The Operation Cotton Appeal – a handy guide

 

Today the Court of Appeal in London will hear the appeal in the “Operation Cotton” case.

The case’s proper name is R v Crawley and others, but is known as “Operation Cotton” (or #OpCotton on Twitter) after the Financial  Conduct Authority (FCA) exercise which led to the original prosecutions being brought.

The appeal is by the prosecutors (the FCA) of the order for a stay (that is, termination) of the case by HHJ Leonard QC made at Southwark Crown Court on 1 May 2014 after a hearing on 28 April 2014.  (The ruling of the judge is short and readable and should be read by anyone following the case.)

Strictly speaking, the Court of Appeal also has to give permission for the prosecution to appeal before the appeal can be heard; but it is likely that there will be a “rolled up” hearing on both the permission and substantive points.

 

The Court of Appeal

The bench hearing the appeal will consist of Sir Brian Leveson (the president of the Queen’s Bench Division) with Lords Justices Treacy and Davis.   This is quite a high-powered bench for hearing such an appeal.

(As permission has been given for the appeal to be televised, this may mean the (welcome) return of Sir Brian to our screens a couple of years after his inquiry into the practices of the media.)

 

The main issues

The central question before the Court of Appeal is whether the court below should have granted an adjournment rather than stayed the case altogether.

The reason for there  being either an adjournment or a stay is that it has so far proved impossible with current Ministry of Justice legal aid policy to find defence barristers for the eventual trial.  As it is a complex fraud case, specialist counsel is required; and if there is no defence counsel, there can be no trial.

In turn, the reason for there being no defence counsel available is that no qualified and competent barristers are available at the new rates imposed for such work by the Ministry of Justice (MoJ).

So in essence: does current government legal aid policy mean that many prosecutions for complex fraud cannot now go ahead?

 

The parties

The FCA (the “appellants”) will contend that an adjournment was a more appropriate and proportionate course of action.   This will allow more time for defence counsel to be found. The prosecutions can then proceed.

The defendants (or “respondents” for the sake of this appeal) will submit that the judge was correct in ordering a stay.  This is because there was (and is) no realistic prospect of counsel being found and that adjournments should not be granted on a speculative basis.  Leading for the defendants happens to be Alex Cameron QC (the Prime Minister’s brother) acting on a pro bono basis.

The MoJ is also seeking to make “representations”.  The MoJ has not said what these representations will be.  The MoJ has somehow found public money to instruct a top commercial fraud QC (presumably to make submissions that top commercial fraud QCs are not required in these cases).

(Curiously, the MoJ has also instructed a junior barrister from the fledgling and under-resourced “Public Defender Service” (PDS): this seems to raise, in principle, an issue of conflict – as the interests of the defendants in this appeal is in the stay being upheld, which is surely not in the interest of the MoJ.)

 

The implications

Whilst a stay in this case will be a disaster for the FCA (and the MoJ) – as alleged fraudsters will walk free without trial because of government policy – it is the possible knock-on effect for several other upcoming fraud cases which concerns the FCA and MoJ most.

The appeal in this case will (technically) only bind the parties concerned.  But the relevant facts will be similar with other legally-aided defendants in the complex fraud cases to come.

In essence: if the MoJ funding policy for legal aid in complex fraud cases leads to a stay in this case, then it is likely there will be stays in the future cases as well.

And, if so, much of the prosecution work of the FCA (established to deal with fraud in the City after the crash) could effectively grind to a halt.  This may include the huge “Operation Tabernula” case.

So there is a lot is at stake.

The FCA want these prosecutions to proceed (so that it can do its job); and the MoJ wants these prosecutions to proceed (so that it will not be blamed for undermining City regulation).

 

Background reading

The ruling in Operation Cotton (1 May 2014)

The documents setting out the MoJ’s current legal aid policy: the April 2013 MoJ consultation (a botched document), the September 2013 MoJ consultation (an attempt to deal with the original botched document) and the MoJ “risk assessment” (a breathtaking complacent document).

The warnings in consultation responses from the experts – Criminal Bar Association, the Fraud Lawyers Association, and the government’s own Old Bailey prosecutors, the Treasury Counsel to the Crown at the Central Criminal Court (the latter is particularly elegant and scathing).

Two reports from Catherine Baksi at the Law Society Gazette warning of the impact of the MoJ policy on the Operation Cotton prosecution – November 2013 and January 2014. (Though all her stuff on this is excellent.)

Commentaries on the first hearing: Adam Wagner at New Statesman, Dan Bunting, Richard Moorhead, Catherine Baksi, and by me last week at FT.com

The implications of the case in terms of other complex fraud trials: Nick Cohen at Observer (excellent) and by me yesterday at FT.com .

(My pieces at FT.com are free to access but registration required.)

 

 

 

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