§ Mr. Speaker
Before I call the Secretary of State for the Home Department, may I say that in this debate, as in the last, about a dozen right hon. and hon. Members wish to take part. At the beginning of the previous debate some of the speeches were unduly long which meant that some hon. Members who were called later had to compress their speeches into two or three minutes. I hope that in this debate there will be a fairer distribution of time.
§ 7.1 pm
§ The Secretary of State for the Home Department (Mr. Douglas Hurd)
In the month since the publication of the Roskill report there has been much interest in the media concerning its recommendations, and this debate gives the Government an opportunity to hear the views of Parliament. I am glad it has been possible to arrange early debates, both here and in the other place, because it fits exactly the structure of our response to this report, which is to consider, consult and conclude with care and speed. I do not intend to make a long speech this evening because this is an opportunity for the Government to listen rather than to pronounce. The Government will take full account of the views of this House before we reach a firm decision on a report which is important.
A will to listen does not mean a will to delay. We intend, in the next Session of Parliament, to introduce a criminal justice Bill which will seek improvements in many aspect of the criminal justice system and the powers of the courts. The Bill will be wide and substantial and the proposals following the Roskill report will be a crucial part of the Bill. A White Paper will be published shortly which will set out the proposed measures in greater detail.
We intend to create and seize every opportunity for stern action against fraud. We think this is crucial for the City and for the country so that private enterprise can flourish in a clean environment. It is crucial for public confidence, and our competitive position in international markets that the probity of our financial institutions, especially in the City, should be beyond doubt. Those who save and invest, whether grand or small, should be well protected by our law from dishonest practices, however complicated the transaction. We are determined that the pursuit and the bringing to justice of fraudsters should be carried out with commitment and skill. If our present instruments for cutting our fraud are blunt we must manufacture a new carefully directed scalpel.
The report is radical. Some of its recommendations have been criticised but no one has criticised the skill and thoroughness with which the Committee completed its task. On behalf of the Government and the House, I would like to thank the Committee for its work and record our immense admiration and sincere thanks to Lord Roskill and his colleagues for the major contribution which the report makes to the fight against fraud.
When one studies the subject in a wider prospective it is fair to say that the strategy adopted in 1983 is beginning to show results. The fraud investigation group has been established on a permanent basis for more than a year. This has been a successful attempt to reduce the fragmentation in the investigation and prosecution of complex fraud cases. We have to go further down that path. The report vindicates the 1983 decision to appoint a committee to look at the way in which fraudsters are caught and brought 1149 to justice. The Financial Services Bill, now before the House, contains measures which should substantially improve the effectiveness of self regulation within the financial markets. Early detection of irregularities can often prevent serious fraud and as with all crime, prevention is our first aim. If prevention fails then the machinery for dealing with fraud must be effective.
The legal profession may have doubts about altering some time-honoured ways. I have already learnt the deep suspicion with which many hon. Members who are members of the legal profession regard the suggestions for change. Those whose professions put them in the centre of financial transactions are perhaps less hesitant. Certainly Lord Roskill's committee was not hesitant.
The committee's message to the House and to the Government is that one cannot send a policeman on a bicycle to catch a runaway car. We have to equip those who chase fraud with the same speed already possessed by the fraudster. I do not doubt that there are valuable conclusions to be drawn from an examination of the present investigation and prosecution arrangements. If fraud is not effectively uncovered and detected then no procedural reforms of the law and later conduct of criminal proceedings, will deter the big fraud operators. At present responsibility for investigation and prosecution is shared by the police, the Director of Public Prosecutions, the Department of Trade and Industry and other agencies. From April the prosecution functions of the police will move to the Crown prosecution services in certain areas and from October throughout England and Wales. The cooperation between these major agencies has greatly improved in recent years and permanent Fraud Investigation Group arrangements are now in place.
FIG brings together the police and other investigators —accountants, interested Government Departments, counsel and members of the DPP's staff. One of the Director's lawyers exercises day-to-day supervision —acting almost as one of the "case controllers" which the report recommends. The aim of FIG is to concentrate on major frauds, although the categories are not closed, and to complete investigations quickly and to bring to an end inquiries which turn out to be fruitless. That is the present position.
Lord Roskill suggests that other arrangements are still too fragmented and he recommends an urgent inquiry into the possibility of a new unified organisation responsible for all the functions of detection, investigation and prosecution of serious fraud cases. My right hon. Friend the Chief Secretary to the Treasury is studying this most closely with other Ministers. He is also considering much of what the report has to say about the deployment of resources to combat fraud—that is probably the most artistic job for a Chief Secretary to undertake.
The Department of Trade and Industry and the office of the Director of Public Prosecutions have a provision for extra staff—the DTI for nearly 200 posts, which is a big increase, and the Director of Public Prosecutions for nine extra lawyers who will be assigned, full time, to fraud cases. I know my right hon. Friend the Chief Secretary's inquiry will be done briskly. I understand that he hopes to reach conclusions by early summer. If, as may well be, those conclusions require something extra in the criminal justice Bill, we shall see to that.
1150 The inquiry will, of course, have a bearing on the role of the police. Lord Roskill has some practical recommendations of immediate relevance to the police. The House is aware that I am carrying out an urgent review to assess the specific need for further increases in the resources in the establishment of the Metropolitan police. The fraud squad is part of that review, and I hope to complete it very shortly now.
The accounting advice which Lord Roskill thinks the police need is available through the fraud investigation group, and steps are being taken to recruit three additional accountants. On the initiative, which is welcome, of the accounting profession, a panel of experienced accountants in private practice has been set up in London to help the police and the director on a case-to-case basis as necessary.
The committee recommends also a career structure for officers in the fraud squad. Being a practical committee, it recognises the difficulties in implementing the recommendation within a generalised service such as the police. The joint Metropolitan and City fraud squad is realistically the only squad of sufficient size —its strength is about 190 officers — to offer a practical opportunity to introduce a career structure. Both commissioners have now agreed to my request that they should examine the feasibility of a career structure for officers in the joint squad. Outside London, the Association of Chief Police Officers will consider the scope for second or subsequent periods of service in the fraud squad to build up the experience which officers accumulate. The association will report back to me.
Lord Roskill recommends better training for the police in fraud investigation and the Association of Chief Police Officers has agreed to review the training provision for fraud squad officers.
§ Sir Eldon Griffiths (Bury St. Edmunds)
My right hon. Friend will be aware that in a complicated City fraud as many as 25,000 man hours of detective time will be expended. If some of the best detectives are brought into the fraud squad, as I believe they must be, that will have the consequence of removing experienced officers from other areas of detective work.
§ Mr. Hurd
That is right. That is one of the matters that will be in the two commissioners' minds as they undertake the exercise of considering a career structure.
I turn to the substantive law on which the committee makes recommendations, especially the use of the common law charge of conspiracy to defraud, where there is clearly something amiss. With the agreement of the Chairman of the Criminal Law Revision Committee, Lord Justice Lawton, I have asked the committee to produce a report with the following terms of reference:To review the restrictions on the use of a charge of conspiracy to defraud in the light of the decision in Ayres  AC 447 and subsequent cases and to consider whether these restrictions could be removed without causing injustice to defendants.I have asked for urgent advice. In the relative excitement generated by proposals to reform the enforcement of the law, we must not neglect the need to ensure that the law itself is sensible and enforceable.
I shall not say much this evening on the committee's proposal for a fraud commission. It would be a body within the existing machinery of Government with an independent chairman and it would monitor the pursuit of 1151 fraud, inquire into major breakdowns, look into delays and publish an annual report. At this rather early stage I have much sympathy with the idea of a watchdog body of that sort but I shall be interested in any ideas that right hon. and hon. Members have about the proposal. Before reaching a conclusion, we shall set up a model of how such a commission would operate and then come to our conclusions upon it.
Our approach to the recommendations that touch on the jury system is still open and I shall listen with close attention to the views of the House. I have noted the views which were expressed in an excellent debate in another place. When we publish our White Paper on the Criminal Justice Bill, there will be a wider forum for consultation.
I shall put one or two considerations before the House that might focus the debate. The main recommendation is that a judge and two assessors should replace a jury in especially complex fraud trials. Naturally many questions arise. The right hon. Member for Manchester, Gorton (Mr. Kaufman) began to raise these questions on 14 January and expressed the belief that we cannot define complexity. I accept that that is a major issue. I do not think that the guidelines in the report could be translated easily into statute, but there might be no need for a rigid approach of that sort. One criterion which could have an honourable place if the idea of a tribunal took root is as followsthe complexity lies in the fact that the markets or areas of business operate according to concepts which bear no obvious similarity to anything in the general experience of most members of the public".
What are the arguments for placing such cases beyond the jury system?
§ Mr. Robert Maclennan (Caithness and Sutherland)
Does the Home Secretary agree that many complex crimes are quite beyond the comprehension and experience of the general public apart from fraud?
§ Mr. Hurd
Indeed. I understand that argument. I wish to make it clear that there is no feeling in the Government's mind that we should go beyond the Roskill report. I think that Lord Roskill advanced an argument for ring fencing in this area, but I would not want the element of truth in what the right hon. Member for Caithness and Sutherland (Mr. Maclennan) has said to lead us into considering doing away with jury trials for other types of offence, even though they might also he complex. It is the comprehension of the issues that is basic to the Roskill recommendation.
§ Mr. Hurd
I shall make a little progress and then I shall be happy to allow the right hon. and learned Gentleman to intervene.
In a complex transaction, the final question may be whether the accused was a party to an illegal arrangement, but perhaps that cannot be decided fairly until the nature of the transaction is fully established and analysed. I think that juries can have serious difficulties in understanding the evidence in complex fraud cases, and understanding the relevant evidence is important to the doing of justice both to the innocent and the guilty.
The argument does not seem to hinge on the precise rate of acquittal in fraud trials. Instead, it is directed to whether the complexities of the proceedings may be leading to arbitrary rather than just verdicts. The committee received anecdotal evidence to the effect that the difficulties of 1152 presenting the facts in complex cases may lead to decisions to proceed with lesser charges than might be justifiable in some cases. I think that the House would regard that as unacceptable.
Finally, I must have regard to the interests of all involved in the criminal justice system, not least the accused, in adopting mechanisms which reduce congestion and delay and dispose of cases with reasonable speed.
All these considerations are in favour of the committee's conclusion on juries, but there are arguments against it, some of which appear in the powerful minority report of Mr. Merricks. No one doubts that major fraudsters deserve substantial periods of imprisonment, but in our system of open justice is it right that those who risk substantial terms of imprisonment should forfeit the right to be tried by a jury, not because their crime was more serious but because it was more intricate than the next man's? Would a tribunal remove some of the disciplines from counsel to present the case in a comprehensible manner? Might individuals lose their liberty for reasons which few of us could understand? If the real issue is dishonesty, are not ordinary people as good or better judges of the facts than experts in high finance? If the other reforms will simplify matters, is there a case for trying them out first?
The House might wish to pause to reflect on a point which I have not heard put before. If a tribunal were judged to be the fitting answer, as it might be, is it right that majority verdicts should prevail so that the judge might differ from the eventual verdict, having been outvoted by the two assessors?
§ Mr. John Morris
Will the Home Secretary address himself to the issue which was raised by the hon. Member for Caithness and Sutherland (Mr. Maclennan)? What is the argument for ring fencing fraud cases, which might include experiences outside the normal for a jury, as opposed to other complex cases which might also involve experiences outside the normal for a jury?
§ Mr. Hurd
I think that Lord Roskill would argue that there are a substantial number of complex fraud cases and sufficient for special provision to be reasonably argued. I believe that he would argue also that there would not be a sufficient number to justify special provision on other indictments, although occasionally such cases may occur. Nonetheless, they would not be of sufficient number to make necessary the introduction of special arrangements.
