Major Fraud Trial Halted Over Legal Aid Cuts: A Fraudulent Government?

Last week a judge halted a major fraud trial before it even started after barristers refused to represent the defendants because of the cuts to legal aid.

R v Crawley

R v Crawley was a £4.5 million fraud prosecution brought by the Financial Conduct Authority as part of Operation Cotton. It concerned alleged land banking fraud, where land is divided into smaller plots and sold to investors on the basis that it can be developed and will soar in value; but the land is often protected with little chance of development being permitted, meaning it is worth a great deal less than the investors paid.

However, barristers could not be found to represent the five defendants because all barristers have refused to undertake the work at the new legal aid rates, which were slashed by 30% in December 2013 by the Government. The barristers that had initially undertaken to do the work returned their briefs when the fees were cut.

Alexander Cameron QC, the Prime Minister’s own brother, appeared pro bono (for free) on behalf of the defendants and argued that they could not receive a fair trial without being properly represented in this hugely complex matter. It is known formally as an abuse of process application.

Judge Anthony Leonard QC, sitting at Southwark Crown Court, agreed. He found that there was no realistic prospect of sufficient defence advocates being available before September 2015, including from the Government’s own Public Defender Service (a small group of defence lawyers employed directly by the Government). In those circumstances he held that the prosecution was an abuse of the court’s process and stayed (stopped) the proceedings indefinitely. The prosecution cannot now go ahead. Judge Leonard QC said that to allow the State an adjournment to ‘put right its failure to provide the necessary resources to permit a fair trial to take place now amounts to a violation of the process of this court’.

It is understood that the prosecution is now appealing the decision to stay the case.

Comment: A Government Fraud?

The case was classified for the purposes of legal aid as a very high costs case (VHCC). These are the most substantial, complex and difficult cases to be tried in the Crown Court. They are cases where the trial is expected to last at least 60 days. Legal aid fees for VHCCs were cut by 30% in December 2013 as part of the Government’s current round of sweeping cuts to legal aid.

Responding to the decision to stay the case, Nigel Lithman QC, chairman of the Criminal Bar Association (which represents the interests of barristers practising criminal law) said: ‘Skilled and experienced advocates are required to present [VHCCs]…In April 2013 the Government announced its intention to cut the fees paid to advocates conducting VHCCs by 30%. We opposed this proposal, as did many others. We understand that no barrister has signed a new contract to undertake a VHCC at the reduced rates’.

In response to Judge Leonard QC’s ruling, the Government attacked barristers for their decision to refuse the work. It claimed that on a case such as this one, a QC could expect to receive £100,000 and a junior barrister (any barrister that is not a QC, although they may still be very senior) could expect to receive £60,000. On the face of it, these are not small sums. Indeed, to the public at large they are great sums. However, they are not what the barristers would earn. Barristers would, firstly, have VAT deducted from that sum. They are then also required to pay a number of expenses, including chambers rent and clerking fees, and tax and national insurance contributions. By the time these deductions are made, the barrister could expect to actually earn about half of the sum stated by the Government for in the region of a year’s work. It should be remembered that in the Crawley case there were approximately 46,000 pages of evidence and nearly 1 million lines of numerical text. All of a sudden, those barristers are not earning a large sum at all, despite being among the very best in the country. How many top NHS consultants would work for £50,000 a year?

The Government has, I would suggest, presented these figures so that it appears in the minds of the public that barristers are refusing to work for very large sums of taxpayers’ money. But what it has actually done is presented the equivalent of a company’s overall annual turnover as its earnings, rather than its overall profit. It has wilfully presented misleading figures in order to make a gain in the public’s mind. In short, it has arguably behaved fraudulently itself. The Government’s own statistics watchdog, the Office for National Statistics, has criticised the Government for how it has presented barristers’ earnings.

