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Court throws out FCA land banking fraud case after legal aid cuts

Southwark Crown Court has thrown out a land banking fraud case brought by the FCA after the five defendants failed to get legal representation in a test case of the impact of cuts to legal aid. 

In April 2013 the FCA charged eight men with land banking fraud and carrying out a regulated activity without authorisation.

A judge has now thrown out the case against five of the individuals on the basis that they would not be given a fair trial as they could not get proper legal representation. It is the first time a case has been thrown out as a result of the cuts to legal aid. 

The case was due to be heard against Scott Crawley, Dale Walker, Daniel Forsyth, Aaron Petrou and Brendon Daley.

It is classified as a ‘very high cost case’, meaning the trial is expected to last over 60 days.

The Government has introduced a 30 per cent cut to fees paid to solicitors and barristers for VHCCs as part of plans to cut £220m from the £2bn annual legal aid budget. The changes affect any case heard from the end of April.

In January, Money Marketing revealed lawyers had raised concerns the cuts would cause delays and miscarriages of justice in FCA court cases.

The FCA has until tomorrow to appeal the ruling, and says it is currently considering whether to appeal. 

In the ruling, Judge Leonard says: “In a case of this complexity the defendants could not receive a fair trial without advocates to represent them.”

The judge says 70 sets of chambers with barristers competent to undertake this type of work were contacted to represent the defendants.

Only one put himself forward as willing to accept instructions, but subsequently withdrew. 

Alex Cameron QC – the prime minister’s brother, working free of charge on the bid to halt the case – said the defendants would not get a fair trial.

The offences relate to the period between August 2008 and November 2011 and arise out of Operation Cotton, an FCA investigation into land banking firms.

The three companies involved in Operation Cotton are Plott UK, European Property Investments and Stirling Alexander. The FCA says these companies are believed to have taken over £5m from UK investors between 2008 and 2011.

Plott UK and EPI faced compulsory winding up orders in June 2011 and December 2012 respectively after the FSA pursued civil action.

Land banking companies divide land into smaller plots to sell it to investors on the basis that once it is available for development it will soar in value. But the land is often in areas of natural beauty or historical interest, with little chance of it being built on.


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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Three things come to mind about this case:

    1: Solicitors/Barristers refusing to represent clients should be barred from any future legal aid cases.

    2: The judge should not have stopped the case if the defendants were not able to get their chosen legal representation particularly if this legal representation breached the tax payer’s limits. After all I don’t suspect these defendants were particularly worried about the people they are accused of conning according to articles in the press.

    3: Has it come time for complicated fraud trials like this to be heard by a panel of experts rather than the jury, as often these cases fail due to their complicated nature.

    Looks like the justice system has failed innocent investor’s particularly old clients yet again!

  2. Philip Milton 1st May 2014 at 2:07 pm

    Then perhaps the CPS should be the ones bringing (the) claim under the criminal law.

    However, that said it is not the plaintiff’s obligation to ensure the defendant is adequately represented, surely – what a fantastic cop-out for any guilty party subsequently!!!

    Evidently too a ‘no win no fee’ situation was not possible as the assessment was unfavourable in that regard…

    Of course, perhaps the FCA (FSA) is contributarily negligent for taking so long to act against this scam…. that would speed future action against such operations!

  3. Justice has always gone to those with the fattest wallets. Legal costs are eye watering and always have been.

  4. Nick Pilkington 1st May 2014 at 4:49 pm

    I think any Jury trial should be limited to 1 week. 2 days for prosecution 2 days for defence 1 day for summing up. The jury could then understand the situation & it would concentrate on the salient points rather than somewhat obscure diversions.
    The legal profession would hate this of course because of the reduction in their fees but what a massive saving in costs, court time etc.

  5. I wonder how long FOS would take considering a landbanking case.

  6. Christine Brightwell 6th May 2014 at 12:31 pm

    We have the Rule of Law in this country and everyone has the right to a fair trial. If the defendants were forced to rely on inexperienced lawyers because they were “cheaper” it is likely that the case would not be properly argued and more susceptible to a successful appeal.

    Although it may appear expensive, it is always better to leave no argument or evidence untested in the initial hearing as it makes less likely that an expensive appeal will be allowed. The legal profession would prefer that everyone has the right to proper representation, at the appropriate level of experience.

    Would you be happy to a doctor for a serious condition, only to be told that the proper consultant is too expensive and so you will only have the opportunity to be looked after by someone who has little experience in the required area? Or see a friend or relative (or even yourself) represented by inadequate counsel where you have inadvertently been caught up in some shady business? Of course, a couple of years behind bars may be a small price to you where you case is not properly argued, but not everyone feels that way.

  7. Philip Milton 6th May 2014 at 2:31 pm

    Of course, it is a criminal prosecution and whilst I understand Christine’s arguments, I thought Barristers on the panel couldn’t turn down a client….

    and what’s the difference between the present system for any accused – what is the difference between an inexpereinced barrister and an experienced one? They learn somewhere and my experience with the law suggests most of their learning is often at their clients’ expense!

  8. Christine

    So what you’re saying is that if a financial fraud case is too complicated then the accused should walk free.

    No wonder why people don’t have faith in financial services!

    As previously mentioned I personally believe that these types of cases should be heard by specialist criminal panel of judges.

  9. Christine Brightwell 6th May 2014 at 5:11 pm

    No, the defendants should not walk free until the hearing is properly argued and considered and all evidence tested. With properly experienced representation.

    Junior barrister (up to 10 years call) gain experience of very difficult cases by supporting an experienced QC in many cases. This keeps the costs down as the junior does the “donkey work” as it were. If the QC were to carry out all of the research etc alone the hearings would be longer and even more expensive.

    With regard to turning down a client, no one in this country can be compelled to work – slavery went out a long time ago.

    I understand that this s a frustrating matter, but if you apply this situation to yourselves you would expect to be able to have the choice to turn down a client who could not afford your fees.

    I agree that there is mileage in the possibility of special courts for complex fraud and similar matters, but I am not at the forefront of the thought process in these matters.

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