§ 2.55 p.m.
§ The Lord Chancellor (Lord Hailsham of Saint Marylebone)
My Lords, we move, I hope, from the ridiculous to the sublime, and I rise to move the Motion standing in my name on the Order Paper. Before I do so, may I say what a pleasure it is to note from the list of expectant speakers that my noble and learned friend Lord Roskill himself is to take part in the debate; and I also look forward with eager anticipation to the maiden speech of the noble and learned Lord, Lord Griffiths, and to the maiden speech 8 of the noble Earl, Lord Buchan, who I suppose is a collateral descendant of my noble and learned predecessor, Lord Erskine.
We discussed the remarkable document which forms the subject matter of this debate briefly on the 14th January when I repeated in this House the Home Secretary's statement on its publication. On that occasion I described the report as one of the most masterly, important and well written documents which I have read in recent years.
I have had no occasion to regret, and I have no desire to revise, that appreciation. All the same, the form of this Motion, which is to take note, means exactly what it says. It means first of all that if I have anything to do with it the Government are determined to take action, but that the contents of the report and the detail of the action are wide open for discussion today. My predecessor, the noble Lord, Lord Campbell, once said that law reform is by consent or not at all. It therefore follows that unless the results of this discussion and that which follows in another place are to produce a firm consensus not confined to the Government as such, both as to the necessity for action and the form which action should take, like so many other reports the result of this one will be less than the minimum necessary.
I therefore begin with a plea, which I made in another form on the 14th January, that whilst everyone will be quite uninhibited in criticism or in support, no one will adopt stances from which it is impossible to resile with honour, and that everyone, after expressing either his or her opinions or reservations, will take back for a period of self-questioning the opinions of others. I tried to express the view that anyone reading this report ought to realise that its real underlying message is that we are trying to operate a ramshackle and obsolete system of trial in a situation to which it is not readily adapted, and that to remedy that situation we, the public and the profession, must be prepared to examine with a detached and coldly appraising eye each his own herd of sacred cows and ask himself whether they are still capable of yielding any holy milk.
I was greatly encouraged, at least in part, by the reception given to the report by the noble and learned Lord, Lord Elwyn-Jones, and by the noble Lord, Lord Wigoder, from the Front Benches of their respective parties. Indeed my only criticism was that I thought that each of them might have been too cautiously conservative in his approach.
I was vastly encouraged in particular by the quotations which were made by the noble and learned Lord, Lord Elwyn-Jones, from the report itself. He had got the message and he had got it right:All the available evidence indicates that, in the United Kingdom, fraud is a growth industry … Fraud is posing a threat to London as a financial centre".He went on to quote:The public no longer believes that the legal system in England and Wales is capable of bringing the perpetrators of serious frauds expeditiously and effectively to book. The overwhelming weight of the evidence … suggests that the public is right … the present legal system is archaic, cumbersome and unreliable.At every stage, during investigation, preparation, committal, pre-trial review and trial, the present arrangements offer an open invitation to blatant delay and abuse … The largest and most cleverly executed crimes escape unpunished …".9 The noble and learned Lord, again quoting the report, said quite rightly and, if I may say so, sternly to the Government:If the Government cherishes the vision of an 'equity owning democracy', then it also faces an inescapable duty to ensure that financial markets are honestly managed and that transgressors … are swiftly and effectively discouraged, convicted and punished".That is a challenge by the report and by the noble and learned Lord which I happily accept on behalf of the Government, but at the same time I think I am entitled to say to the Opposition, the Cross-Benches, the profession and the Bishops' Benches, too, that this is not going to be a comfortable matter for any of us. It will involve serious expenditure, controversial decisions and a willingness to legislate, which can only be done by a wholehearted willingness to support whatever government may be in power to put down the crime of fraud wherever it is found, remembering only that the fundamental rule of criminal law is to convict the guilty and acquit the innocent, so far as it can be done, without destroying the other fundamental rule, that the burden of proving a case rests on the prosecution and that we must by no means buy temporary popularity for vigorous and even dramatic action at the cost of convicting innocent men or women, for, if there is one thing worse than not convicting fraud, it would be the belief that our system of justice could not be relied on to acquit the innocent.
