PDS, PDQ! Operation Cotton and Operation (saving the MOJ’s) Bacon

Posted on 22nd May 2014 in Legal Profession

Yesterday the Court of Appeal  roundly allowed an appeal by the prosecuting authority and the Secretary of State for Justice (intervening, or as some might suggest, interfering) against the trial judge’s decision to stay a major fraud case by reason of the unavailability of counsel for five legally aided defendants.

The case has aroused a good deal of controversy. For earlier coverage on this site, see our Weekly Notes for 9 May with an update in the last Weekly Notes (16 May).

The story so far…

The case of R v Crawley and others is a major fraud prosecution brought by the Financial Conduct Authority (FCA) against a number of defendants allegedly engaged in a land banking scam (the investigation into which was known as Operation Cotton) . The victims lost a lot of money and the five defendants were all legally aided.

By reasons of the sums involved, the volume of the evidence and the complexity of the case, it was categorised as a Very High Cost Case (VHCC) which required, for the defence, the services of barristers signed up to the VHCC scheme. However, the rates payable to such barristers were slashed by 30% last autumn, as part of the MOJ’s bid to reduce expenditure on legal aid by £220m (out of a total budget of £2bn). Following that unprecedented decision (which other public service employees have or could have had their pay cut by such a draconian factor?),  the Bar Standards Board declared that the remuneration was no longer “deemed” sufficiently reasonable to require barristers to take such cases under the Cab Rank Rule, and all the barristers then assigned to the scheme withdrew. One of them, Tim Thomas, who had been instructed in the Crawley Case, explained his POV in a recent guest post on this blog.

The defence solicitors made determined efforts to find alternative representation, to no avail. Accordingly, an application was made to the trial judge, by a barrister acting pro bono (ie for 100% of nothing at all) who happened, by ironic chance, to be the brother of the Prime Minister. (In the circumstances, some questioned how accidental was the slip by which the judgment referred to Alexander Cameron QC as acting “bro bono”.) The application was for the case to be stayed (ie abandoned) on the grounds that no fair trial would be possible in the absence of suitable representation for the defendants and that to proceed would be an abuse of process.

In a carefully considered ruling given on 1 May, His Honour Judge Leonard granted the stay. The decision sparked a good deal of comment and, not surprisingly, an appeal. The appeal was heard last week and the judgment [2014] EWCA Crim 1028 given yesterday. Had the appeal not been allowed, the defendants would have had to be acquitted. But the appeal was allowed.

The Court of Appeal decision

The appeal judges, Sir Brian Leveson, President of the Queen’s Bench Division, Lord Justice Davis and Lord Justice Treacy, said (at paras 17, 18) it was clear from the authorities and beyond argument that there was a strong public interest in the prosecution of crime and in ensuring those charged with serious criminal offences were tried. Ordering a stay of proceedings, which in criminal law is effectively a permanent remedy, is thus a remedy of last resort: see  Attorney General’s Reference (No 2 of 2001) [2003] UKHL 68;  [2004] 2 AC 72, para 24.

It should only be applied in two types of case: first, where the accused could no longer receive a fair hearing; and second, because of the risk of unfairness, to protect the integrity of the criminal justice system.

The judge’s primary conclusion engaged the second of these: violation of the process of the court. This was not a ground on which the application had been made, but Mr Cameron supported it on appeal. The judge appeared to have aligned the FCA as prosecuting authority with the Secretary of State for Justice when attributing blame to “the state” for the failure to provide adequate representation at public expense, and to suggest that to grant an adjournment would enable the state to benefit from that failure. (CA at para 25, citing judge at para 79(b).)

On this issue the Court of Appeal gave leave to the Secretary of State to intervene, and ruled (para 29) that it was “quite wrong, for present purposes, to seek to link, effectively as one, the FCA as prosecuting authority and those responsible for the provision of legal aid” or to speak as though they were involved in some “joint enterprise”.

That said, it was “undeniably the responsibility of the Lord Chancellor to provide legal representation for those involved in the most complex of cases and the present difficulties clearly flow from his decision to reduce the funding” (para 30). Nevertheless, to describe what had happened as jeopardising the integrity of the criminal justice system was wrong as a matter of principle.

On the judge’s secondary conclusion, based on the inability of the accused now to have a fair trial, the appeal court was equally scathing. The test was whether it was now impossible to have a fair trial. Delay was insufficient, unless there was prejudice that could not be cured, eg by a reduction in any sentence imposed.

The court accepted the judge’s finding that the pool of advocates available from the Public Defender Service (relied on as a solution by the Secretary of State) was insufficient to cover all the VHCC cases due to be tried. But he was not concerned with all the VHCC cases, only this one. On that basis, there was a potential pool of defence advocates if the trial were to be adjourned, as proposed, to January 2015. At the date of the hearing before the judge there was, in the appeal court’s view, a realistic prospect of competent advocates with sufficient time to prepare (paras 45, 47) and the judge’s conclusion to the contrary “cannot be sustained”.

A number of other observations and findings by the judge were criticised, including the suggestion, at para 79(a) of his judgment, that the victims might obtain redress by suing them in the civil courts and by other regulatory action being taken against the accused. That approach was, in the appeal court’s view, “entirely misconceived” and should not be taken into account (para 52).