There are obviously strong and different views about this which cut across party lines. It seems to me that the legal profession is divided on the recommendation, and the financial professions are overwhelmingly in favour. I expect that this is the last occasion I shall be able or, indeed, shall want to tread a path down the middle.
I should like to end the analysis on this point. It would be wrong and unjust to the committee if we saw this as an attack by it on every person's right to a fair trial in our courts. The committee has made a careful and sensitive attempt to tackle the fundamental question of how to secure a sound verdict. I think that a sound verdict must be our objective. It is as much in the interest of the innocent defendant as it is in the interest of society to bring fraudsters to book. I hope therefore that we will have, as I am sure we shall, a reasonable and balanced debate on this point.
Dealing still with juries., the committee put forward views on the defence right of peremptory challenge and the 1153 prosecution right of standby. The distinction between this and the last point about complex fraud tribunals is that with the tribunal case, for the reasons which we have been discussing, discussion is confined to the relatively few cases of major fraud. When one is discussing what Lord Roskill had to say about peremptory challenge, it must be right to look at that more widely.
There has been a lot of discussion, quite independent of fraud, on the merits of change both here and elsewhere. I do not need this evening to go over that discussion. I am quite sure that it cannot sensibly be dealt with for fraud cases alone. In the criminal justice White Paper, we will set out options for change. We shall not seek to abolish ancient rights lightly, but nor shall we hestitate to act if the preservation of the integrity of the jury system is in question.
These two jury matters have aroused high feelings, and that is quite right, but in my view they do not lie at the heart of the report. At the heart of the report are the radical proposals to reform the rules of evidence, including the easing of the gathering of evidence from abroad and the easing of the rules about documentary evidence. We have also here major procedural suggestions to formalise hearings preparatory to Crown court trial, and an associated obligation on the part of the defence to outline the nature of its case.
We find these recommendations immensely constructive and timely. We believe that their potential effect on most cases arising from fraud should not be lost sight of in hot argument over the mode of trial for a minority of particularly complex cases. Few people now believe in my experience that our rules of evidence have kept pace with the 20th century, and the reforms begun in the Police and Criminal Evidence Act 1984 to allow more documents to speak for themselves found favour with the Roskill committee. Let us now see whether we can go further, as he suggested. Let us also hope that some formalisation of the pre-trial reviews already operating in many Crown courts can clarify the issues to be put at the trial, and that a spirit of co-operation can prevail so that both parties are saved the laborious ritual of arguing matters of no consequence before patient jurors. Let us look particularly hard at the scope for participation in mutual assistance treaties with other countries to facilitate the tracing and conviction of those who perpetrate international fraud.
I have skimmed through these important proposals quite quickly, but I should like to make it clear that we welcome this batch of proposals warmly. We shall take account of views expressed today and of those which may yet be offered by the judiciary, practitioners and others with relevant experience. But we start from a position of willingness to legislate on the basis of these highly significant proposals at the earliest opportunity.
That is the spirit in which we approach the report. I hope that I have clarified some of the central themes. I hope that I have re-emphasised our stern approach to this subject and our willingness to think and act radically about it. The touchstones of our response are justice, efficiency and effectiveness in bringing to account the perpetrators of fraud. We shall carry through all the proposals in the report which pass those tests.
§ Mr. Gerald Kaufman (Manchester, Gorton)
The debate comes at at time when public concern about fraud is greater than it has ever been. A batch of unwholesome City scandals has justifiably aroused that concern. But, even without Johnson Matthey, without Lloyd's and without the unsavoury aromas surrounding Westland share dealings, the extent of fraud and its increasing dimensions would certainly justify the disquiet among all sections of the population and in all parts of the country, especially among the small savers, who can least bear the irrecoverable loss and even ruin that fraud inflicts.
Mr. Doiran Williams, the Assistant Director of Public Prosecutions, in a rare public announcement, has voiced the feelings of millions in describing fraud asa significant destructive factor in our national life.
In the outstanding report which we are debating this evening, Lord Roskill and his colleagues declare starkly:in the United Kingdom. fraud is a growth industry".The report goes on to warn:We hope that the gravity of this situation will not be underestimated. Fraud is posing a threat to London as a financial centre and to the considerable volume of invisible exports which represents a major factor in the economy of the country.
The sums involved are enormous. A few days ago it was reported in the press that a Home Office survey soon to be published estimates that the loss to the United Kingdom financial community from fraud runs annually at £750 million. Another study calculates that British companies are now being defrauded of £3 billion or more a year. A survey conducted by the accountants Ernst and Whinney has discovered that the average loss per company from fraud amounts to £6,156 a year, which again comes to around £3 billion nationally.
Let us be clear that these are not abstract losses which can easily be borne with a shrug. They are huge sums of money which could have been directed to constructive investment and to the creation of jobs. The extent of this plague of fraud is very wide. Fifty-six per cent. of companies feel that they have experienced fraud in the past, are experiencing it now or may be vulnerable to fraud in the future. Sixteen per cent. suspect that their companies may be a victim of fraud now, and only 1 per cent. of companies surveyed believe that fraud has decreased in the past five years. No fewer than 54 per cent. feel that it has increased. The latest crime statistics show that in the 12 months to September 1985 the increase in the crimes of fraud and forgery was 9.8 per cent. Among all categories of crime, this increase was second only to the 9.9 per cent. in robbery, and there were six times as many frauds as robberies. Those were only the crimes which were notified. Many more frauds are never brought to the attention of the authorities.
Even if all frauds were reported, the authorities are simply not equipped to deal adequately with them. For one thing, the pursuit of fraud is fragmented among far too many organisations whose co-ordination, where it exists at all, is often makeshift.
Between 1978 and 1985 the joint strength of the Metropolitan and City of London fraud squads itself was steadily rising. The Roskill report informs us that in 1983 the Metropolitan and City police company fraud department had its strength deliberately reduced by 10 per cent. because more officers were needed to combat street crimes and burglaries, a point to which the hon. Member for Bury St. Edmunds (Sir E. Griffiths) drew attention. 1155 Over the country as a whole, as the Roskill report points out, the strength of the fraud squads represents approximately 0.5 per cent. — one two-hundredth—of total police manpower.
For England and Wales, the fraud squad totals fewer than 600. We should compare that with nearly 300 in Hong Kong, which has only one twelfth of our population and therefore proportionately six times as many police pursuing fraud. What is more, the London fraud squad personnel are constantly changing, and it is said that it is common for an officer to be promoted in the middle of a complicated case to traffic or diplomatic protection.
It is no wonder that Mr. Doiran Williams, the Assistant Director of Public Prosecutions whom I have already quoted and who controls the fraud investigation group, recently complained that all who work in the fraud divisions struggle with what he called a "quite monstrous case load". From start to finish, the process of pursuing fraud is bedevilled by a shortage of resources. To me, one of the most shocking revelations is to be found in paragraph 6.34 of the report, which says:It is important, in our view, for the judge who is studying a voluminous set of papers in a fraud case out of court to be able to dictate the crucial points in the case so that they can be set out in typewritten form for his later benefit. We understand that the secretarial facilities (typists. audio equipment) available to judges at the Central Criminal Court and elsewhere are seriously inadequate and make little or no allowance for this kind of work to be done. This is a matter of concern.A matter of concern! I admire Lord Roskill's measured language. It is nothing short of a scandal. It is lamentable that a major report such as this has to be reduced to such de minimis recommendations as the recommendation that judges should be given adequate secretarial facilities. That is only one out of 112 recommendations in this definitive document.
It is a tribute to the thorough and thoughtful work of Lord Roskill and his colleagues that no more than a handful of the recommendations are controversial. My right hon. and learned Friend the Member for Aberavon (Mr. Morris) will, with his special expertise, discuss many of these matters if he catches your eye, Mr. Deputy Speaker. Those which give rise to some concern and which I feel should be mentioned now include recommendation 58, which says:The law should be altered so that the defence are required to outline in writing the nature of their case at the preparatory hearing stage.This suggestion is made the more worrying by recommendation 59(i), which says:The prosecution and the judge should be entitled to comment at the trial, and the jury should be entitled to take account of and draw any appropriate inference from the defendant's failure to disclose a particular line of defence on which he relies at the trial.
§ Mr. Gerald Bermingham (St. Helens, South)
Does my right hon. Friend agree that it would be highly prejudicial and completely contrary to the whole of our judicial system if, in a case in which the defence did not discover its line of defence until after the preparatory hearing, adverse comments could be made at the trial?
§ Mr. Kaufman
My hon. Friend has a legal experience that is denied to me. I accept and am impressed by what he says. My view, as a non-lawyer, when I read the report was that this provision was potentially dangerously prejudicial and I hope that it will be examined with great care before the Government contemplate proceeding with it.
1156 I am also worried by recommendation 78, which is that the defendant's right of peremptory challenge of the jury would be abolished together with the prosecution's right to stand by for the Crown. That needs the most gingerly consideration.
The recommendation that has aroused the greatest controversy is 82, to which the Home Secretary referred, and which states:For complex fraud cases falling within certain Guidelines, trial by a judge and two lay members should replace trial by judge and jury.I have already said, and I shall plainly say again now, that this recommendation is not acceptable to the Opposition. We want fraudsters to be convicted and we want them to be punished. We would like the worst to be punished in an exemplary way, but we believe that they should he fairly punished after being fairly tried and clearly found guilty.
One of the things that worries us most is the concept which is introduced by the majority procedure on the proposed tribunal of reasoned acquittal. The concept of reasoned acquittal is a very dangerous innovation, and I very much hope that it will not be proceeded with. Our objections are best summed up in the note of dissent by Mr. Walter Merricks, which are published at the end of the report. He refers to the constitutional argument advanced by Lord Devlin, among others, that the right to jury trial has become so much of an institution that it has become more or less a convention of the constitution that citizens should not be liable to more than a limited term of imprisonment otherwise than on a jury verdict. He said:The burden is on those who wish to alter the system of jury trial, not simply because that is the present system, but because the right of the citizen not to be liable to incarceration for a lengthy period (the maximum sentence for conspiracy to defraud is life imprisonment) other than on a jury verdict has become a civic right which should only be dislodged for good cause.The Home Secretary has said that the problem of definition of complex cases is difficult. The report draws attention to the fact that, last year, in Hong Kong, these difficulties were revealed and had to be discussed when it was there proposed to try complex commercial crimes without a jury.
Moreover, as Mr. Merricks says, there is little or no evidence to suggest that complexity is a deterrent to prosecution. Figures for 1983 provided by the Director of Public Prosecutions show that, out of 71 cases in which it was decided not to prosecute, only one failure to prosecute was due to complexity. It seems that, in that case, cost was just as important. There is a danger that, with no incentive to simplify, trial before only a judge and expert lay members would involve more complexities, not fewer, and that that would work to the disadvantage of the accused as well as to the bewilderment of the public.
Even more worrying is the possibility of the removal of the right to a jury trial being extended from fraud cases to others. The Roskill report states frankly:We realise that if our recommendations are adopted in fraud cases it would be logical for some of them to apply in all criminal cases … we have been careful to ensure that we were not proposing changes in law and procedure which we would not be prepared to see applied to other types of criminal case.In Monday's debate in the other place, for the Home Office, Lord Glenarthur rather assuringly said:I should make it clear that we do not consider this recommendation"—to dispense with a jury in complex fraud cases— 1157to have any application wider than the complex fraud cases which the committee had in mind." —[Official Report, House of Lords, 10 February 1986; Vol. 471, c. 72.]That was not the impression given by the Home Secretary in his statement last month when he said:Some of the recommendations may well be applicable in other sectors of the criminal law besides fraud."—[Official Report, 14 January 1986; Vol. 89, c. 928.]
§ Mr. Kaufman
I may save the right hon. Gentleman making an intervention, but if he wishes to make it I shall give way. Tonight, he appeared to have shifted from that stance towards that given by Lord Glenarthur. If so, it is welcome and the right hon. Gentleman need not rise from his relaxed position to reiterate it. Whatever assurances we receive, I believe we should heed the important warning in the joint statement issued by the Criminal Bar Association and the Law Society Criminal Law Committee. The warning they give is of great importance:History shows that constitutional changes based upon particular problems are seldom correct and often regretted.
