Regulation  

Court ruling lifts cuts threat to FCA legal actions

A judge has given the green light for acriminal action against alleged land banking fraudsters to go ahead, lifting fears that the Financial Conduct Authority will be unable to pursue alleged fraudsters through the courts in complex cases due to legal aid cuts.

At the beginning of 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.

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.

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The Court of Appeal has overturned the ruling, with Judge Treacy and Judge Davis stating the ruling involved “errors of law or principle”.

The main reason why it has been overturned is that while there were no suitable barristers available to try the case in the independent bar, there are barristers available in the Public Defender Service.

The PDS is a department of the Legal Aid Authority, which provide criminal defence services.

The judgement said the PDS has began “actively to recruit a pool of employed advocates to take on work that might otherwise have been done by independent advocates”.

The PDS confirmed that while no barristers are currently available, there is currently a list of at least twelve advocates who will “become available”.

The judgement said: “We have reached the clear conclusion that this ruling does 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... [and] did not constitute a reasonable exercise of the discretion open.”

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.

Lawyers have warned that other similar cases to the land banking action, which are classified as ‘very high cost cases’ as they are likely to take more than 60 days, would probably suffer a similar fate and be stayed due to the potential for ‘unsafe’ conviction.

According to the judgement in the land banking case, the evidence is “complex and substantial” with the volume of paper amounting to over 46,000 pages. The defence said it could not find representation despite contacting 70 sets of chambers.

A FCA spokesperson said: “The Financial Conduct Authority 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 trial is expected to go ahead in January 2015.