£4.5m fraud trial threatened by legal aid cuts

Topics: Criminal justice,Legal aid and access to justice,Money laundering and financial crime,The Bar

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  • Southwark Crown Court

The first prosecution to be brought by the Financial Conduct Authority could be threatened by the bar’s refusal to work for reduced pay rates.

An eight-handed £4.5m alleged boiler room fraud is the first very high cost case (VHCC) that could be affected by the government’s decision to cut the fee rates paid to barristers and solicitors by 30%.

The cuts are due to come into force for new cases from 2 December, but in a government concession last month, the measures will not be implemented for ongoing cases until March 2014.

The case, listed at Southwark Crown Court (pictured), is scheduled for trial in April, after the cuts have been implemented for all cases.

Lee Adams, partner at London firm Hughmans, made an application for the trial to be postponed because he cannot find sufficient counsel of appropriate skill willing to take represent his clients, despite contacting 17 sets of chambers.

Adams has been instructed in the case since it was at the police station two years ago. The defendants have yet to enter pleas.

The case is the first to be prosecuted by the newly created FCA. Counsel for the prosecuting authority opposed the application, suggesting the case is reviewed after 2 December when the cuts come into force.

The judge, Anthony Leonard QC, declined to postpone the trial, but listed the matter for a further hearing in December.

He warned the defendants that they may have to represent themselves, telling them they should be ready for trial however much it will cost the taxpayer.

Adams told the Gazette that if he cannot find counsel to represent his clients, his firm may also have to withdraw from the case.

Nick Brett, from Brett Wilson, who represents one of the other defendants, told the Gazette he had sympathy with Adams’ application, but felt it was ‘premature’ at this stage given ongoing talks between the Bar Council and the Ministry of Justice over the transitional arrangements.

Earlier this month a poll by the Criminal Bar Association revealed that 98% of barristers would decline to carry out the work for the reduced fees that form part of the ministry’s plans to cut £220m from the £1.9bn legal aid budget.

An MoJ spokesperson said: ‘At around £2bn a year we have one of the most expensive legal aid systems in the world. Just like many hard-pressed families and businesses - we have no choice but to make savings. QCs in very high cost cases are well-remunerated - around 2/3 of criminal barristers contracted to VHCCs receive fee incomes of over £100,000 – and even after our changes would continue to be paid generously.

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‘We have engaged constructively and consistently with lawyers - including revising some proposals in response to their comments - and continue to do so. Disruption to court schedules is unnecessary, and barristers choosing to try and do so inconvenience their clients and hard-working taxpayers.'

Desmond Hudson, Law Society chief executive said: ‘We recognise that cuts in fees are a challenge and clearly, it is for the barrister to decide if fees are sufficient to represent a defendant. In this time of continued austerity, many solicitors, who earn less than the small group of QCs involved in VHCC, are facing similar problems.

‘But in the interests of justice, the courts, government and professions have to work to ensure people who need representation will get it and is it disturbing to think that someone facing serious charges would be left without legal counsel.'

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