§ Mr. Kaufman
I am glad that the right hon. Gentleman has said that. I had the privilege—I shall not go so far as to say the pleasure, although I do not mean that as a criticism of the literary style — of reading the report from beginning to end. Of course I saw that. I also saw the two quotations which I felt it right to make. The committee did not make any caveat or exclusion in paragraph 1.5 when it said:if our recommendations are adopted in fraud cases it would be logical for some of them to apply in all criminal cases … we have been careful to ensure that we were not proposing changes in law and procedure which we would not be prepared to see applied to other types of criminal case.It is important to get it clear because we are opposed to the Government proceeding along that path. We do not believe that it is a proper and acceptable change. If they do so, it is very important indeed for it to be made clear that it is a unique change even though my right hon. and learned Friend the Member for Aberavon has already intimated in an intervention that it would be illogical.
§ Mr. Richard Hickmet (Glanford and Scunthorpe)
Whether or not the recommendation about jury trials is confined to complex fraud cases, no doubt the right hon. Gentleman will be concerned with the final sentence in paragraph 8.22:Society appears to have an attachment to jury trial which is emotional or sentimental rather than logical.
§ Mr. Kaufman
I accept that completely. There is logic to a jury trial, but in a democracy based upon consent, emotion and sentiment have an important place. I warn the Conservative party that far too often it makes the mistake of pursuing the path of tidy logic against possibly fuzzy public sentiment. Fuzzy public sentiment is important in a consenting democracy.
§ Mr. Hickmet
The right hon. Gentleman has made precisely the point which I was endeavouring to put to him. The statement in that paragraph is extremely 1158 dangerous. I agree with the manner in which the right hon. Gentleman has analysed it and despatched it. It is a most dangerous statement with which I hope the Home Secretary does not agree.
§ Mr. Kaufman
Then we are pals together and that is all right.
I sum up my argument at this stage by advising the Government to steer clear of that proposal. If they do, I believe that they will have the support of most hon. Members on both sides of the House.
§ Mr. Ivan Lawrence (Burton)
Since he is as concerned as everyone else that the system should not be unfair, has the right hon. Gentleman considered the possibility that some accused people in very complex fraud trials involving, for example, City institutions may be worried that juries may not be able to understand the matter and may think that a special tribunal could understand it? In very complicated trials, might there not be an argument, for the protection of the innocent individual, that he should be able to choose, if he wished, a specialist tribunal in which he had more confidence than a jury? Has the right hon. Gentleman considered that and has he ruled out all possibilities of having a special tribunal even in such circumstances?
§ Mr. Kaufman
If I were to go to trial for any offence, I am sure that I would cast around and try to decide the best way to be acquitted. But we do not base jury trial on subjective approaches in individual cases. I wonder whether, before his trial started, Mr. Ponting believed that he would be tried fairly by a jury. I wonder too if he believed that when it was decided, rightly in my view, by the Government to make available the extremely complex document, the "crown jewels", for the jury to consider. The jury considered it and came to a conclusion with which I agree. Hon. Members may make an ex parte judgment, but we are considering the general question of the rightness of jury trials in cases where people are liable to long terms of imprisonment. On that I do not wish to depart from the views that I have put to the House. The proportion of my speech on those matters has been lengthened by the interventions, but I do not regret that.
Dozens—scores indeed—of the Roskill recommendations can usefully be implemented by the Government with the support of the Labour party and no doubt with the support of Conservative Members. For example, it is plainly absurd that the pursuit of fraud should be split among 47 organisations, co-ordinated imperfectly where it is co-ordinated at all.
I welcome especially the recommendations to examine the creation of a new unified organisation responsible for all the functions of detection, investigation and prosecution of serious fraud and, meanwhile at any rate, the establishment of a fraud commission. The recommended appointment of a case controller for each serious fraud case makes obvious sense, as does the provision of more expert accounting staff for the Director of Public Prosecutions and police fraud squads.
We also support nomination of a trial judge at an early stage after transfer or committal to a Crown court and the provision of adequate time for the judge to familiarise himself with the case before the preparatory hearing. Again, speaking as a layman and referring back to the 1159 passage about secretarial facilities for judges, I am astounded that such facilities are not already available. It shows the makeshift way in which we approach justice.
Above all, recommendation 10 goes to the heart of the whole problem. Without the Government's commitment to that recommendation they might as well not have asked Lord Roskill to do this essential and painstaking job. The recommendation states:The resources devoted to the pursuit of fraud must be expanded as a matter of priority.That sounds elementary, but resources will be provided only if the determination exists to provide them. It must be said that far too often the determination to pursue fraud has not been evident. The Economist has drawn attention to what it calls the "lack of determination". It stated that, in 1983, 323 reports of alleged company fraud were reported to the Director of Public Prosecutions but only 47 were prosecuted.
There are other failures, too. The Roskill report deplores what it calls:the reluctance of individual police fraud squads to seek assistance from other fraud squads because the requesting force would be required to pay for the help given.In Manchester we are complaining because we have had to pay £400,000 out of our rates to finance security round a trial which we did not ask to be held in Manchester. That financially prudent consideration—the reluctance of a requesting force to pay for help given—was not evident during the miners' strike when police forces spent £200 million, if not more, on exactly that kind of mutual assistance.
Again, The Times—pre-Wapping—quoted the Roskill report's estimate that the cost of a complex fraud trial is £500,000, stated that the Director of Public Prosecutions or the tax authorities were reluctant to press cases which cost so much unless they can safely predict conviction on serious charges. No such financial meticulousness has governed other decisions to prosecute. Only recently and at great expense there have been the trials of miners from Orgreave and Nottingham. The Orgreave trials cost taxpayers £500,000, and those in Nottingham cost a cool £1,500,000. Yet they ended, not in failure, but in a complete fiasco. The position may be more satisfactory if the Government pursue guilty fraudsters with a fraction of the zeal with which they have pursued miners who have been shown to be innocent.
Although fraud is a disgraceful crime which bleeds individuals, small savers, companies and the economy of vast sums, it is still more socially acceptable and genteel—a nicer crime—than burglary, robbery or theft, all of which are rightly pursued by the police with great zeal, although, regrettably, with varying degrees of success. During the period of the Government, for every one person sent to jail for Inland Revenue fraud, 20 have been sent to jail for social security benefit fraud. It is no wonder that Mr. Walter Merricks calls for prison sentences for unscrupulous operators, both to deter fraud and to reassure the public that double standards are not being applied.
There is a strange whiff of those double standards in a circular issued to chief officers of police by the Home Office last February, and I should be grateful if the Minister would explain that when he replies. The circular, which is printed in the Roskill report, states:The following types of fraud case should also be reported to the Controller of FIG so that he may exercise his discretion whether they should be investigated by FIG.1160 He gives five categories where that procedure should apply. The fourth relates to people connected with Lloyd's of London, the stock exchange and other commercial exchanges, and the fifth involves well-known public figures — for example, Members of Parliament and captains of industry. Why is it believed that such people require special treatment before an investigation is authorised?
§ The Solicitor-General (Sir Patrick Mayhew)
The right hon. Gentleman has unwittingly perpetrated or contributed to a widespread misunderstanding that prosecutions are initiated by the Government. He compared the zeal, or lack of it, with which the Government prosecute fraudsters with that with which they prosecute miners. Does he accept that, in the case of the Director of Public Prosecutions, a prosecution is initiated on the director's independent judgment—he is supervised by the Attorney-General, but there is no Government involvement — and that the miners' prosecutions were initiated by a county prosecuting solicitor at the instance of the chief officer of police? I hope that the right hon. Gentleman will acknowledge that important distinction.
§ Mr. Kaufman
I have known the Solicitor-General for many years, and his integrity is absolute. I always accept what he says, but he misunderstands what I am seeking to say, and, indeed, what other people believe. Obviously, I know that the Government do not instigate prosecutions. Recent cases prove that, if anything could. The Solicitor-General acts independently, and resents it if there is any intrusion on his independence. On the other hand, there is what the judge who sentenced Sarah Tisdall called the "climate of the times". There is also the climate created by Ministers, such as the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), who was Home Secretary when the trials were pending and called for heavy sentences on men who had still to be tried. That was prejudicial to those trials. Therefore, what the Solicitor-General said does not in any way contravene what I have said.
My point is borne out by a leading article in The Times which was published at the same time as the Bill—pre-Wapping. It states about the failure of the detection and prosecution system to bring most of the major professional fraudsters to court:In social terms that has led to a suspicion that the rich and well-connected can get away with it.The Times knows a bit about the rich and well-connected. At the same time, the Financial Times warned even more emphatically at the conclusion of a leading article:the idea that white collar crime is somehow different is not one that society as a whole can tolerate.Mr. Doiran Williams states of fraud:It is divisive in terms of class because where the law enforcement agencies fail—for whatever compelling reason—to prosecute those whose conduct has been demonstrably and grossly dishonest, the cry goes up that 'there is one law for them and another for us'.It is extremely important that society should recognise that fraud is a crime more serious and more damaging than most others, but which is not pursued with the zeal and relentlessness that it should be. That is what the Roskill report is all about. That is why, with the exceptions that I have mentioned, we in the Labour party believe that the 1161 recommendations in the Roskill report form a firm basis for speedy action, and that the public is looking to Parliament for that speedy action.
§ Mr. Mark Carlisle (Warrington, South)
I hope that the right hon. Member for Manchester, Gorton (Mr. Kaufman) will forgive me if I do not follow his latter remarks, but I wish to be brief. Many of the recommendations of the Roskill report go far beyond the ambit of serious fraud crimes, and it is a vital report.
We are right to be worried about fraud. The feeling that major fraud may go undetected, unprosecuted or unpunished would do immense damage to the international standing of our institutions, and it worries many people greatly. We are also right to be worried about what is happening at present in the investigation, prosecution and trial of cases. We should be worried that many people seem to disappear to other countries before we have an opportunity to bring them to trial, that some cases may not be brought to trial because of delay and their complexity and that there is delay in bringing cases to trial. Above all, we should be worried about the length, complexity and expense of trials.
I believe that Lord Roskill is right when he says that the present system is inadequate to bring the perpetrators of fraud effectively and expeditiously to trial, and that the opportunities to create delay and abuse within the system are too great to be acceptable. I suggest that the test against which this report should be judged is to ask whether its proposals reduce complexity. Do they reduce delay, or the length and expense of trials? Do they ensure expedition and efficiency? Those are the tests against which I propose to judge this report. I believe that those are the aims of many of the Roskill recommendations.
It is inevitable that there has been much public comment on the proposals on juries, and I shall state my views on that later.
I welcome particularly the proposals on pre-prosecution. It is important for counsel to be involved at an early stage, and on a full-time basis, if delay is to be avoided. I say that as someone who is in chambers where there are a fair number of Treasury counsel. I have seen the piles of paper which they are required to look through out of court hours, having been involved in other cases during the day. That is one of the practical problems that lead to delay.
I welcome Lord Roskill's proposals on committal proceedings. Fraud committal proceedings are expensive. They cause delay. I believe that they are largely unnecessary, and they can, by delay, be the subject of abuse.
For many years, most committals have been by means of paper committals. That system has worked well, but the time has come to look at the whole question of the right to full committal proceedings. If we are serious in our attempt to accept those recommendations which are aimed at reducing delay and complexity, and at speeding up the system, the replacement of committals by the system of a transfer certificate, with the right of application for discharge by the defendant through the trial judge, with or without the right of some form of limited cross-examination, is a sensible proposal which we should be willing to accept.
1162 The proposals about evidence are even more important. I commend to my right hon. Friend the Home Secretary the speech made my Lord Griffiths in another place. Frankly, I see no reason why the judge should not have the power to allow copies of documents, rather than originals, to be introduced. I see no reason why documents should not be allowed in certain cases to be evidence of the truth of the contents, without the necessity of calling the maker.