Your Lordships will notice that I mentioned the Bishops' Benches. I had originally intended to refer to reports by the most reverend Primate the Archbishop of York, of which I gave him notice. I was going to make a comment that he had struck a false note when he made in this very connection what both The Times and the Daily Telegraph referred to as a wide-ranging attack on "Britain's enterprise" society. However, he courteously replied to me with two copies of his interview and one of his excellent Christmas sermon saying that he had been largely misreported. I therefore refer only to the interpretation of The Times and the Daily Telegraph of what he was alleged, perhaps unjustly, to have said.
The more one believes in private enterprise, the more important it becomes to put down fraud. Private enterprise is based on confidence. If men do not trust one another they cannot trade; and, as the Roskill Report rightly' points out in the passages I have quoted, confidence is destroyed if fraud is allowed to succeed unpunished. Indeed, as I have pointed out, the report went on to say that unpunished fraud is a threat to London and therefore to the country as a financial centre. Private enterprise remains about confidence and about credit, and that means mutual trust. If one undermines confidence, one undermines private enterprise; and we cannot have confidence where fraud goes undetected or unpunished.
Nor must we forget, for those who are less enthusiastic than I about private enterprise, that the Revenue, and therefore the taxpayer, is frequently made the victim of some of the most ingenious and profitable fraud. So that in this enterprise of putting down fraud there should be no party politics at all and there is no conflict between the public and private sectors. It is the common interest of us all to pursue this matter to the end.
It is, I think, not in the interest of the debate that I should at this stage discuss in detail the Government's 10 attitude to individual recommendations. Although my noble friend Lord Glenarthur will be fleshing out some of the detail at the end of the debate, I do not think that it would be right for me to do so now. It is clear, however, that on the most conservative view there are very important implications in resource terms both in terms of judicial power and other manpower resources. If we are serious, we must make these resources available to the maximum of our ability. In the case of judges, however, it is clear that there is a further limitation on me which does not depend on government decision; that is, the availability of manpower of adequate authority and quality. On the rest of the field the Home Secretary has already indicated that the Department of Trade and Industry is recruiting nearly 200 new staff over the next two years, and that nine extra lawyers with supporting staff are being added to the department of the Director of Public Prosecutions.
I hope the House will recognise these as fair indications of our seriousness of purpose, and will also bear in mind that this is also established by the mere fact of the Government setting up this distinguished committee, with Lord Roskill at its head, and the numerous other steps which have been taken during this Parliament and its predecessor to strengthen our powers in this field. In these I include the Companies Act 1980, Professor Gower's work in the field of investor protection, the establishment of the Fraud Investigation Group, the Insolvency Act and the current Financial Services Bill.
But I think now I have the right to raise certain fundamental questions with members of my own profession, the press and the public. The Roskill Report frankly recognises that you cannot reorganise the law of fraud without there being, in the end, repercussions on the general criminal law and procedure of England and Scotland. How far is that view justified? Personally I welcome that approach. In the first place, as I indicated on 14th January, I think the committee has established that crimes of fraud differ from "ordinary" crimes like riot, theft, burglary, rape or murder. This is not because crimes against property differ relevantly in character from crimes against the state or the person. That would be foolish thinking. As the committee points out, it is because most crimes burst into the open by overt action, while fraud thrives best in the dark, by concealment, by falsification of accounts, in complex games played with a Russian doll system of limited liability companies and by skilful use of foreign systems of law, such as operate in non-extradition countries or countries with stringent banking laws forbidding the disclosure of necessary information.
