The Court has stayed a trial of a prosecution case, brought by the FCA in respect of a land banking scheme involving an alleged £5m fraud, on the basis that, as a result of legal aid cuts, there was no realistic prospect that the defendants could secure legal representation for the trial date which had been set.  The Court described the effort put in by the defence to find trial advocates as “very substantial indeed”.  It was common ground that the five defendants could not receive a fair trial unrepresented.  

Although the FCA accepted that involuntary lack of representation would be inconsistent with the European Convention on Human Rights and common law rights, and that a fair trial could not be held at this time, it considered that there was a reasonable prospect that advocates would be available to represent the defendants in the future.  The FCA argued that the Court should adjourn the trial to a future date rather than staying the indictment.

The Court held 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 would at this stage amount to a violation of the process of the Court, and further commented that the knock-on effect on other trials, the waste of court resources and the need to disregard Criminal Procedure Rules designed to protect the court system from abuse and to ensure that scarce resources are used to the best effect, all added to the reason why an adjournment should not be granted:

“the possibility that at some unknown date in the future an adequately funded advocate may become available is no basis on which to grant an adjournment”.

The FCA announced yesterday that it will be seeking leave to appeal.

In terms of the potential implications of this ruling, it is important to note that it only affects the 5 defendants who were listed for trial last week.  A second related trial involving 3 other defendants is fixed for 15 January 2015. 

This case had a primarily regulatory context in that it involved breach of the general prohibition under FSMA, and the offence of providing false or misleading information to the regulator, although there were also charges of conspiracy to defraud and of possessing criminal property.  In reaching his decision to grant the stay, the Judge had regard to the availability of other methods through which the victims would recover their losses civilly (for example, restitution proceedings brought by the regulator under ss.382 of FSMA), and other regulatory sanctions (presumably prohibition orders under 56 of FSMA, and/or directors disqualification proceedings) which, whilst not fully addressing the seriousness of the alleged misconduct, would both mark it out, and prevent the defendants from being able to take a role in corporate activity in the future. 

Staying a prosecution is a discretionary remedy, and each case will depend on its own facts.   If the FCA’s appeal proves unsuccessful, it remains to be seen whether the availability of other remedies/sanctions is taken into account in the exercise of the Court’s discretion to stay other FCA-led legally-aided VHCC prosecutions, and how this affects the FCA’s approach to criminal prosecution in complex cases going forward.