I believe that our rules of evidence are outmoded and that we, as lawyers, should not be unwilling to review these rules and change them where necessary. It is important that we should be able to get evidence from abroad taken on commission in cases of international crimes, as the report recommends. I believe that the proposals on evidence will go a long way towards meeting the proposals on mounting a prosecution and proving a fraud, and will help to shorten substantially, and thereby reduce, the complexity and nature of trials.
Most important of all are those proposals in chapter 6 of the report, beginning with pre-trial review. A pre-trial review is often of little value, and might well be described as a farce. It takes place before a judge, who is not the judge who will try the case, and usually with different counsel from those who will be involved in the case. The system must be improved if we are to use it as a means of simplifying the subsequent trial. The proposals by Lord Roskill go a long way towards that end.
Proper preparatory work, which is fairly remunerative is needed. I believe — I disagree with what the right hon. Member for Gorton said, although I agree with much of what he said about the report itself—that we have to accept the proposals in the report on the disclosure at an early stage of the outline of the case for the defence. That is not such a radical recommendation as might be thought. We have been doing that for some years with alibi defence and, so far as I know, we have done so without concern. If we are serious about tackling the problems of delay and complexity which the report has identified, we must be prepared to accept some radical departures from certain rules that we have accepted in the past as right for the conduct of criminal trials.
I welcome the proposals on the requirement to disclose the outline of the defence and the requirement for the defendant to admit facts in advance. If that is achieved, trials can be shortened and simplified, and the things that concern many of us in the report need not be considered. If the proposals that I have mentioned so far are implemented, they will go to the heart of the problem and do more than anything else to simplify, speed up and shorten the trial procedure, and thus ensure that justice is done.
I deal now with the comments on juries. I should not be sorry to see the peremptory challenge disappear. For the first 10 years of my life at the Bar I did not know whether that existed. I never heard it used on circuit, where I believe I was involved in a substantial junior criminal practice. The fashion of challenging juries came about after I went to the Old Bailey. I know that I express a minority view, and that many of my colleagues believe that they should have the right to challenge juries, but I have always stuck firmly to the view that although one has a right to be tried by one's peers, one does not have the right to select who those peers will be.
I have no doubt that while it is right and proper that defence counsel, so long as the power exists, should use the right of challenge, and should be responsible for using 1163 it, in the interests of their clients, the fact is that it can be used to tip the balance in favour of the defendant in an unreasonable way. I should not be sorry to see it go.
Finally, I turn to a more fundamental proposal—that to change the mode of trial. I agree with almost everything that was said by the right hon. Member for Gorton, although he was a bit unfair to the committee, because the report makes it clear that the proposal is limited to complex fraud trials.
I commend to hon. Members the debate on this matter in the other House. It is interesting to note that the Law Lords seemed to favour the abolition of trial by jury, and that the one layman who spoke did so passionately in favour of retaining trial by jury. The arguments set out in the Roskill report do not justify a change of this nature.
The right hon. Member for Gorton referred to the paper published by the criminal law committee of the Law Society and the Criminal Bar Association, which said that to do away with juries would raise grave constitutional issues. I do not believe that the case for ignoring those grave constitutional issues is made out in the report. I prefer the arguments advanced by Mr. Walter Merricks in his note of dissent. The evidence of those who were involved, both on the side of the prosecution and of the defence, the police and others, was in favour of retaining juries. I do not like the idea of changing the system so that people are sent to prison for long periods without first going through the accepted method of trial which we have always used.
I suggest to my right hon. Friend the Home Secretary that it is unnecessary at this stage to pursue that recommendation. I believe that there is no evidence that juries are not working. There is certainly no serious evidence that they unduly acquit. I do not believe that there is any evidence that cases are not being brought to trial because of their complexity, as the right hon. Member for Gorton said. The real objection to jurors in these fraud cases is the unbearable strain imposed on jurors by the length and complexity of the case that they are asked to try.
I believe that, sensibly used, the report's other recommendations will lead to greater simplification and understanding of the issues involved and shorter trials. I think, therefore that one objection to the continuation of jury trial—the unbearable strain on juries, as trials of between four months and six months in the Old Bailey make clear—and the raison d'etre for the recommendation to abolish juries are removed.
I was delighted at the tenor of the speech by my right hon. Friend the Home Secretary. I hope that he is willing to be bold with regard to the other proposals. I hope that he will stand up to the objections that may be made by members of my profession, although we must obviously look at the details. I hope also that he will turn his face against the proposal to do away with juries as a means of trial.
§ Mr. Robert Maclennan (Caithness and Sutherland)
The prevalence of financial fraud is deeply worrying. It is important to the good name of our City and financial institutions that all possible steps are taken to minimise its impact and to detect and punish the perpetrators in an exemplary fashion. The Roskill report is welcome because the committee has authoritatively and speedily brought forward extremely practical suggestions which, if 1164 implemented, will do a great deal to remove public anxiety that fraudsters can slip through the net of our criminal justice system.
The Roskill committee produced a large number of proposals which the House should welcome. I wholly agree with the right hon. and learned Member for Warrington, South (Mr. Carlisle) about the importance of properly handling pre-trial procedures. As I agree with him, it is not necessary for me to comment in detail on the bulk of those points.
I warn against the Secretary of State paying too much attention to the opening statements of the Roskill committee. Perhaps understandably for the progenitors of such an authoritative report, the members of the Roskill committee sought to have the Government treat all the proposals as though they were interdependent and could not be viewed in isolation without damaging the effectiveness of the report. Page 2 of the report states:It follows that substantial alteration of any of our proposals may do damage to the structure of the whole.I hope that the Government will not flinch from the task of rejecting some of the report's major proposals on those grounds. There is no doubt that the House would agree with Lord Roskill's general perception that, if se if-regulatory mechanisms are abused, the law must deliver swift and sure retribution.
The Government have not so far had regard to the need to increase the resources of those responsible for the detection of fraud. The Home Secretary suggested that he was proceeding in a somewhat leisurely way to deal with the requests of the Metropolitan police for an increase in resources and establishment numbers. The right hon. Member for Manchester, Gorton (Mr. Kaufman) dealt at some length with the resources issue. It is not necessary for me to delay the debate by doing more than adopting the arguments he deployed about the lack of police resources. The Home Secretary shakes his head. I hope that that does not mean that he considers that resources are adequate.
§ Mr. Maclennan
I have no doubt that there is a bottleneck such as the right hon. Gentleman describes and that there should be staff increases. I think that many members of the police force, at all levels, would strongly disagree with the right hon. Gentleman's somewhat complacent view about the capacity of police fraud squads to tackle the problems. I hope that the Home Secretary will not take refuge in that. I recognise that there are public expenditure implications and that the right hon. Gentleman will have to persuade his colleagues that it is necessary to meet these charges if we are to take seriously his claim to be tackling the problem. No doubt we shall wish to return on another occasion to the resources issue.
The report raises major issues of principle with respect to criminal procedure. It proposes that there should be pretrial disclosure of the case of the defence. I disagree with the right hon. Member for Gorton. I believe that the committee put forward a strong argument that there is a case for much more openness about the nature — although not the evidence that will be led — of the defence. This aspect of the criminal law should be 1165 reviewed in the round. Unfortunately, consideration of these sensible proposals has been set back by the monumentally silly recommendation in 1972 by the Criminal Law Revision Committee that accused persons must disclose their offence at the police station. If disclosure is to take place, it should be only after the defendant has seen in writing how the prosecution has put its case and after he has had access to proper legal advice. It follows that the prosecution must be required to set out its case in an intelligible way, with a proper and particularised narrative, not just a formal indictment and a pile of statements by witnesses.
There must be other safeguards. If one goes down this route, it will be necessary to ensure that the prosecution has only a limited right to amend its case. On the other hand, the defence should have an unlimited right to amend its case, although it would then risk adverse comments about inconsistency. There would also have to be safeguards to ensure that the prosecution could not nobble defence witnesses whose identity had been revealed by the written statement of case.
I am hostile to the idea of the Government embarking upon this important reform in fraud cases alone. The Roskill Committee said that before implementation this question should be looked at more widely.
I shall deal next with the right of peremptory challenge of jurors. I am not persuaded that it should be abandoned in fraud cases. I understood the Home Secretary to say that the Crown prosecution service will conduct a general survey of the practice of peremptory challenge in all criminal cases. A cautious approach would lead to an appraisal of the evidence and to an examination of the use of peremptory challenge and whether or not it ought to be retained. That must be a necessary precursor to any change in the law. There is no reason for fraud cases to be treated in a different way from other cases.
If the right of peremptory challenge were to be removed, there would inevitably be pressure for the prolonged cross-examination and investigation of potential jurors to determine whether they should be excluded for cause. That risk will have to be considered by the Government. In practice, peremptory challenge allows defendants to feel that they have a certain say in the determination of the jury panel, and it prevents most of the argument and resentment that would otherwise occur. It is not a wholly rational system, but it seems to work. A considerable onus is placed upon those who seek to displace it to demonstrate that it does not work. That is what the Crown prosecution service will seek to determine in its objective appraisal of the evidence.
I shall now deal with what is undoubtedly the most controversial part of the recommendations: the right of an accused person to trial by jury. The arguments were best summarised in Mr. Merricks' minority report. His arguments are extremely compelling. Both the Social Democratic party and the Liberal party are strongly opposed to the abandonment of trial by jury in complex fraud cases. I hope that the Government will resist the recommendations, for reasons that I shall seek to deploy.
Juries, though inexpert, are not necessarily more stupid than judges, lawyers, accountants and bankers. Counsel's task is to seek to explain the issues to the jury in a manner that enables it to reach a correct conclusion. That task is not beyond counsel. It was not demonstrated to the Roskill 1166 Commission that the task is beyond their capacity. It is notable that the evidence led by those who are most closely associated with fraud trials—barristers and solictors—was overwhelmingly against the view that juries reach the wrong decision. I make also a Scottish point, that in Scotland juries try all cases, however complex, without even the benefit of an opening statement. They have to pick up the case as it is put to them. Juries represent the popular, democratic element in the administration of justice. Without juries, the criminal law becomes a closed affair for experts.
§ Mr. Richard Ottaway (Nottingham, North)
If the hon. Gentleman were to be transported to Canada, where he would be entitled to choose between either trial by jury or trial by a judge and assessors if he were charged with commercial fraud, of which he knew he was innocent, would he prefer to be tried by a jury that did not understand the issues or by a judge and assessors who did understand them?
§ Mr. Maclennan
That point was dealt with effectively by the right hon. Member for Gorton. I do not believe that trial by experts is necessarily in the interests of the accused. If a crime of dishonesty has been committed, that is not essentially a technical question. Although the facts may be complex it can easily be assessed by the ordinary man or woman. The system has served us well.
§ Mr. Lawrence
Of course a jury can understand all the complexities of a fraud trial, but it takes much longer to inform a jury of those complexities than it takes to inform a tribunal. Does the hon. Gentleman think that very substantial savings in time and therefore in delay could be made if a tribunal was available in some circumstances for very long and complex fraud trials?
§ Mr. Maclennan
No, I do not. The right hon. and learned Member for Warrington, South dealt effectively with that argument. He pointed out that if the other recommendations of Roskill were to be adopted — namely, pre-trial procedures, the involvement of counsel at an early stage, and a narrowing down of the issues, which is why it is important to look at the statement of the case for the defence—it should be possible greatly to limit the length of a trial. Furthermore, Roskill is perfectly frank about the fact that relatively few cases continue for many months. That does not mean that the time cases take in the courts is acceptable. The length of many of them is unacceptable. There is the problem of witnesses who have a sharp recollection of events having to be called after a case has dragged on for months. Justice is not served by the prolongation of trials. I think that the problem of the prolongation of trials and the difficulties for juries must be tackled before the case reaches that stage.