But there is another reason why I welcome this approach. In criminal law it is difficult to experiment with real cases. The result is its extraordinary rigidity and conservatism. Each time a change is proposed we are faced with the perfectly realistic proposition that human liberty and civic rights are involved, and so they are. But have we ever asked ourselves how many of these liberties and rights were evolved to deal with dangers which no longer exist? There is the hearsay rule, for instance. Prosecutions were once often in private hands and prisoners could not give evidence on their own behalf, as they could not until 1898. And, in most serious cases, in earlier days, prisoners were 11 denied the assistance of counsel or solicitors even when they could pay for them, when there was no disciplined police force in existence, no appeal in criminal cases (not effectively until 1907. although, of course, before that, there was the Court of Crown Cases Reserved), no prison rules, no public education at all, and, of course, until about 1962, no legal aid. I welcome this opportunity myself to deal with fraud as a special case, not in spite of the fact but because of the fact that, in dealing with it separately, we may gain experience that may prove some day, long after perhaps I have gone, valuable in another field.
As I have said, this might apply to the hearsay and best evidence rules which, during my lifetime at the Bar, have virtually disappeared in civil law. And, although, of course, no one would suggest abolition of the right of silence, surely the report is correct in questioning whether an efficient system does not demand a greater degree of candour between both sides, if they are properly represented, as to the true nature of fact to be determined by the jury when the time for trial arrives. Have we ever asked ourselves the extent to which an artificial and excessively rigid system can operate against the administration of justice, both in the interests of the defence as well as of the prosecution?
Surely, I was right to draw attention to the passage in the report which says:We have no doubt that most ordinary jurors experience grave difficulties in following the arguments and retaining in their minds all the essential points at issue particularly in a long hearing of a complex character. This creates the serious risk either that the jury will acquit the defendant because they have not understood the evidence or will convict him because they mistakenly think they have understood it when they have in fact done little more than applied the maxim there's no smoke without fire.In other words, I ask the question point blank: is the fact that an inefficient and archaic system is unfair to the prosecution any guarantee at all that it is a protection to the innocent?
Then, there is the question of delay which is a recurring theme in the report—delay in investigation, delay in committal, delay in prolongation of the hearing and, cognate though not identical with this, the difficulty of appealing against an unsatisfactory verdict when ex hypothesi no reasons are given. Is it obvious that because such things make it more difficult for the prosecution to secure a conviction in the guilty cases, they necessarily make it easier for an innocent man to secure an acquittal? We know, alas, that despite all our wills to the contrary, there have been cases of conviction of the innocent. We must be careful to see that, so far as human ingenuity can secure it, these do not occur again. May not inefficiency be an enemy of justice in the interest of both sides by making the result of a trial more the plaything of chance than a matter of certainty? Our system depends on oral testimony. Delay blunts the memory and reduces the reliability of witnesses. But this may operate against innocent defendants as well as against the successful prosecution of the guilty.
In this connection, I must also raise the question implicit as part of the report, and not at all forgetting and not in the least discounting the powerful dissentient opinion of Walter Merricks, regarding the jury itself. I myself regard the jury as one of the 12 palladia of our liberties. They try many serious crimes to general public satisfaction. But this may not be so in every kind of case. In some cases known to us all—the more trivial—the speed and informality of the magistrates' court is clearly preferable. Are we sure that there are not other cases at the other end of the spectrum? In a case that, to everyone's knowledge, is going to last six months, or even three months, what sort of a random jury can be obtained who can sit day to day all the time without being excused from service? And how many people is it fair to ask to perform the function of a jury in such a case even if we abolish, as the report suggests, peremptory challenge and the right of the Crown to stand by, given that jury service is compulsory, continuous and unpaid?
I sometimes wonder whether Members of another place and ourselves would be quite so vociferous in support of jury trials, and members of the profession itself be quite so vociferous in support of jury trials, were they themselves liable to be called up compulsorily for jury service. I beg the House not to approach this difficult question in an atmosphere of religious awe, but simply to try and answer the question as it would be inclined to attempt the answer to any other difficult and serious matter connected with justice and with law. Remember, we are not engaged in some kind of ritual dance or tribal ceremony, or a fox hunt with men in red coats and properly selected hounds and ritual rules! We are dealing with the lives and liberties of men and women and the vital interests of society.