It must be remembered that the Government sought to cut the fees of barristers by 30% once it had agreed a price with them to do the work.  Let us suppose for a moment that one of the Government’s roofs was leaking and it agreed a price with a builder for its repair. Let us then say that the Government tells the builder it will now be paying him 30% less than the agreed price. The builder refuses to do the work and says that no one else is likely to for that price either. This proves to be true and no one else agrees to do the work at that price.

I would suggest that no one would say the builder should be made to do the work at the new lower price. The same is true for barristers. The market determines a fair price. Instead of seeking to blame barristers, the Government should focus on its own failures in dismantling the justice system. To take our roof analogy once more, the Government should fix its leaking roof before it collapses. For once it collapses it is more costly and difficult to repair. Once the justice system is destroyed, it will be more costly and difficult to repair. Indeed it may be irreparable. The Government acts at its peril.

What are your thoughts?

Lord Hanningfield Unlawfully Arrested by Essex Police

Last Friday the High Court held that Essex Police unlawfully arrested and detained Lord Hanningfield. It also held that they unlawfully searched his home.

Lord Hanningfield, 72, was arrested as part of an investigation into whether he had fraudulently abused his position of trust in relation to the expenses he claimed while leader of Essex County Council.

On the 14 September 2011, at 6.45 a.m., five officers arrived in unmarked police vehicles, woke the peer, arrested him and searched his bungalow without ever having obtained a warrant. He was then detained at Braintree Police Station until later that morning. Lord Hanningfield had only been released from prison a few days before, on 9 September 2011, having been imprisoned on 1 July 2011 following his conviction for false accounting in relation to his House of Lords expenses.

Lord Hanningfield argued that the arrest, search and detention were unlawful. As he was arrested without a warrant the Police and Criminal Evidence Act 1984 (section 24) says that the question of whether the arrest was lawful or not turned on if it was ‘necessary’ to arrest him to ‘allow the prompt and effective investigation’ of an offence or his conduct. It was agreed that if the arrest was unlawful then the search and detention would be unlawful also.

So what exactly does ‘necessary’ mean? Mr Justice Eady, the judge, explained that previous cases tell us that ‘necessary’ in this context means that we consider two things:

(a) did the officer making the arrest believe himself it was necessary to make the arrest, based on what he knew (a subjective question); and

(b) would a reasonable person, who knew the same facts as the officer, also believe that it was necessary to make the arrest? (an objective question)

Having defined ‘necessary’ the judge went on to consider the arguments on both sides. The police argued that it was necessary to make the arrest because Lord Hanningfield might have tried to conceal or destroy evidence relating to his expenses now that he had been released from prison. They also argued that he might seek to collude with other individuals who were suspects (none of whom were ever arrested). Finally they suggested he might fly into a temper when challenged on his council expenses. On the other hand, Lord Hanningfield argued that he had always been cooperative and would have been more than happy to attend a voluntary interview or could have been interviewed in prison. He further argued that he had known about the police investigation back in May 2011 and could therefore have destroyed or concealed evidence or colluded long before his imprisonment.

The judge agreed with Lord Hanningfield. He held that although the arresting officer believed it was necessary to make the arrest no reasonable person would conclude it was necessary to make the arrest at that time. The arrest at that time would not have had any impact on a prompt and effective investigation. ‘There were simply no solid grounds to suppose that [Lord Hanningfield] would suddenly start to hide or destroy evidence, or that he would make inappropriate contacts’. There was no reason not to follow the process to obtain a warrant. As the arrest was not necessary it was therefore unlawful. Since the arrest was unlawful it was held that the search and detention were also unlawful.

The sum of £3,500 was awarded to Lord Hanningfield, who has promised to donate the money to charity. Essex Police have said they are considering whether to appeal.

The judgment can be read here: http://www.bailii.org/ew/cases/EWHC/QB/2013/243.html

Discussion

I certainly hope that Essex Police do not waste any further taxpayer’s money appealing this decision. It is clear to me that it was not necessary to arrest Lord Hanningfield at the moment he was. There was ample opportunity to interview him in prison. Alternatively, a voluntary interview could have been requested. What are your thoughts? Was an arrest necessary at that time?