I was dealing with a wider point—the importance of the role of the jury. I believe that the jury legitimises the exercise by the state of the power to deprive citizens of their liberty for prolonged periods. On rare occasions it can also stand between the citizen and the law and acquit where common morality, decency or sense say one thing and the law says another. I think that that is rather a difficult concept for law-makers to accept, but I think that there have been cases in the memory of the House where that has happened. Having said that, I recognise that those cases place great burdens upon the jury. I think that the judge should have the right to ask the jurors if they 1167 consider that the issues are such that they would find it difficult to come to a conclusion and if they wish to withdraw. There should be literacy tests in cases where there is likely to be documentary evidence. We should also look at the possibility of extending the use of special verdicts, asking a jury to answer specific questions, for example, whether the defendant is dishonest instead of whether he is guilty or not guilty.
On the central issue of whether we should adopt the suggestion of a judge and two expert assessors, in my view the Roskill committee did not make the case that the present system leads to miscarriages of justice or to prosecutions not being successfully brought. It was rightly pointed out that there was only anecdotal evidence and that the overwhelming majority of those who were closely associated with the trials believe that juries came to the right view, or, at least, an understandable view.
The constitutional issue to which Mr. Merricks attached great importance is one to which the alliance parties also attach great importance. The right to elect for a trial by jury in any allegation of dishonesty is one that we should not proceed to dismantle. Let it be clear that dishonesty is an element in many cases other than fraud and, if one steps down that road, the logic of proceeding beyond fraud trials to others will, I am afraid, be pressed by those who wish to tighten the screws of the criminal justice system.
The problem of the definition of a complex case has not been satisfactorily resolved by the Roskill report. Mr. Merricks' rather powerful example of the public incomprehension which would follow in denying the right to a trial by jury to a man who has stolen £1 million by the use of a computer and allowing it to a man who has stolen £1 million from a bank by the use of a gun is one which should be in the Government's mind. I hope that the Government will also bear in mind the probability, indeed virtual certainty, that if a fraud tribunal were established there would be an appeal against its findings. I think that where reasons are given it would be very easy to erect an appeal. That process would lead to a prolongation of the trial which would be opposed to the general thrust of the report.
I think that this has been a most valuable report and that the overwhelming number of its recommendations should be implemented with all possible speed. The importance of the jury has been re-emphasised in public perception as a result of the two Official Secrets Act prosecutions—the Ponting case and the Cyprus secrets trial. I do not believe that the House would be right to accept any proposal to abandon something which has been a fundamental protection of our citizens' rights for centuries.
§ Mr. Deputy Speaker (Mr. Harold Walker)
I remind the House of Mr. Speaker's plea for brief speeches.
§ Sir Ian Percival (Southport)
I hope to respond immediately to that plea. The House owes an enormous debt to Lord Roskill and his colleagues for the time and expertise put into producing the report. We also owe a considerable debt to Mr. Walter Merricks. I say that not merely because he is my wife's nephew, but for two other reasons. I once made a dissenting report and I know what 1168 it means to do that. The second and the main reason is that I agree with so much of what he says. He will know that that has not always been the case.
I want to concentrate on making one point arising from the report. The two principal features in the report are pretrial preparation and whether we should do away with juries in fraud cases. They are intimately bound up with one another. I think that there are constitutional and philosophical reasons for keeping jury trials in cases where the consequences may be serious for the accused. I also think that there are both emotional and logical reasons for keeping juries in such cases.
However, there is an even better, and practical, reason why we should not try to implement that recommendation at the moment. That is the fundamental reason put forward by the Roskill committee for abolishing juries, namely the complexity of certain fraud trials. Looking at it practically, one of the major reasons why cases are so complicated when they get to trial is that they have not been properly prepared. I do not say that as a criticism of anybody involved. At every stage, those who have to prepare the trials are having to overcome practical obstacles that would defeat most people. It is a miracle that some of the cases come to trial in as orderly fashion as they do.
I want to support with all the emphasis that I can the recommendation that we should look urgently at preparations for trial—all pre-trial stages—and here we have a large number of positive recommendations. I doubt whether everybody would agree with every one of them but I am sure that everybody would agree that that is what we have to look at first. I believe that the Criminal Bar Association also has some further proposals in that area.
My plea to my right hon. and hon. Friends on the Front Bench is to concentrate on that part of the report and get on with it, with all the assistance possible. I am sure that both sides of the profession will give their help. A lot of advice might also be obtained from the accountants, many of whom are now specialising in doing the groundwork in preparing cases for a fraud trial. Let us see how far we can get in simplifying the trial itself before we contemplate doing away with what, after all, has been regarded in this country for a very long time, as one of the principal safeguards of the liberty of the subject. I do not say that that tradition can justify sticking with one system for ever in all cases, but it should make us slow in abolishing it and especially abolishing it in any trial where the consequences for the accused of being found guilty may be very serious.
My plea to my right hon. and hon. Friends is get on with it. I am not just supporting the recommendations concerning pre-trial matters. My plea is, let us get on with them, with considering and implementing the improvements we can make in pre-trial preparation just as quickly as possible. The beauty of it is that hardly any of that needs legislation. All that it needs is the will to get on with it. Let us leave other considerations about juries until we have tackled this first and done something about it.
§ Mr. Gerald Bermingham (St. Helens, South)
I have one slight advantage in these matters because I have prepared trials in the past and have trials prepared for me in the present. There is a world of difference between looking at a set of papers that have been prepared for one and a set of papers that one has prepared oneself. The basis behind any prosecution is the quality of preparation, which 1169 is why I endorse almost everything that the right hon. and learned Member for Southport (Sir I. Percival) has said. He is so right. The difficulty with fraud trials, whether one defends or prosecutes, is the way in which they are prepared and presented. It takes just a little effort and careful constructive thought to assemble the evidence in a format easily understood by anybody.
I can take a simple example from experience. About 10 years ago, a series of fraud trials were prepared by the office of the Director of Public Prosecutions, concerning the quality of scrap going into steel works. When the first case eventually came to trial, there were mounds of paper about a mile high. I had the job of preparing the defence and all I did was stand on a bridge and watch a scrap train going by underneath. I realised that one could see the quality of the scrap in the wagons, with tyres sticking up, and various bits and lumps. I then went to look at a mound of scrap in a British Steel Corporation scrap yard. I saw on that mound of scrap, which had been bought and paid for, all the things that were being complained about in the case. In other words, the British Steel Corporation had been buying what was described as fraudulent. The trial collapsed simply because the defence prepared its case by going to have a look.
That example involved allegations about millions of pounds. If those who prepared prosecutions took similar simple steps, the most complex case could be reduced to the most simple terms, and cases could be so much more straightforward. Such preparation would take increased resources, increased manpower in the DPP office and the police force involving employment of counsel and solicitors at an early stage and the creation of a team. All those matters are in the Roskill report and can be implemented straight away.
Roskill has many gems in it, but unfortunately it also has a few flawed stones. The flawed stones come in recommendations 57 to 61 and the later recommendations about the right of disclosure. I take issue with the right hon. and learned Member for Warrington, South (Mr. Carlisle) who said that we have had alibi disclosure for some years. That is a different matter because an alibi is merely somebody saying, "I was not there." The mischief that was overcome by the creation of the rules about the disclosure of alibi was that of the suddenly sprung witness. The defence is, "I was not there. I am not part of this affair."
§ Mr. Bermingham
I agree with the hon. Gentleman.
However, if the Roskill recommendations are implemented, the defence will be called upon to disclose the whole nature of the defence case. That will effectively remove the right of silence. We shall again begin to turn the format of a trial into something approaching the French system of proof of defence. If the prosecution knows what the defence will say, it will target its opening statement and witnesses towards the defence case.
We then have the appalling suggestion—I put it as bluntly as that—that the prosecution and the judge, in almost a team effort, can comment on the failure to disclose. All of us who have been involved in trials, whether on the prosecution or the defence side, know only too well that it is something said, perhaps by a witness, that may open up new lines of defence, ones that had not 1170 been canvassed or thought of before the trial began. If that becomes the principal line of defence, are the judge and the prosecution to comment and seek to discredit on the basis that it had not been anticipated? How often has one seen a witness statement that looked perfect and damning, but when the witness stood in the witness box, he failed to live up to the words that he had written on the paper?
We are talking about human beings giving evidence, not about computerised paper exercises. To remove the right to silence, as the Roskill proposals would, and to begin to shift the onus away from the prosecution proving its case towards the defence establishing its case and proving it, would go to the heart of the system of British justice which says that it is for the prosecution to prove its case.
In this Chamber, I do not have to remind many of the right hon. and hon. Members present that it was not until the end of the last century that the defendant was even allowed to speak in his defence. It is only in the past 80 years that he has had the right to say something. Very often, the defendant says nothing. However, if we implement the Roskill recommendation, we shall start down the road of the defence having to be proved.
Many right hon. and hon. Members wish to speak, so I shall be as brief as possible. I take on board and agree with everything that has been said about retaining the right to challenge and the right to a jury trial. It does not need to be said again by me. The fundamental rights in our system should remain. However, I draw the Government's attention to recommendation 41, which suggests that fair and adequate remuneration should be paid to those involved in such work. This may be the first time that this subject comes to the Floor of the House. I declare my own interest in this matter as a practising member of the Bar.
Perhaps the hon. Member for Putney (Mr. Mellor) might have a word in the ears of the Solicitor-General, the Attorney-General and the Lord Chancellor and point out that even Mr. Roskill thinks that lawyers properly paid might help the service, and that applies generally and not just to complex fraud trials. I have taken the opportunity to raise that matter, which is a burning issue. The quality of those who either prosecute or defend, who prepare either for the prosecution or the defence leads to the quality of justice that we have had in this country for so many years. It would be a sad and sorry day when those skilled and able in these sectors felt it necessary to leave the profession because they could not afford to make ends meet.
Justice is sometimes expensive. By and large, these recommendations should set us on the road to even better quality justice. However, some of the recommendations should be cast aside because they will not enhance the quality of justice.
§ Mr. Patrick Ground (Feltham and Heston)
I agree with those hon. Members who have said that most of the Roskill recommendations in the first six chapters of the report should be implemented. I especially mention the proposal for a fraud commission, case controllers and the importance of legal advice at an early stage of the investigation.
There is much scope for sensible relaxations of the rules of evidence and for greater measures of disclosure. I agree with the comments on that matter of my right hon. and learned Friend the Member for Warrington, South (Mr. 1171 Carlisle). The position mentioned by the hon. Member for St. Helens, South (Mr. Bermingham), could be coped with within the proposals. The right hon. Member for Manchester, Gorton (Mr. Kaufman) referred to better facilities for judges. I remind my right hon. Friend the Secretary of State of what was said by Lord Edmund-Davies in the debate in the other place about facilities for juries, which is especially important when considering jury trials.
Lord Devlin said that the right to trial by jury has come to be regarded as a constitutional right for trials on serious criminal charges. Recently, several leading judges have suggested that jury trials should be restricted in cases of less serious crime. Lord Roskill suggests a substantial restriction at the serious end of the criminal scale. I agree with the hon. Member for Caithness and Sutherland (Mr. Maclennan) that the majority of people in Britain believe that juries bring a valuable element of good sense and human experience to the legal system. That is generally appreciated throughout the country.
If a major change is to be made to the jury system, such a change should not be made as a result of a side wind in this report, but as a result of a thorough investigation ranging across the board of jury trials. It would be wrong of the Government to seek to restrict jury -trials on the basis of a report on fraud.
There are more serious and detailed reasons in the report that should lead the Government not to accept the recommendations in relation to juries. The only research in the report is mentioned in paragraph 8.11, which shows thatin almost six cases out of seven there was no serious complaint about the jury's verdict from most of the participants contacted. None of the questionable acquittals in their sample of cases involved complex fraud and very few were the result of lengthy or involved trials.
