Regulation  

FCA to attempt appeal of decision to stay legal action

The Financial Conduct Authority has said it is seeking to appeal a stay of proceedings for five defendants allegedly involved in a land banking fraud, as it attempts to pursue alleged fraudsters involved in complex cases through the courts.

On Thursday (1 May) a judge ruled a stay of proceedings for five defendants allegedly involved in a land banking fraud, as they could not afford proper representation due to cuts enforced in December designed to save £220m from the legal aid budget.

Under the new rules, the fees payable to lawyers have been cut by 30 per cent and the maximum household income to qualify for legal aid has been lowered to £37,500 a year.

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Lawyers and legal experts have said the case will have wider implications for other legal action being pursued by the FCA. Another case brought by the Serious Fraud Office against alleged Libor-fixing traders was stayed last week for similar reasons, and a second major FCA trial was thought to be likely to follow the same fate.

The FCA has now announced it “will be seeking leave to appeal in this matter”. However, a person close to the situation told FTAdviser they were unsure on the legal precedent for whether or not it was possible to appeal a decision reached on the grounds of likely ‘unsafe’ conviction.

The five defendants handed a reprieve are accused of operating a land banking scheme between 2008 and 2011 that used three limited companies and in which sub-plots of land were “aggressively marketed” to members of the public.

Judge Leonard ruled Scott Crawley, Dale Walker, Daniel Forsyth, Brendan Daley and Aaron Petrou would not be able to get a fair trial as there are insufficient resources to try the five together as a result of a 30 per cent cut to legal aid fees for lawyers.

The case was originally scheduled to be heard in April 2014, but the defence could not find representation despite contacting 70 sets of chambers as barristers refuse to undertake large and complex cases following the rule changes.

Richard Peat, a barrister for law firm Thirteen Old Square Chambers, previously told FTAdviser that the decision was likely to affect other criminal prosecutions but would not prevent it pursuing other forms of disciplinary action.