FCA succeeds in reversing stay in Operation Cotton trial

The Financial Conduct Authority (FCA) has won its appeal against the stay in the high-cost fraud trial known as Operation Cotton, with the Court of Appeal (CoA) ruling that proceedings should resume.

In a judgment handed down this morning (21 May) Sir Brian Leveson, the president of the Queen’s Bench Division, sitting with Lord Justices Davis and Treacy, gave the FCA leave to appeal and reversed the stay in proceedings ordered by His Honour Judge Leonard QC in Southwark Crown Court on 1 May.

However the CoA said that the feud between the Government and the bar over the reduction in fees in publicly-funded cases should be resolved in order to maintain the UK’s criminal justice system.

Leveson P said the court it was “of fundamental importance that the Ministry of Justice led by the Lord Chancellor and the professions continue to try to resolve the impasse that presently stands in the way of the delivery of justice in the most complex of cases”.

The decision was a victory for QEB’s Sean Larkin QC and Blackstone Chambers’ Anthony Peto QC, representing the FCA and the Lord Chancellor, Justice Secretary Chris Grayling MP, respectively.

Leonard had ordered a stay in proceedings due to the fact that the defendants, who are accused of fraud and other criminal offences connected to a land banking scheme, could not find barristers to represent them. The judge said there was no realistic prospect that the defendants could find “competent advocates” prepared to take the case on under the new fee regime imposed by the Ministry of Justice (MoJ) for Very High Cost Cases (VHCCs).

The five defendants were represented at the Crown Court and in the CoA by Three Raymond Buildings’ Alexander Cameron QC, acting pro bono, alongside Hughmans solicitor-advocate Lee Adams.

In a statement accompanying today’s judgment, Leveson P said: “We conclude that these findings cannot be sustained and that it was not reasonable for [the judge] to reach them. In those circumstances, we order that the proceedings on this indictment be resumed in the Crown Court.”

The CoA said that Leonard’s ruling did “involve errors of law or principle and, in any event, was not reasonable in the sense that a number of the conclusions reached were not reasonably open to him based on the evidence and, in any event, his ultimate finding did not constitute a reasonable exercise of the discretion open to him.”

In his leading judgment Leveson P found that there would have been a sufficient number of advocates available within the Public Defender Service (PDS) – which has been recruiting for suitable barristers to take on work which would previously have been done by self-employed barristers – to defend the five accused men. While the CoA found that the PDS counsel would have been the only advocates prepared to take on the case, it said there would have been a sufficient number to enable a trial to take place in January 2015.

The CoA also found that while some delays had been incurred by the stay in proceedings and subsequent appeal, the “resulting shortfall should be comparatively modest”.

In its conclusion, the CoA panel said that the dispute between the bar and the Lord Chancellor  was a “commercial negotiation in which (short of legal challenge) the judiciary can play no part”.

But the judges added that the criminal justice system required high-quality advocates to prosecute and defend cases.

“We have no doubt that it is critical that there remains a thriving cadre of advocates capable of undertaking all types of publicly funded work, developing their skills from the straightforward work until they are able to undertake the most complex,” Leveson P said in the judgment.

In a statement the FCA said: “The Financial Conduct Authority (FCA) welcomes the Court of Appeal’s decision in the case of Crawley and others. The FCA is committed to pursuing criminal action in appropriate cases and is pleased that this case can now proceed towards trial.”

The legal line-up:

For the applicant, the Financial Conduct Authority

QEB’s Sean Larkin QC and Blackstone Chambers’ Ben Jaffey, instructed by the Financial Conduct Authority

For the respondents, Crawley and others

Three Raymond Buildings’ Alexander Cameron QC and Hughmans’ partner Lee Adams

For the intervenor, the Lord Chancellor

Blackstone Chambers’ Anthony Peto QC and Carmelite Chambers’ Peter Woodall