I emphasise once more that it is no part of my intention to foreclose this debate by announcing premature conclusions by the Government which can only serve to cause others to stand on premature and dogmatic conclusions of a different kind. There is at this stage only one point on which I should like to supplement or amplify what my right honourable friend the Home Secretary said on 14th January. That relates to Recommendation 13 of the report, which relates to the substantive law of fraud and talks about an offence that has fraud as its label or designation.
The point which the Criminal Law Revision Committee is to be asked urgently to examine is the problem, in itself narrow, but also extremely important, relating to the law of conspiracy, thrown up by your Lordships' judicial decision in the case known by the name of Ayres about conspiracy to defraud. The more complex question as to whether a new statutory offence labelled fraud should be created looks to me much more like a question for the Law Commission than for the Criminal Law Revision Committee. The examination of that question seems to me likely to take a great deal more time than the Ayres point to elucidate, or even the legislation of a different kind that we are likely to need in the near future. I do not think that the answer to it will be contained in the earlier legislation which will be necessary on most other aspects of the report. My right honourable friend and my own department will be in touch with the Law Commission on the other aspects of reform of the substantive law.
I look forward greatly to the outcome of this debate, and to the wider debate in another place and in the public domain that will surely follow. I ask only that we should start with open minds. Do not the laws of 13 evidence need reform? In complex frauds, especially those which have been the subject of inspection reports under the Companies Acts, do old-style committals with their delays, their longhand depositions and so on, serve any contemporary useful purpose? Do we accept the need, which the report stresses at great length, for a more thorough pre-trial preparatory hearing with proper counsel and a judge devoted to the case, each properly remunerated? Is the present system of jejune indictments, without the clearer definitions of issue which remain at present in vogue, in the interests of the prosecution, or the defence or the administration of justice? How far is a legally represented defendant in a complex fraud with a defence entitled to conceal that defence for tactical reasons with a view to taking the prosecution by surprise? Is it in the interests of an innocent defendant to do so? If he does so, are the present rules relating to the right of the prosecution or the court to comment really in the interests of justice?
In all these cases I cannot conceal my belief that the criminal process is not a game, a sport or a ritual dance. Its purpose is to convict the guilty, acquit the innocent, and to treat as innocent those who are not proved to be guilty. There are, of course, matters where facts logically probative have an emotional impact too large to be freely admissible. An obvious case of course is the case of previous convictions. There are also methods of interrogation too unacceptable to be permitted even where they yield logically probative evidence. There are areas in which the criminal process in fraud must have an ultimate impact on the criminal process on crime generally. But that time is not yet come.
We must not experiment with human rights. But we are not merely bound to attempt innovation in particular fields. We must see how the innovation works if we introduce it. Nevertheless, can we not at the end of the twentieth century agree that the general rule should be that what is logically probative should be admissible in evidence, and reliability and weight should be for the jury rather than the judge? I mean, of course, a properly directed jury. And can we not agree that what is time-saving and efficient is as a general rule a better guide to truth in the interests both of prosecution and defence than what is artificially rigid, unnecessarily protracted, or obviously designed to meet situations and dangers which no longer exist? My Lords, I fear that I have already outstayed my welcome. I beg to move.
§ Moved, That this House takes note of the Report of the Fraud Trials Committee.—(The Lord Chancellor.)
§ 3.23 p.m.
§ Lord Elwyn-Jones
My Lords, I am most happy to join with the noble and learned Lord in commending the vigour, the quality and the masterly nature of the Roskill Report. As I shall indicate in my observations, I do not agree with all of it but that will probably be no surprise to anyone. I am also happy to join the noble and learned Lord in stressing his and my awareness of the extent of the challenge of fraud and dishonesty to our commercial life in this country. Yesterday the press reported that a study commissioned by the Home Office into the level of fraud in the United Kingdom in its financial community is believed to 14 have estimated the level of losses at around £750 million a year. It is an enormous sum. It is an appalling indictment.