Lest the Secretary of State rub his hands with too much glee at this result, their Lordships rounded off their judgment by rounding on the failure (for which he is in part responsible, though they don’t say as much) to resolve “the impasse that presently stands in the way of the delivery of justice in the most complex of cases”. The fact is, but for his fee-slashing “interference” in the VHCC scheme, it would have provided adequate representation, and the lack of it is a simple matter of cause and effect. (That was perhaps too obvious to need to state.)

The Public Defender Service

The PDS on which, like a rabbit out of a hat, the state has now had to rely to paper over the cracks in the criminal justice system, has a longer history than some suppose.

It was actually set up under the last government, back in 2001, following a policy annoucement in 1998 in a white paper, Modernising Justice, which led to the Access to Justice Act 1999. The plan was to be “more cost-effective and provide a better service than lawyers in private practice”. But it was later hoped that it would boost the provision of top quality defence lawyers “where the existing provision is low or of a poor standard”.

So what began as a backup service morphed into a benchmark. Managed by the Legal Services Commission, pilot schemes were set up in various provincial centres and their performance later analysed in a report, Evaluation of the Public Defender Service in England and Wales (2007) On the whole, they were found to have worked well, bearing in mind they were starting from scratch.

All this preceded the review by Lord Carter of Coles of Criminal Legal Aid Procurement established in 2005 (Carter review) and the subsequent rounds of cost cutting and regulatory enhancement. Nevertheless, over the next few years the PDS or PDO (offices) chugged along with relatively low profile, at an annual cost of £4m or so (see report to Legal Services Commission in 2005: Demand Induced Supply: Identifying Cost Drivers in Criminal Defence Work). They are barely mentioned (and then only in passing) in subsequent annual Legal Services Commission reports and in the Transforming Legal Aid: Access to Criminal Defence Services report by Dr Vicky Kemp in 2010.

So it seems to have been only in response to the unprecedented measures taken by the Criminal Bar in the last few months to resist wholesale reductions in legal aid fees, both in relation to the Graduated Fee Scheme and the VHCC system, that the MOJ looked to the PDS as a way not just to supplement the availability of suitable criminal representation, but to substitute for its withdrawal.

It began actively recruiting top quality QCs as well as boosting the ranks of junior advocates in the service at the beginning of this year, with advertisements offering salaries of £46,000 to £125,000, plus “generous allowances” for annual leave, pensions, family-friendly work etc (all of which the freelance Bar can only dream of) and without any of the burden of chambers expenses, clerks fees, subscriptions and other expenses.

Indeed, a comparison of the costs and benefits circulated on Twitter appeared to demonstrate how much more the PDS would actually cost per lawyer-hour than employing independent barristers. That raised a question about whether the PDS was really intended either to boost standards or plug a gap, or simply as a seige engine to break the resistance of the independent Bar to having its fees cut.

Would multiple defendants, possibly with cut-throat defences, all served by employees of the PDS raise issues of conflict of interest? Richard Moorhead, in his blog piece We set up a Public Defender by mistake, seems to think this is a reasonable question to ask, even if the Court of Appeal in the Crawley case (at para 7) appeared to brush it aside and the point was evidently not pressed by Cameron QC.

It’s interesting that Prof Moorhead, now based at UCL, was involved in the earlier research into the pilot PDS/PDO scheme and reported in 2005. His blog is called Lawyer Watch. He is certainly very much alive to matters of professional ethics. But his main point in this blog is that the PDS was really never intended to supplant the VHCC scheme, and yet, by fault or default, that is what seems to be happening. As another commentator suggested, it is a form of nationalisation by stealth – and all the more surprising given that it comes from a Tory-led government.

As a fix, it seems to have worked – sufficient to secure a temporary relief from sanctions. Whether it will continue to be effective as future complex fraud trials come to court and apply to be stayed, on grounds of the unavailability of defenders, remains to be seen. If it is to become a credible alternative, or substitute, for the VHCC scheme, then recruitment will have to continue apace, at a cost that may well prove pyrrhic.

 

Update

For more on this: Obiter J’s blog post, Some reflections on the Op Cotton appeal, considers whether the Secretary of State, having been allowed to intervene on the basis that he did not introduce new evidence, was nevertheless allowed to do so, in relation to the emergency boosting of the PDS which was proposed as a solution, and influenced the decision.

In a new piece for Huffington Post, entitled Justice Armageddon, criminal solicitor Philip S Smith explains why the defendants, alleged with massive fraud, were on legal aid:

It is worth reminding observers that the defendants in these cases are not without means. It is not through their choice that they rely on the State to fund their defence. However, as a result of the allegations which they face, their assets have been frozen under the Proceeds of Crime Act 2002 so they are forced to take Legal Aid. The effects of this Judgment will be to force them to accept representation by a PDS Advocate regardless of their wishes.”

Other comments are helpfully listed by David Allen Green on his Jack of Kent blog, Useful links on the Operation Cotton judgment. A detailed post for the FT about the PDS is promised soon and will no doubt be linked from there.

 

Finally, lest there be any confusion, this blog post has been written by me, Paul Magrath, and is not intended to represent the views of ICLR. Although it comments on a case, it is not a law report.

Updated 23 May 2014.

 

PMM