Regarding the operation of the jury system in fraud cases, paragraph 8.12 of the report states:We think that, in general, the public believes that juries provide a satisfactory method of trial and this view is held by many of our witnesses.
Another factor to be considered is the number of trials that fall in the category defined in the Roskill report. It is clear from paragraph 8.3 that there are relatively few cases involved. It states:In the five years from 1979 to 1983 there was a yearly average of 26 fraud trials each lasting for longer than 20 working days … The longest single fraud trial lasted 137 working days.The number of trials and the length of cases are inadequate to justify a radical change in the jury system, especially when the perception of the performance of juries is that generally they work satisfactorily.
We have sometimes received complaints about judges and lawyers, but the number of complaints by members of the public, who have served on juries, about their experience of the length and hardship of trials is small in relation to other complaints about the Legal system. That demonstrates the fact that far from being overwhelmed by the so-called hardships mentioned in the report, most members of the public who are required on jury service, even on long trials, treat them as a duty of citizenship and a contribution that they are willing to make to the administration of justice.
§ Mr. Richard Hickmet (Glanford and Scunthorpe)
If the proposals in the report are adopted, they will represent 1172 a fundamental overhaul of court room procedure designed to improve investigation, preparation and presentation of fraud cases. Issues will be more readily identified through the pre-trial review procedure. Presentation of cases will be clearer and more easy to understand and rules of evidence will be modernised and made more effective. Trials will be shorter and will come to the Crown court more quickly.
However, I have grave misgivings about the recommendations about the jury system. Jurors in all criminal cases should be able to read, write and to be numerate, let alone speak English. That proposition is so self-evident that no justification is needed. However, it is a remarkable thing that in fraud cases it is not unusual when the jury is empanelled to discover that some jurors cannot read.
Apart from the welcome recommendations on the literacy and numeracy of jurors, the report contains a detailed attack on the jury system. It attacks not only the challenging of jurers by counsel, but the hearing of complex fraud trials by juries and other general matters. Perhaps the system of challenging juries has been abused. It is not unusual for counsel to give the impression that they are challenging jurors simply to obtain a jury that is weighted more towards the acquittal of the defendant than a just verdict.
The report makes a comprehensive attack on the jury system and then seeks to say that, for the reasons set out in the report and because complex fraud trials are difficult for jurors to follow, trials which fall within certain guidelines should no longer be tried by judge and jury, only by judge and two lay assessors in the form of a fraud trials tribunal. We should welcome the fact that Mr. Walter Merricks was a member of the commission and produced his minority report.
Lord Justice Roskill said that trial by a jury selected at random is a major contributing factor in preventing fraud cases from being brought to trial. He said that the difficulty of presenting a complex case often results in a decision to opt for a less serious charge. There is no evidence for those two propositions. There is no evidence to show that a jury cannot understand a complex financial fraud case if it does not know the background, let alone the dishonest elements.
The minority report shows that, in 1983, of the 179 cases referred to the fraud division of the Director of Public Prosecutions for a decision on prosecution, only one case was not prosecuted on the grounds of complexity. That occurred on the advice of independent counsel and was an intellectual property case. Of the yearly average of 10 long fraud cases tried at the Old Bailey between 1979 and 1983, almost none was a complex fraud case that would be covered by the guidelines. There were carbon paper frauds, Spanish villa frauds and estate agent frauds, none of which could be defined as complex fraud cases.
The thrust of the Commission's recommendations is to reform procedure, presentation and rules of evidence so that that type of case can be understood by a jury. It is illogical to make those recommendations, and then to say, "But the jury system in those cases should be removed in any event." We are told that defendants are no longer tried by juries selected at random because of the exclusions and that, accordingly, those who fill the jury box are not a true cross-section of the public. It is my impression that the 1173 vast majority of people are not doctors, Members of Parliament, policemen or clergymen. The vast number of people who enter jury boxes represent society as a whole.
The report also argues that, because the vast majority of legal cases in England and Wales are heard by skilled people, whether in the magistrates courts, county courts, Queen's Bench courts or even in front of the 60 specialist tribunals, including those on immigration and social benefits, it is sentimental or illogical to retain jury trials in the Crown court. That is an extraordinary proposition. How many of those tribunals have the power to send a man to prison for life or, indeed, for more than one year? Not one. How many of those tribunals, with the exception of magistrates courts, have the power to find a man guilty of a criminal offence? Not one. How many defendants at the magistrates courts, when given the choice, opt for trial before the magistrates court rather than trial by jury? That represents many hundreds of thousands of cases each year.
The report makes serious and damaging attacks on juries. It is essential, as Mr. Merricks said in his minority report, that the general public, as represented by the jury system and the press, should be able to understand complex fraud cases. The challenge to the criminal justice system must be to make such cases understandable to the general public and the press. No man should be sent to prison for a period of up to life imprisonment without being tried by a jury. As Mr. Merricks said powerfully, why should a man have the right to trial by jury because he commits an armed robbery with a sawn-off shotgun and steals £1 million, whereas if he used a computer to carry out a complex fraud, that right could be removed? I welcome the report's recommendations about the investigation and presentation of cases but I hope that my right hon. Friend will reject the suggestion that jury trials in those case should be removed.
§ Mr. Speaker
Unhappily, my request for short speeches was not followed—one Back Bench speech lasted for no less than 25 minutes. If the hon. Members now waiting to be called will speak for five minutes each, I will be able to call all of them.
§ 9.6 pm
§ Mr. Derek Spencer (Leicester, South)
I wish to make five points. The first concerns committal proceedings. The Psalmist said:One day in my courts is better than a thousand.However, when I sat through 80 days of committal proceedings at the Lambeth magistrates court, I felt that one day in court was like a thousand. The way in which contemporary committal proceedings are conducted is, for the most part, entirely futile. They are expensive and I support the Roskill committee and the Royal Commission on Criminal Procedure in saying goodbye to all that.
My second point concerns the desirability of investigation and co-ordination. Without doubt it is desirable. In the Richmond Rendezvous case part of the inquiry was conducted by officers of the Customs and Excise who dealt with the value added tax aspects of the case. The remainder of the case was dealt with by officers from the Inland Revenue who dealt with PAYE and schedule D. There were two investigating officers, two sets of solicitors and two sets of instructions. Each party 1174 arranged themselves on opposite sides of my table and glowered at each other with professional jealousy. It is time to end all that.
My third point relates to the abolition of jury trial. In a sentence I would say to the Government, "Forget about abolishing jury trial and forget it straight away."
My fourth point concerns the conduct of the trial. This is where the most speedy action can be taken. There is much that the judges can do by displaying an aggresive attitude during pre-trial reviews. Severance in appropriate cases works wonders. I am convinced that we must compel disclosure by the defence of their defence. We have abolished trial by combat, but perpetuate trial by ambush. There is nothing to justify the prolongation of the right to silence into the trial. That is consistent neither with common sense nor morality.
My fifth point relates to extradition. Many of the problems of fraud concern extradition. Mr. Pepperel, in the London and County bank case, was extradited from West Germany, and Mr. Caplan so used the judicial process in America that the energetic efforts of the Director of Public Prosecutions were not able to bring him back to this country. That is regrettable, but unfortunately it happened.
Although the report raises many points of law, the most important point is a political point that requires action, and we ignore that at our peril.
§ 9.9 pm
§ Mr. Ivan Lawrence (Burton)
The Roskill report is splendid, but I have strong reservations about it. Mainly this is because Roskill allocates too much of the blame for fraud to the current procedure for conducting fraud trials and so suggests remedies which are quite unnecesarily radical.
Since more people are convicted in fraud trials than for most other offences, it ought not to be the trial procedure that causes concern. What worries people is that City swindlers go abroad and cannot be extradited back to England, that dishonest City men are given immunity from prosecution if they give evidence before internal, self-regulating City institutions' own tribunals and that some fraudsters never come to trial because the resources of police manpower, accountancy, expertise and investigative procedures are inadequate to bring them to justice.
Tackling the extradition law and strengthening powers of investigation, establishing a fraud investigation group, and making available more police, legal and accountancy resources for the pursuit of the fraudulent is where the emphasis should lie.
Roskill's proposals for the improvement of investigation, preparation, presentation at court, training, and staffing resources are desirable and most welcome.
We must pause for deep thought over Roskill's proposals to take fraud out of the criminal justice system as we know it—a system which is designed to secure the conviction of the guilty by fair means and the acquittal of the innocent. If we are panicked into doing anything which undermines our trust in the legal system as being just, we threaten one of the most important pillars of our society.
I am not sure how useful some of the Roskill recommendations will be. I do not feel strongly about paper committals, but the proposals go in the opposite direction to that which many of us had said should happen 1175 —we should use committal proceedings far more to ensure that inadequate cases are thrown out before time and money are wasted further up the ladder.
Pre-trial reviews—the so-called tea parties—are a notorious waste of time and will only work if the legal aid fund becomes so generous that the trial barrister can be guaranteed to attend and the list office can ensure that the trial judge is present. Both are somewhat optimistic expectations.
In a fraud trial, someone is deceived by a false representation into doing something that is against his or her interests. That is often the central element of all sorts of other criminal offences—rape, treason, tax evasion, and bilking a fare or a restaurant bill. Fraud cases are not always the most complex. There are treason, drug and even murder cases where the competence of a jury of ordinary people can be taxed.
How long will it be before what Roskill proposes for fraud will be extended to other complex cases of deception? If the law does not so develop, why not?
Where will be the logic of requiring the disclosure of the defence in one case rather than another? Justice in a commentary upon Roskill puts it this way:Why should a defendant accused of deceiving an insurance company into wrongly parting with money be obliged to disclose his defence but not the defendant who has deceived a restaurateur into parting with a meal for which he does not intend to pay or a women into consenting to sexual relations for favours which he does not intend to provide?
The law must apply evenly and it will not so apply if some of the Roskill proposals are implemented. It will become distorted.
I come to juries. The peremptory challenge may be irritating, although only in cases where there are a large number of defendants can it be used to tailor a jury. To abolish it, will cause all sorts of problems. We are already moving towards tailored juries with jury vetting and a kind of voire dire. If the safety valve of the peremptory challenge goes, there will be more and more challenges for cause in terrorist or gangland trials and the limitations of the challenge for cause will be exposed. There will be pressure for it to be extended. we shall be sliding down the slippery slope to the crazy United States system of jury selection before we know it. How then will the jury system have been improved?
There is another reason. Trials only progress with the co-operation of the accused. They believe the system to be fair because they can challenge a juryman without reason. Deprive a defendant of that right and he will feel frustrated and railroaded by a court which, so he may think, has rigged the jury against him. If the police are allowed to vet the jury, that will be an active fear. For the sake of five minutes delay in court time, some trials will become much more difficult to conduct.
We must think longer and more clearly about the abolition of trial by jury in complex fraud cases than about anything else. I share most of the views that have been expressed by colleagues on both sides of the House against abolition and I shall not repeat them.
However, I do recognise the attractiveness of the proposal for special tribunals for they will speed up proceedings. A jury may very well understand a fraud trial, but the point is that it will take many days to explain the balance sheet and all the procedures so that they do understand it. A special tribunal would be able to work overnight, understand the case and dispatch the trial with greater speed. Furthermore, innocent people might well 1176 welcome specialist tribunals rather than a jury in a complex case. The standards of probity involved in City institutions might not be readily understood by the ordinary man in the street. Such defendants might prefer to have a special tribunal.
I would rather that juries stay as they are. If we do give way to pressure to have such tribunals may I suggest that the Government should set up a pilot scheme for such tribunals which should operate for two years. A defendant should have the option of such a tribunal. If it were shown to produce satisfactory results for innocent defendants, the objections to the abolition of the jury from those who are worried that it would produce a procedure weighted against the accused would be dispelled.
