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17 Oct 2014

David Corker’s article re the first anniversary of the appointment of the Lord Chief Justice published in the New Law Journal

Battling retrenchment

This month marks the first anniversary of the appointment of Lord Thomas as the Lord Chief Justice. In this role, Lord Thomas is entitled to communicate to the Ministry of Justice his, and the judiciary’s, concerns and opinions about our criminal justice system. A year in, it has become evident that Lord Thomas is deeply troubled about the future of the system over which he presides. He perceives a fundamental change occurring which he has termed “the retrenchment of the state”.

In a speech to the legal think-tank Justice last March, he laid bare his view that the severity of cutbacks in government expenditure concerned with civil, family and criminal justice was a threat to their existence and thus to the rule of law. He contended that in the absence of a competent state, the rule of law would wither and be supplanted by the law of the jungle. While in his speeches Lord Thomas has sought to awaken the public to the danger to justice posed by the government’s austerity agenda he has also, as a judge sitting in actual cases, sought within the limits imposed upon him when acting in a judicial capacity, to oppose the view that in cases of alleged economic crime, the prosecution of them can properly be privatised.

Indispensable role

The first manifestation of his conviction that a public prosecutor plays an indispensable role in the prosecution of such cases was the judgment he delivered in the Innospec case in 2010. This did not involve a private prosecution but both the then Resident Judge of Southwark Crown Court which this case was before and Lord Thomas appear to have regarded as an attempt by the then Serious Fraud Office (SFO) director to recast the prosecutor’s role in order to facilitate the future treatment of economic crime as more akin to a tort.

Unprecedented move

In a judicial transfer unprecedented in modern times, Lord Thomas “came down” from the Court of Appeal where he sat, to the Crown Court in order to preside over this case. So appointed, he delivered a scathing judgment of the attempt to introduce US-style plea bargaining in fraud cases and so emasculate the role of the trial judge. He also deplored the SFO’s apparent desire to regard corporate criminality as something less pernicious than “ordinary” crime. The ripples of his judgment continue to spread; the present SFO director embodies the priorities set out by Lord Thomas and so has repudiated his predecessor’s vision. Second, last August’s sentencing of two company executives (Kerrison and Papachristos) for their complicity in overseas corruption was redolent with themes articulated in this judgment.

This year Lord Thomas appointed himself judge in two appeals which both concerned a private prosecution; one undertaken by Virgin Media Ltd of a Mr Zinga for conspiracy to defraud (R (Virgin Media Ltd) v Zinga). In the judgments he delivered in January ([2014] EWCA Crim 52), and September ([2014] EWCA Crim 1823) in each of these cases, Lord Thomas emphasised that while private prosecutions were permissible and in many cases, justified, it was a class of litigation highly dissimilar to its civil counterpart. For him it was anathema that potential civil claimants would come to regard prosecuting their commercial opponent as simply an alternative means to suing them in order resolve a dispute. Having diagnosed this danger he then referred to his retrenchment concept and it is clear that he regarded it as the underlying cause of the problem. Knowing that as a judge he is only able to address symptoms rather than causes, he could not for instance condemn this retrenchment and by implication, government policy, Lord Thomas set out a number of principles all of which he intended to act as discouragement of private prosecution for alleged economic crimes.

Stern warning

First, he indirectly addressed lawyers aspiring to grow a private prosecution practice. He issued a stern warning to them by stating that “There is no place in such a prosecution for what some have claimed as ‘end to end’ case management on behalf of the client who has initiated a private prosecution.”

Second, Lord Thomas sought to eliminate as far as possible any financial incentive attaching to any such prosecution. In the first judgment he held that while a private prosecutor could seek a confiscation order in order to strip the accused of any benefit they had obtained from their criminality, any resultant monies were payable only to the state. In relation to a claim for compensation which in contrast is to be paid to a victim, he held that when it and the prosecutor was the same the judge should be vigilant to ensure that there was no exploitation of the accused and to critically consider whether such an order really was a preferable remedy to confiscation. In other words, even if a prosecutor succeeds in convicting the accused and money can then be disgorged, the presumption is that it should all be paid to the state.

In his second judgment Lord Thomas returned to this theme. Presumably he had by then identified what he considered was a perverse incentive which could make it more attractive to prosecute as opposed to sue. He held that any future claim would have to be justified on the basis of value for money and that the tariff of lawyers’ fees agreed by the client prosecutor had been the subject of price-competitive tendering. The effect of this new regime is not just a test of reasonableness on hourly rates and the seniority of the lawyer used but also a need to demonstrate that the cheapest lawyer was the one who had been selected. Otherwise Lord Thomas held, no award should be made.

It would be a mistake to believe that Lord Thomas has a visceral dislike of private prosecutions. He does not. His issue is trying to prevent them being regarded by Whitehall as an acceptable replacement for a public prosecutor in cases of alleged crime against financial markets. It would seem that he is concerned that if a private prosecutions

“industry” were to be established then this would provide a justification for the retrenchment he fears. So through these cases he seeks to stymie it. Ultimately Lord Thomas sees private prosecutions as the terrain upon which to battle with government in a much wider struggle to preserve criminal justice which he is seemingly convinced faces, as a result of government cuts, mortal danger.

David Corker, Partner, Corker Binning

Read the full article here.