Nicola Finnerty quoted in The Washington Post – “Insider Trading Suspects Stymied by U.K. Legal Aid Cuts”

Dec. 6 (Bloomberg) — Four men charged in the U.K.’s biggest insider-trading investigation have lost their trial lawyers because of cuts to legal aid, days before they were scheduled to enter pleas at a hearing today.

The men, who include former Deutsche Bank AG managing director Martyn Dodgson, are among six defendants charged in the investigation, known as Operation Tabernula, who appeared in court. The trial lawyers, known as barristers, withdrew because of cuts to government funding of legal cases that came into effect earlier this week, attorneys for the men said.

The U.K. government overhauled legal aid as part of austerity measures to trim the deficit. They’re trying to cut 350 million pounds ($572 million) from the annual budget for legal aid of about 2 billion pounds, according to the U.K. Ministry of Justice.

“The cuts to fees will lead to the destruction of the criminal justice system,” said Nigel Lithman, chairman of the Criminal Bar Association. “There will be no barristers either coming into the profession or prepared to continue doing criminal legal aid work. There will be no quality people representing the everyday person.”

The cuts to legal aid include a 30 percent reduction in fees for lawyers in high-cost cases, such as Tabernula, that are expected to run for a long period of time and require a large number of lawyers. The issue in the Tabernula case highlights the difficulties defendants with even less resources may face.

One Plea

Iraj Parvizi, a former director at Aria Capital Ltd. who doesn’t live in the U.K., pleaded not guilty to one count of conspiracy to insider deal today, while the other five defendants’ pleas were delayed.

Grant Harrison, a former managing director at Altium Capital Ltd., Parvizi, Dodgson, Andrew Hind and two other men were all scheduled to enter pleas today. Parvizi and one of the other men, Benjamin Anderson, are able to retain trial lawyers without public funding. All six still have solicitors, lawyers who don’t usually argue before courts in the U.K.

330 Barristers

Nicola Finnerty, Hind’s solicitor, told the court they’ve asked 74 barristers firms, known as chambers, to take the case on the reduced legal-aid budget, without success. Maria Stalbow, Dodgson’s lawyer, said 330 barristers were unwilling to take on the case under the new compensation guidelines.

Judge Jeffrey Pegden told the lawyers to try and have the proceedings reclassified as a standard legal-aid case where the fee cuts haven’t been as large. He praised efforts to proceed with the case “in the face of very real adversity.”

The Financial Conduct Authority has arrested about 10 men in its crack down on insider trading, starting in March 2010. Dodgson, Parvizi and two of the other men were charged in October 2012 with conspiracy to insider trade across a four-year period. The agency said at the time that the men made more than 3 million pounds on improper trades. Julian Rifat, who worked for Moore Capital Management LLC, and Clive Roberts, who was the head of European sales trading at Exane BNP Paribas, were also arrested in 2010 and are still under investigation.

‘Well-Rewarded’

Lithman is calling on barristers to protest the aid cuts by not attending court on the morning of Jan. 6, 2014, the first day the criminal courts are in session after the holiday break. The majority of the Criminal Bar Association’s 5,000 members plan to demonstrate, he said.

Tooks Chambers, a London-based set of trial lawyers with 90 percent of its work publicly-funded, is closing later this month as a “direct result of government policies on legal aid,” the firm said in a statement on its website.

Barristers in high-cost cases are “well-rewarded,” the Ministry of Justice said in an e-mailed statement.

“Around two-thirds receive fee incomes of more than 100,000 pounds, and often well over that,” the government said. “Even after our changes they would continue to be generously paid — for both this work and for more general advocacy work in criminal courts.”

–Editors: Lindsay Fortado, Anthony Aarons