Barristers' legal aid rebellion 'risks collapse' of top fraud cases

Lawyers in March 2014 protesting at cuts to the legal aid budget. Thousands staged a walkout from courts in England and Wales. Photograph: Andrew Cowie/AFP/Getty

A series of high-profile fraud prosecutions are at risk of collapse after a crown court judge halted a trial because specialist barristers are refusing to represent defendants in protest at 30% cuts in legal aid fees.

Accepting key arguments made by Alexander Cameron QC, the prime minister's brother, an unprecedented ruling by Judge Anthony Leonard at Southwark crown court warned that the system of fair trials was in jeopardy.

Formally closing the case against five men accused of a £4.5m land bank fraud, Leonard said the state could not be allowed extra time "to provide the necessary resources to permit a fair trial". Additional delay would amount to "a violation of the process of this court".

Lee Adams, a solicitor advocate with the legal firm Hughmans who represented four of the defendants, said: "This decision is entirely unprecedented. It's extraordinary that the government has not got a grip of this case at all."

The ruling will also affect more than a dozen VHCC (very high cost) cases scheduled to be heard at crown courts in Southhwark, Birmingham and Nottingham in the coming year, involving at least one defendant who has no legal representation because of legal aid difficulties.

Other cases that may be affected include the Serious Fraud Office'sLibor rate-fixing cases, involving defendants who used to work at Barclays, and Financial Conduct Authority (FCA) cases arising from Operation Tabernula, one of the largest investigations into insider dealing in the City.

Trials relating to an alleged £35m fraud involving business loans made by HBOS bank have also been put in jeopardy.

Asked if he was embarrassed about the case, the prime minister said: "We have an independent judicial system in this country. My brother has made arguments on behalf of his clients and the judge has made a decision."

Commenting on the collapsed fraud trial, Sadiq Khan, the shadow justice secretary, said: "Because of [justice secretary's] Chris Grayling's legal aid changes, a judge has been forced to abandon a serious fraud trial because he couldn't guarantee the defendants a fair trial.

"Thousands of pounds of taxpayers' money has been wasted on this aborted trial, and this decision shows judges also have lost confidence in the justice secretary."

The Ministry of Justice said: "Even after the savings, if a QC picked up a case like this one, they could expect to receive around £100,000 for working on it, with a junior barrister receiving around £60,000. The government has made sure that the Public Defender Service has a number of suitably qualified advocates who could act in this case."

Lawyers say those fees are halved, however, when VAT, chambers' costs and other expenses are included.

In the case stayed at Southwark, known as R vs Crawley and Others, Alexander Cameron QC represented the defendants on a pro bonobasis, arguing that they could not receive a fair trial and that the case should be stopped for good rather than merely adjourned.

Leonard, who has just finished hearing the Max Clifford case at Southwark crown court, ruled that there was no realistic prospect of sufficiently highly qualified lawyers being available even if the case were delayed until early next year.

Although barristers have abandoned their courtroom walkouts in protest against more widespread cuts in criminal legal aid following a deal with the Ministry of Justice, they have continued boycotting VHCCs – usually complex frauds involving thousands of pages of evidence.

Leonard's ruling will put pressure on Grayling, who has pushed through deep legal aid cuts in the face of fierce opposition from the legal profession. The FCA, which brought the prosecution, is considering appealing against the decision.

VHCCs represent less than 1% of all crown court cases. Proportionately they impose a huge cost on the legal aid budget. One recent trial cost £8.5m; the bill from the three most expensive VHCC cases in 2011-12 was £21m.

The judge said: "The knock-on effect on other trials, the waste of court resources and the need to disregard the criminal procedure rules designed to protect the court system from abuse, and to ensure scarce resources are used to best effect for all, in my judgment, add to the reasons why an adjournment should not be granted.

"There is no realistic prospect that sufficient advocates would be available for this case to be tried in January 2015 from any of the sources available to the defence. It would be unconscionable to put this trial off to September 2015 with the second trial being heard in 2016.

"There is no basis on which I could find that the availability of advocates would be any different then than it will be in January 2015."

That delay in bringing the defendants to justice was also likely to breach their right to a fair trial under the European convention on human rights, he added.

Philip Smith, a solicitor with the law firm Tuckers who represented the fifth defendant, had contacted Alexander Cameron and asked if he would take on the case arguing for the trial to be stayed. Cameron lent his services free of charge.

"It's a staggering decision," Smith said. "It's a very brave decision but a just one. It has a knock-on effect for all the other VHCC cases. There are eight stacked up at the moment [awaiting trial].

"The involvement of a silk [QC] of as high a reputation as Alexander Cameron and his willingness to accept the case on a pro-bono basis was absolutely pivotal in persuading the judge that he could make this decision."

Solicitors acting for the five defendants in the case were said to have eventually approached more than 100 sets of chambers in an attempt to find barristers with relevant experience to defend their clients.

They failed to find counsel willing to take on VHCCs even after approaching the bar in Northern Ireland and Scotland.

Khan said: "Chris Grayling needs to urgently provide answers on how they plan to prevent a meltdown in the justice system caused by their policies."

Sarah Forshaw QC, leader of the south-eastern circuit, said: "It is the responsibility of the Ministry of Justice as monopoly funders of legally aided work to ensure that they don't cut rates to the point where the criminal justice system unravels – which is clearly now becoming the case."

Bill Waddington, chair of the Criminal Law Solicitors' Association, said: "The collapse of today's case shows that very high-cost cases are like the canary in the mineshaft: the first to keel over but symptomatic of the overall collapse of access to justice and a legal aid system close to meltdown."