert USAID Government Accountability Initiative 6

• Criminal Procedure Code infers the existence of the principle – Article 16 THE EQUALITY OF ARMS PRINCIPLE SERBIA • ‘…the court is required to make an impartial assessment of the evidence examined and based on the evidence to establish with equal care both the facts against the defendant and the facts which are in his favour. ’ – Article 117 • Defendant can make a motion for an expert examination. – Article 68 • Defendant has right to present facts and propose evidence in her/his defence/to pose questions to any witness presented. USAID Government Accountability Initiative 7

• Context – Engagement and use of expert witnesses controlled by Criminal Procedure Code 2011 (as amended) • Articles 113, 114, 115, 117, 118, 119, 120 and 124 OVERVIEW OF ISSUES IN RELATION TO EXPERT WITNESSES IN SERBIA – Opinions of experts not binding upon a judge but have decisive influence on outcome of trial • Judge Simmons: • ‘…the opinion of an expert who has been appointed by the relevant court to address issues in the case is likely to carry significant weight in that court’s assessment of those issues. ’ – Experts appointed where judges lack technical knowledge about some of the facts • Important that experts are qualified, experienced and objective finders of fact • Important that principle of equality of arms USAID Government Accountability Initiative adhered to 8

• SERBIA – No time limit on validity of expert witness’ licence • Contrary to guidance of European Expertise and Expert Institute (EEEI) and European Commission for the Efficiency of Justice (CEPEJ) OVERVIEW OF ISSUES IN RELATION TO EXPERT WITNESSES IN SERBIA – No examinations for entry into the expert witness profession • Doubt cast on quality of selection process and witnesses engaged – Law of Expert Witnesses (Article 6) provides qualification criteria • No method for checking bona fides or verifying expertise – Newly appointed experts with little or no experience of procedure • Delays – Narrow pool of experts utilised by the courts • Pool overburdened with work • Leading to procedural delay – No obligation for expert witnesses to regularly update skillset USAID Government Accountability Initiative • Pool may lack up to date knowledge that new but underutilised 9

• International convention and guidance provided by CEPEJ and EEEI – Experts should establish facts but not comment on issues of law • CEPEJ – ‘The work of the experts ends where the appraisal of the facts begins, which is the task of the judge alone’ OVERVIEW OF • World Bank (2019) has suggested that in Serbia experts do comment on the law ISSUES IN – Serbian Basic Court RELATION TO – Ordered expert witness (construction engineer) to determine whether a EXPERT WITNESSES IN SERBIA • ‘…building slab was positioned adequately and in compliance with all relevant regulation and…whether the construction workers were required by law to adhere to the occupational safety rules. ’ • Not clear if the rule or exception to the rule but – Any instance where a legal opinion offered by expert witness – Not in the interests of a justice system that should appear objective • R. Sussex Justices [1924] – ‘Not only must justice be done, it must also be seen to be done’ USAID Government Accountability Initiative 10

• Expert evidence relied upon even when that evidence had not probative value in the instant case – World Bank OVERVIEW OF ISSUES IN RELATION TO EXPERT – Trial delays • No cap on number of expert witnesses who may be called by the court • If two expert witnesses have opposing or otherwise contradictory opinions WITNESSES IN SERBIA – Apprehension amongst lower court judges that Appellate Courts would not support their decisions if formed without expert witness testimony – Court can seek validation from commission of expert witnesses • Analyses findings of both experts – Court can call further experts to analyse issues at hand • CEPEJ – Multiple witnesses overburden trial and lead to inefficiencies USAID Government Accountability Initiative 11

• Skills shortage in Serbia – Process of appointing expert witnesses • Courts notify Ministry of Justice regarding fields of expertise needed • No requirement for the Ministry to issue a call for that identified need • Ministry acts at its own discretion OVERVIEW OF ISSUES IN RELATION TO EXPERT WITNESSES IN SERBIA – Disconnect between need for expertise expressed by the courts and call for expertise issued by the Ministry • Compounded by fact that no regular calls for appointment to the list • List not updated – Experts may not have updated skill set • Experts who equip themselves well in cases – More likely to be engaged in future cases – Experts drawn from a diminished pool – Newly qualified/less experienced experts under utilised » Delay and inefficiencies with case progression – No clear rules of engagement for selection of expert witnesses in criminal proceedings – No way to determine that process is transparent and fair and uses best qualified expert for each respective case USAID Government Accountability Initiative 12

• Expert witness opinions – Revisions following information court request for supplemental • Did judges issue unclear or incorrect instructions as to report content? • Did expert fail to convey original evidence well enough? OVERVIEW OF ISSUES IN RELATION TO EXPERT WITNESSES IN SERBIA – Expert witnesses do not necessarily adhere to the timetable laid down by the courts in terms of submission of opinions • Delay in proceedings – Fault can lay in part in poor trial management • Sanctions available for expert witnesses who fails in duty to court – Warnings and fines rarely issued/enforced – Experts who have been sanctioned may refuse to appear before the court/judge subsequently – Impact and effectiveness of expert witnesses affected negatively • Issuing of poor instructions because of lack of knowledge by judges and Public Prosecutors’ Offices needed to determine scope of required opinion • Exacerbated by lack of clarity in terms of content and structure of expert witness reports – Courts may accept expert opinion without critically examining content • CEPEJ – Judges required to verify and determine whether or not expert opinion objectively convincing USAID Government Accountability Initiative 13

• Clear disconnect between fairly rigorous legislative framework – Law on Expert Witnesses – Criminal Procedure Code • Undermining SUMMARY – Decision-making processes of officials involved in the process • • Licensing of experts Selection of experts Over-use of limited number of experts Lack of a requirement for ongoing professional development • Issues pertaining to trial and case management USAID Government Accountability Initiative 14