Finally, there is no point in catching fraudsters arid convicting them if there is no deterrent in the sentence they receive. Justice states:Sentences are far too lenient and the proceeds of crime are rarely recovered. Fraud, like other varieties of criminal conduct, will only diminish once those who perpetrate it realise that no profit is to be gained from it.
The Roskill report was not empowered to consider the consequences of conviction. Should we not at the very least be strengthening the powers of the court so that they may confiscate the defendant's property which could be reasonably attributable to the proceeds of fraud? That is what the Hodgson committee recommended and that is what the Government are currently implementing in its Drug Trafficking Offences Bill. We should do the same in fraud cases.
§ Mr. Richard Ottaway (Nottingham, North)
I shall be brief. May I draw the Home Secretary's attention to the section of the report which calls for organisation reform in combating fraud. The report rightly points out that there is great fragmentation in the co-ordination of the drive against criminal fraudsters.
The report calls for a single unified organisation which will detect, investigate, and prosecute under one roof. That is a recommendation that should be taken on board. However, if that course of action should prove to be impossible, I think that the report's recommendation that a fraud commission should be established to monitor the fight against fraud would result in co-ordination.
The difficulty of obtaining evidence from overseas is not dealt with in the report. I should like to float the idea of an international subpoena. At present getting witnesses from overseas is a costly, time-consuming business, but an international subpoena would have some merit.
One of the difficulties of this type of debate is that it attracts the hon. Members who are here tonight, all of whom are lawyers. This reminds me of a saying of Charles de Gaulle, "If you want to drain a swamp don't ask the frogs for their opinion." I am in a minority of one tonight. The Roskill report questioned whether it was appropriate to retain juries or whether there was another more suitable process. Would trials with a judge and assessors be fairer and shorter? I think trials would be shorter if one had a judge and assessors as illustrated by an example in the report. A trial under the Exchange Control Act 1947, conducted by the City magistrates, was considered by the counsel for both sides to have been three or four times shorter than it would otherwise have been. I was pleased to hear that the chairman of the Criminal Bar Association at a Back-Bench committee meeting also agreed that trials would be shorter if there was a judge and assessors. 1177 Whether fraud trials would be fairer without a jury is a question which causes me, as someone who is especially interested in these issues, the greatest difficulty. As the report states, about 2.2 million accused are tried each year by magistrates, and 90 per cent. of those who appear before magistrates plead guilty. That leaves about 200,000 a year who are tried by magistrates, having pleaded not guilty. We must bear in mind that magistrates have the power to impose fines of up to £50,000, and in some instances to impose one-year sentences of imprisonment. These facts illustrate that suitably qualified individuals can make judgments that are accepted by society. They illustrate also that juries are not enirely necessary.
Can juries determine honesty? They can do so only if they understand the questions that are before them. Reference has not been made to the report produced by the applied psychology unit of Cambridge, which comes to the conclusion that honesty is the most difficult question for juries to resolve in complex trials. It states:laymen experience difficulty in understanding and retaining unfamiliar and complex information over 20 days.
How do I, as someone who is particularly interested in civil liberties, face this difficult issue? If there is difficulty in determining honesty and a jury experiences problems with the complex issues that are before it, it is an even greater breach of an individual's right to be tried by 12 jurors who do not understand the evidence than to be tried by a tribunal, or judge and two assessors, who do. To my surprise, I find that I have no objection to trial by a tribunal of judge and two assessors.
I take on board the suggestion that a choice be given to defendants. Such a scheme has been put into effect in Canada, where I understand that the majority of defendants opt for trial by judge and assessors. If someone is innocent and he is charged with a commercial fraud, I am sure that he would far rather be tried by a judge and assessors, who understand completely all the issues with which they are presented, than by a jury which has only a hazy understanding of them.
When my right hon. Friend the Home Secretary considers the combined force of the lawyers' lobby in Parliament, which I believe is nearly 100 strong, and the weight of the Opposition, including the thunderous weight of the alliance, I believe that their opinions could force the Government into accepting the proposition that we cannot abandon jury trials, but I believe that a satisfactory compromise would be to give defendants a choice in the method of trial.
§ Mr. Kenneth Hind (Lancashire, West)
The Roskill report has many good features, but it contains one or two conclusions with which I disagree, and I wish briefly to explain why.
First, I urge my right hon. Friend the Home Secretary and his ministerial team to reject the idea of abolishing jury trial for serious fraud cases. There is no evidence that juries are failing in their duty to grasp the problems and the facts in a complex fraud trial. Jurors are probably the best people to grasp the concept of honesty or dishonesty.
The major problem that we are facing lies in the preparation of cases and the putting of them before the courts. In that context, the report deals fully and adequately with simplifying the issues so that a jury may 1178 deal with them more properly. The research of Baldwin and McConville in 1979 showed that none of the perverse verdicts that they recorded were associated with fraud cases. Frauds show no higher or lower levels of convictions or acquittals than any other type of case, and to argue that they are too complex to be dealt with by juries is to fail to understand that juries deal with cases equally complex day after day in our courts.
The second point is on the abolition of peremptory challenge to juries. I take the view that this is one thing that we should set aside. We should keep the peremptory challenge. In fraud cases, above all, it is better to retain it, for the simple reason that a juror who cannot read the oath is not able to grasp the complexities of the balance sheet or documentation. We will finish up going down the road of the ridiculous performance in the American courts, where they spend as much time empanelling the jury as they do in opening the case.
§ Mr. Hind
As my hon. and learned Friend the Member for Burton (Mr. Lawrence) says, probably a lot more.
I urge my hon. Friend the Home Secretary to be very careful when he tampers with the right of silence of a defendant as we know it. The disclosure of the defence should be done extremely carefully, and not until all the prosecution case is made available. I would undertake that only with a great deal of reservation, and it has to be very carefully thought out.
I welcome the fraud commission proposal. Perhaps my right hon. Friend will consider placing a duty upon auditors of public companies not only to audit the books but to report any irregularities to the police or to the DTI. This will lead to the introduction of further investigations in fraud cases.
Bearing those facts in mind, I think that this is a good report. I welcome it. It will lead to a much more cogent and sensible approach to the problems of fraud.
§ Mr. Nicholas Lyell (Mid-Bedfordshire)
There are so many good features of the Roskill report that I hope the Government will not be tempted to obscure their value or jeopardise their implementation by accepting, at least at this stage, the proposal to abolish juries for complex fraud cases.
The key features start with investigation. We must, in my view, establish a team of investigators, with proper qualifications, and a long-term career structure. The understanding of the patterns of behaviour in fraud, the kind of documentation to be mastered, the nature of the opportunities for fraud in different fields — insurance investment, commodity trading and the long firm fraud—can be mastered only by matching the expertise of the fraudster with equivalent experience in the investigator. The staff of such a corps of investigators must have time to build up a rapport with those responsible for self-regulation in the markets in question. This can be done only if they remain in their profession, not merely for tours of duty for two or three years, as so often happens at present, but for long periods equivalent to those undertaken by professional accountants, lawyers, tax inspectors or customs officials specialising in particular fields.
The Roskill report rightly refers to the vast amount of documentation to be found in some cases. I know from my 1179 own experience in large commercial cases that this need not be as daunting as it seems, provided that one is used to it and knows what to look for.
I have dwelt at some length on the investigation aspect because I believe that it is the single most important factor in solving our present problems. The creation of a team of the necessary size, with an adequate career structure, will involve changes in a number of Departments, including the DPP's department, the Department of Trade and Industry and the City and Metropolitan fraud squads.
We must recognise that many of the valuable recommendations in the Roskill report involve radical change, from which we must not shrink. This is where I fear that taking the juries away at the same time will make it much more difficult, and greatly increase the reluctance to implement those necessary changes.
I support the requirements for pleadings and disclosure of the defence, the requirement for the nature of the defence to be disclosed in writing after the prosecution case has also been set out in writing, and after proper legal advice, with the sanction of adverse comment by both prosecutor and judge if it is not properly done. I support the recommendations for changes in the committal proceedings procedures. There should be an opportunity, following a properly pleaded case by the prosecution, supported by sworn statements, to make a submission of no case to answer, but it should come before the trial judge at the preliminary hearings. We can consider the possibility of limited cross-examination, but I believe that the days of the long and turgid committal proceedings are past.
I support the changing of the rules of evidence so that there is a rebuttable presumption that documents, especially documents and bank books from overseas, can be treated as evidence of the truth of their contents unless the contrary is shown. These are all radical changes and they will take persuasion, as some of the careful speeches of Opposition Members have shown.
As for peremptory challenge, we should reflect for a moment. The new prosecution service is about to begin. It will give us an opportunity to study more carefully in practice how the system works. I think that we should be careful before abolishing peremptory challenge, but there might be a case for limiting its numbers in many-handed trials — trials with several defendants. I hope that we shall take the opportunity to see how it works for a year or two with the new prosecution service before we seek to make changes.
With regard to the proposal to abolish the jury in complex fraud cases, my plea is that we should stay our hand at least until we have had a chance to see how these other very proper but radical reforms, which I support, take effect. I do not believe that any hon. Member would deny that the right of jury trial for serious criminal offences is one of the fundamental constitutional rights of the British citizen. We should be extremely cautious about removing it. It is the right of the ordinary citizen, whatever his trade or calling, to be judged in serious criminal cases, not by experts, professionals and specialists, but by other ordinary citizens. They should be able to read and write, and I believe that we can overcome those problems almost within the present rules, but we should not move too rapidly to a system of judge and assessors alone.
I do not close my mind to the possibility of jury reform. We should think seriously about allowing a defendant to opt for a trial by a fraud tribunal, but before we ever think 1180 of abolishing the jury, we should first put right what we know is wrong. We should, for a period at least, put before our juries cases which have been properly investigated, have been properly prepared and are properly presented, with evidence properly admissible and summings-up properly carried out. We should then see whether the ordinary citizen, doing his duty as a juror as he sees fit, can match the standards that we are entitled to expect of him. I believe that he will. Unless he is shown to be unable to do so, we should not move any further at this stage.
§ Mr. John Morris (Aberavon)
I join in the tributes that have been paid to Lord Roskill and his committee. They have laboured long and hard. We should be grateful to them and all of those who man our great and important committees.
The report is strong on conclusions but, on some issues, exceedingly short on evidence. Argument cannot be replaced by mere assertion. Running through the report is the feeling that the committee did not believe much in the jury system, but believed that it was an anomaly. I suspect that the committee got off on the wrong foot with the invitation it tendered to give evidence. It said:The prevalent disquiet, whether justified or not, with the present system of jury trials for what have come to be called 'serious fraud cases' is well known and has led to the setting up of the Committee.
I am not aware of any such significant disquiet, but I am aware of deep disquiet about fraud itself and ensuring that the guilty are convicted. The people one talks to may not want to change the jury system, but they think that something is wrong because in the last few years there has been an enormous growth in fraud. All is not well in the City; the City itself is anxious to clear up the matter and to restore its good name. All is not well with many of the great financial institutions. The stench keeps coming to the surface.
My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) has mentioned the recent assessment of the Home Office that fraud losses are about £750 million a year. That has been unhappily the only growth industry in the last few years. That is what we have to face.
I welcome the broad thrust of the report. All hon. Members who have spoken will support any steps compatible with a sense of justice and fairness which would ensure that wrongdoers were brought speedily to justice. If criminals, particularly those who are now described by the new word "fraudsters", become more sophisticated, then, in the words of General Booth, "Why should the devil have all the best tunes?" I support in principle any measure to combat and prove the crime of fraud.
I read the words of the noble Lord Glenarthur in the debate in another place on Monday that the objectives were, first, justice, and, secondly, efficiency. One should not forget that justice comes first. The administration of justice should not be fragmented.
As regards investigation and prosecution, the real question is whether the Government—this applies to all Governments—have provided the resources to combat the prevalent crime of fraud or whether the Treasury gets away with its victories in saving candle ends. I welcome what the Home Secretary said tonight.