• Core issue that exacerbates other issues is – Lack of expert witnesses and/or – Lack of expert witnesses in particular fields SOLUTIONS FOR CONSIDERATION • Ministry of Justice to accede to requests of courts in relation to experts courts regard as being necessary • Ministry of Justice to issue scheduled and regular calls for experts – Creation of and requirement to pass a standard and recognised examination for entry onto the Register of Expert Witnesses USAID Government Accountability Initiative 15

Continued. . . • Core issue that exacerbates other issues is – UK-based Academy of Experts • Qualifications check; references from instructing lawyers; samples of previous expert reports; CPD; adherence to Code of Practice – Degree of consistency in terms of qualifications, level and range of experience SOLUTIONS FOR CONSIDERATION – Licence to be an expert with stipulated period • Licence renewed on basis of demonstrable level of continuous professional development – Increased complexity of organised crime and corruption makes this essential • Lead to a stronger cadre of available experts • Reduce over-reliance upon and over-use of limited number of experts – Need for training of experts in criminal procedure, trial processes and drafting of effective and consistent expert witness opinions USAID Government Accountability Initiative 16

• Punishment of experts for failing to appear or undertaking role as required – Counter-intuitive/counter-productive – Rather than fining – Experts should be suspended or prevented from appearing as witnesses SOLUTIONS FOR CONSIDERATION – More proactive approach to trial and management required – Liaising with experts over deadline for her/his report USAID Government Accountability Initiative 17

• CEPEJ – ‘…certain countries have found it useful to appoint judges who are specifically in charge of expertise-related matters, including matter relating to the selection of experts, the failure of experts to deliver an expert opinion meeting good quality standards etc. ’ • Informal mentoring of experts SOLUTIONS FOR CONSIDERATION – Common pitfalls in completing reports – Expression by experts of concerns regarding pressure of meeting deadlines • Judges better informed of and understand • Characteristic reasons for delay in and poor quality of expert reports • Creating deadlines which acknowledge complexity of each case USAID Government Accountability Initiative 18

• Judges’ reliance upon expert witnesses tempered by training of judiciary in the broad aspects of issues before them – Financial crime case concerning money laundering SOLUTIONS FOR CONSIDERATIO N – Training in generic money laundering process • Judicial Academy in Serbia – UK’s Judicial College • Judicial expert working groups; peer to peer dialogue ad ‘judgecraft’ – courses on ‘assessing evidence’ and ‘case management’ – European Judicial Training Network and International Organisation for Judicial Training USAID Government Accountability Initiative 19

• Criminal Procedure Code – Article 113 SOLUTIONS FOR CONSIDERATIO N • Determination of whether or not a case requires expert examination – Counter-intuitive re financial crime cases • Expert analysis will always be needed – Consideration needed of right to defence to call expert witnesses and not simply ability to request such witnesses USAID Government Accountability Initiative 20

• Article 114 – Augment definition of expert witness – ‘…a person who possesses the requisite professional knowledge for establishing or evaluating a fact in the proceedings’ • Vague • What does ‘professional knowledge’ mean? • How is it to be certified and tested? SOLUTIONS FOR CONSIDERATION – Professional accounting knowledge of forensic • Not necessarily knowledge of all aspects of the discipline – Augmentation • Requirement for additional qualifications, expertise or experience in specific issue of the case USAID Government Accountability Initiative 21

• Article 115 – Duties of an expert witness and sanctions for purported failures • Revisit SOLUTIONS FOR CONSIDERATIO N – Why do experts • Fail to respond to summon to appear? • Fail to provide findings and opinions? • Fail to do so in a timely fashion? – If issue is workload pressure not unprofessional behaviour • Counter-intuitive to sanction – If professionals, treat as professionals • Dispense with inefficient/unwilling experts not • Utilise but fine them – Examinations may be rushed – Reports submitted in incomplete state USAID Government Accountability Initiative 22

• Article 124 – Expert examination to be repeated if findings are • ‘…unclear, incomplete, erroneous, self -contradictory…if there is a doubt as to [the report’s] truthfulness…’ SOLUTIONS FOR CONSIDERATION – Revisit • Determine why such shortcomings might occur – If expert is qualified, issues should not ordinarily arise – Clarify how court could reasonably determine how evidence was, e. g. ‘erroneous’, ‘unclear’ or ‘contradictory’ USAID Government Accountability Initiative 23

• Law on Organisation and Jurisdiction of Government Authorities in Suppression of Organized Crime, Corruption and Other Severe Criminal Offences (LOSJA) • Use of Forensic Accountants – Investigations must • • SOLUTIONS FOR CONSIDERATION Be independent Have adequate investigative power Have access to adequate resources Be confidential • Utilise forensic accountants specialised in a particular field related to the case • Utilise support of certified financial investigators, asset tracing lawyers etc. to provide information to forensic accountant • Investigative strategy – Emphasise financial investigation as a core part of law enforcement efforts – Ensure support from high-level officials – Public promotion and adoption of national AML/CTF strategy USAID Government Accountability Initiative 24

Continued… • Multi-disciplinary Groups/Task Forces • Forensic accountants, specialised financial investigators, experts in financial analysis SOLUTIONS FOR CONSIDERATION • Creation of policies and procedures for promoting sharing of information/intelligence in intra-agency and inter-agency cooperative frameworks • Key strategic considerations for investigations • Effective management systems • All information, intelligence and evidence recorded analysed and stored • Make, focus and prioritise • Lines of enquiry • Identify gaps • Assist with development of interview schedules USAID Government Accountability Initiative 25

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