It is monstrous that the career structure of the police is such that usually it allows only three years for anyone to 1181 be part of a fraud squad, as though knowledge and expertise in that subject could be acquired on a short course. We have been told that one force is afraid to bring in another force because it would have to pay for the expertise it borrowed. That, too, is a matter of concern.
A Crown prosecuting service is being set up. Is not the real need to bring under the same roof all of the 46 or 47 organisations which have a responsibility for prosecuting fraud? Is it right that we should contemplate the Inland Revenue, Customs and Excise and the Department of Health and Social Security each having its own empire to defend? Why should not all three come under the roof of a new and enhanced Crown prosecuting service? The first step has been taken about the Fraud Investigation Group of which some of us have professional experience.
Both Lord Glenarthur and the Home Secretary announced the immediate establishment under the Chief Secretary of an examination of the need for recommendation 1 for a unified organisation. The present systems have grown like Topsy, and many of us have experience of internal Whitehall fighting. I wish the Chief Secretary well. I suspect that the genuine reason for setting up the inquiry is to have ammunition so that heads can be knocked together in the establishment of a unified service. I am not confident that in three years' time we shall have made great progress with the unified service, knowing how each empire will fight for its existence. However, it is a noble aim, and I hope that we succeed.
I welcome the proposal for more continuity of counsel and judges, and for the early employment of counsel. However, I must warn the House that we have divorced those who investigate in the police from those who are responsible for prosecuting. Therefore, although I welcome the early employment of counsel, I fear that their inclusion as part of an investigating team should be watched with care. Surely the function of counsel is to advise on evidence, to ensure that cul-de-sacs are not unnecessarily entered, and to separate the wheat from the chaff. We should not blind ourselves, unless we have ensured that counsel does not exceed that role, given what we have done and lauded regarding the generality of prosecutions.
I welcome the Lord Chancellor's reference of the difficulties in the substantive law to the Criminal Law Revision Committee. As, in practice, most serious fraud cases seem to be committed to the Crown court, I would welcome the end of committal proceedings in this area, especially if it results in the speedier bringing to trial of those charged. I am not absolutely sure whether the committee has gone the right way in rejecting a voluntary bill of indictment because whether it is done by a transfer certificate or a voluntary bill, it is important that the matter be considered judicially at some stage. I am confident that we can achieve that one way or the other, and assist in speeding up trials.
Pre-trial reviews lie at the heart both of saving money and of achieving greater efficiency. Some praise has been given to what has been done already, but I generally regard pre-trial reviews as puny. People who count in the subsequent trial do not attend, and judges are not given sufficient time to study the papers. Frequently they receive them only the night before. Unless one provides the resources, the judicial time and the financial inducement to ensure that at least some of those responsible for the 1182 subsequent trial attend, pre-trial reviews are almost a complete waste of time. I hope that the Treasury will take it to heart that if a pre-trial review is done properly, and if the resources are provided, money can be saved. I am confident of that. I find the present pre-trial reviews grotesque.
Those who draft indictments must adopt a robust approach, and limit the number of indictments, defendants and counts by severance, and the ground to be covered. When one knows that at the end of the day, whether one proves the whole area of wrongdoing, or only part of it to satisfy some of the counts, the sentence will not be substantially different, it is time for a more robust approach from those responsible for preparing cases and for skilled, experienced judges, who should be given time to prepare at the pre-trial stage, to ensure efficiency and not to lose any sense of justice. If we can get the pre-trial review right and can provide the resources then we will be well on the way towards achieving a great deal of the report's aims.
I mention quickly the rules of evidence. Here, in an age when copying documents is part and parcel of our daily lives, we should bring up to date our rules of evidence. Then I would welcome all that can be done by way of flexibility in presenting the case, whether it be oral, written, or visual aids. These are part of the ordinary scene, and juries should be given every assistance in that way.
I am concerned about the proposal with respect to the duty of the defence to disclose its case. It is difficult to see how the principle of the onus of proof remaining on the Crown can be maintained inviolate, and also the defendant's right of silence. The Crown will concentrate not on proving its case, but on demolishing the disclosed defence.
I fear also that the recommendation regarding a jury and its abolition is a stalking horse compared with the real aim of breaching the right of silence, which many have been trying to do since at least 1972, and have failed so far.
I believe that this matter is fundamental. We should not throw the baby out with the bath water, because it would mean a fundamental change in our trials, and be the first serious breach of the right of silence.
I would not lose a great deal of sleep on peremptory challenges. I fear we would develop in its place the American system of showing cause, and instead of the five minutes that are now lost on challenges we would soon have a growth industry of five days. I find it difficult to understand how this has come within the purview of the report.
It is proposed to abolish juries in complex fraud cases. The jury is the best instrument so far devised over the centuries to examine and reach a conclusion on the issue of honesty. I would prefer to be judged by 12 randomly selected persons rather than by two or three wise men conditioned by the standards of the well-heeled world from which they come. The superior courts believe that sometimes juries have difficulties and they have to spell out the definitions of dishonesty. Juries reach their conclusions on their own gut feelings.
There is not time to put all the arguments against the abolition of juries, but I shall quote Blackstone's wise words in volume four of his "Commentaries on the Laws of England". He said:But the founders of the English law have, with excellent forecast, contrived that no man should be called to answer for 1183 any serious crime … and the truth of every accusation … should be confirmed by the unanimous suffrage of his equals and neighbours, indifferently chosen and superior to all suspicion. So that the liberties of England cannot but subsist so long as this palladium remains sacred and inviolate, not only from open attacks, which none will be so hardy as to make"—he had not thought of Roskill then—but also from all secret machinations, which may sap and undermine it, by introducing new and arbitrary methods of trial … And however convenient that may appear at first, as doubtless all arbitrary powers, well executed, are the most convenient, yet let it be remembered that delays and a little inconvenience in the forms of justice are the price that all free nations must pay for their liberty in more substantial matters…and that though begun in trifles the precedent may gradually increase and spread to the utter disease of juries".Blackstone was right then, and he would be right now. I hope that the Government will pause and consider.
§ The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor)
My right hon. Friend the Home Secretary said in opening the debate that the Government were resolved to act on the recommendations of the Roskill report, but that the precise form of action would depend on a number of factors, not least what the House had to say. We have had a marvellously compact debate, in which many hon. Members have been able to give their views. We shall certainly take all those views seriously even though, in deference to the need to have as many contributions as possible, I shall not be able to answer all the points.
We are agreed on two things. First, fraud is a serious matter about which more must be done. If one needed any proof, that will be provided in a study soon to be published which was partly funded by the Home Office and carried out by Dr. Levi at University college, Cardiff. It reveals, among a number of interesting points, that since 1980 recorded commercial fraud has increased by an average of 5 per cent. annually and that commercial fraud reported to the London fraud squad represents almost three times the total cost of all property crime in London, and in 1984 accounted for £687 million.
Secondly, I think we are all agreed that the Roskill report is a major achievement and should be acted upon. The Government are resolved to do that. Inevitably, although what happens in court is not the only element—nor necessarily the most important element—in Lord Roskill's report, most attention has focused on what happens in court in fraud trials. I shall therefore consider that aspect.
I agree with my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) that what Roskill proposed was nothing less than a fundamental overhaul of courtroom procedure. That is certainly right and welcome. I am glad that most of the committee's detailed recommendations to improve and speed up our trial system commend themselves to both sides of the House.
Inevitably, controversy has centred on two proposals: first, the fraud trial tribunal; and, secondly, the pre-trial review procedure. I shall deal with the second proposal first. My right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), in what I think I can say with the assent of the House was a typically wise speech, said that our present pre-trial procedure needed firming up. Other hon. Members, especially those with experience of the courts, pointed out that the pre-trial review procedure, which has no statutory basis, is treated as a warm-up in 1184 which understudies participate and is not taken to be as serious an element in the trial as Lord Roskill, as most hon. Members who have spoken, and as the judges, think it should be.
In a recent judgment in the case of Hutchinson, Lord Justice Watkins said:The review"—meaning, of course, the pre-trial review—is now in common usage and has proved to be, when properly conducted, and when prosecution and defence co-operate to the maximum expectation, of great assistance to the court and to the administration. It assists in highlighting the issues involved in a trial and has the effect quite often of shortening the length of it. But it does not have the force of law. It is not recognised by statute or regulation … Many judges and practitioners would welcome the review having the force of law.Those sentiments have been reinforced tonight.
Some hon. Members have spoken against the recommendations, including Opposition Front Bench spokesmen and the hon. Member for St. Helens, South (Mr. Bermingham). However, as my right hon. and learned Friend the Member for Warrington, South pointed out, the alibi notice provides that a defendant is obliged to serve notice of an alibi on the prosecution. If he does not do so, the alibi may not normally be admitted at the trial. Furthermore, even if, relying on the right to silence, a defendant declines to give evidence, hé has to put his case to prosecution witnesses.
All that is being said for the pre-trial review is that the defendant should put his case at an earlier stage, but after the prosecution has disclosed its case to him. Under section 81 of the Police and Criminal Evidence Act 1984, the defence must also give advance notice of the substance of expert evidence. Those who dissent from this proposition cannot have it both ways. By all means be opposed to the fraud trial tribunal and to the removal of juries from serious fraud cases, but if juries are to be retained in complicated fraud cases, let us at least do the maximum that we possibly can to ensure that the issues are capable of being put clearly and of being understood.
The way that this can best be achieved is by having a proper pre-trial review, when what can be agreed is agreed and put out of the way, and when what cannot be agreed is clearly understood, so that the prosecution can make the statement that Lord Roskill recommends. Then everybody will know where he is. If the purpose of juries is to determine honesty, they must be given a fair chance to do so by having the issues put squarely before them.
I do not wish to satirise the Opposition Front Bench, but if their agreement with Roskill comes down only to the easy bits concerning more secretarial facilities for judges, that is a cop-out. If the Opposition oppose the fraud trial tribunal, they must say clearly what they mean. We must improve the procedure in fraud cases so that the major and farsighted reform of the law of evidence proposed by Roskill can be implemented. It will then be easier to reject the fraud trial tribunal option.
The Government have an open mind; no decision has been taken. However, it is interesting to note that, after my right hon. Friend the Home Secretary had invited the House to give its opinion, 12 good men and true delivered their verdict on the fraud trial tribunal. Although there may have been equivocation — unusual for him — in the advice given by my hon. and learned Friend for Burton (Mr. Lawrence), they delivered a majority verdict of 11 to 1 against the fraud trial tribunal. Even if that jury was heavily vetted in favour of paid-up members of the 1185 lawyers' trade union, nevertheless the message was clear. I appreciated the Welsh eloquence of the right hon. and learned Member for Aberavon (Mr. Morris) who defended juries. He reminded me of that other great Welsh lawyer, Lord Elwyn-Jones, in whose chambers I began my unprepossessing legal career. When he was called upon to explain the number of acquittals in Wales he said, "Well, Welsh juries are against crime, but they are not dogmatic about it."
Most of the attention has been focused upon what happens in court, but I suspect that a great deal of the real interest lies in what happens before one reaches court. Therefore, we must ensure that we get better at finding out when fraud is taking place. That is not easy, because, by its nature, fraud is covert. When we investigate fraud, we must ensure that arrangements are made that will have the maximum chance of identifying the evidence, and that it is possible to sift through it in such a way that a case can be brought to bear against malefactors. It is not without note, therefore, that Roskill made major recommendations about a unified organisation. Those recommendations have serious implications, not least because, as the right hon. and learned Member for Aberavon reminded us, the House has taken steps to separate investigation from prosecution. Any backtracking will require serious consideration. Indeed, these questions will be thoroughly considered by a committee chaired by my right hon. Friend the Chief Secretary to the Treasury.
We fully acknowledge that more resources are needed. One hundred and ninety five new posts at the Department of Trade and Industry have been created. There are more accountants for the fraud investigation group, which is itself new. We take Roskill seriously, as the House will soon see.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.