The Roskill Committee was not charged with the responsibility of examining how it is that in the last few years this deeply disturbing state of affairs should have come about, and how it comes to pass that fraud and fraudsmen should proliferate so greatly and so effectively. Perhaps it is high time that those questions were examined and tackled. I fear it is the case that the Roskill Report indicates that a concerted drive against the fraudsman was long overdue.
As far back as 1978 a working party was established by my noble and learned friend the then Attorney-General, Lord Silkin—I am glad to see he is going to speak today—to review the arrangements for the investigation and prosecution of fraud, and to examine the role and co-ordination between each of the authorities with responsibilities in this field.
It was apparently, however, not until 2nd January 1985 that the permanent fraud investigation group arrangements came into being within the department of the Director of Public Prosecution. Changes in the method of investigation, as the report points out, have been brought about very slowly. The report adds the fact that even now only two departments—the DPP and the DTI—are directly involved in these arrangements, that the police retain their independence, and that the Inland Revenue and Customs and Excise remain outside the arrangements. They conclude that these are all matters of concern. The House may like to learn from the Lord Chancellor whether any progress has been made or is being made in regard to these matters of concern.
The committee stressed that the need for an organisation responsible for all of the functions of detection, investigation and prosecution of serious fraud ought to be looked at afresh, and that such an inquiry should be set in hand forthwith. I appreciate that the report has not been in the hands of the Lord Chancellor for very long. But I hope that I may be allowed to ask what steps are being taken to put that matter in hand, and what is contemplated.
The number of bodies who are presently involved in different areas of fraud investigation, and the disparity between their functions and powers, seem to reflect no more than a piecemeal approach to this problem. The appearance of the report was indeed most timely in regard to the state of affairs which they discovered. The committee make valuable proposals for an independent monitoring body—the fraud commission they call it—to study and advise from year to year on the efficiency with which fraud cases are conducted. They propose that the fraud commission should make an annual report which should be published. If I may say so, that is a suggestion with which I wholeheartedly agree. Perhaps when the noble and learned Lord and Lord Chancellor has an opportunity of hearing what I am saying, he will indicate whether he agrees, first with the view on the founding of the fraud commission; and secondly, with the suggestion that it should make an annual report.
The committee in their massive work approached their task of considering how the conduct of criminal proceedings arising from fraud can be improved methodically, as one would expect from so expert and 15 experienced a membership. They considered each stage in the processing of a suspected fraud from the time when it first comes to the attention of the authority to its ultimate disposal. They made various recommendations relating to each stage. Many—indeed, I venture to think the majority—are uncontroversial, and many are beneficial. I shall not of course attempt to cover the ground. But happily the expert list of noble and learned Lords, and indeed noble Lords who are to follow me indicates that these matters will be pretty thoroughly exposed and discussed during the course of our debate.
May I ask one question at the beginning of the process of studying the covering of the ground from discovery of the fraud to its ultimate treatment in court? As to the substantive law of fraud itself, this has been most usefully examined, and the problems helpfully highlighted by the committee. They recommend that those questions of law should be referred to the Law Commission. Perhaps the noble and learned Lord will give an indication as to whether that is contemplated. Indeed, perhaps the mere fact that it is on the record of the report may result in the Law Commission acting in that regard anyway.
To begin at the beginning, the report recommends that committal proceedings should be dispensed with. I personally do not think that committal proceedings add very much to the due administration of justice, whereas they undoubtedly cause considerable delay. It may well be that they achieve little which could not be achieved in the Crown Court itself However, the report's proposal that in cases of complex fraud the prosecution should be able to issue a transfer certificate which circumvents the committal proceedings and brings the matter into the jurisdiction of the Crown Court without reference to the courts and without possibility of challenge by the defence, will require most careful examination if and when we see that proposal in a Bill. We shall need to consider whether the existing procedure for preferment of a voluntary bill of indictment may not indeed be preferable.
The report's proposals regarding pre-trial proceedings and pre-trial reviews are, I venture to think, very important in order to achieve the smooth running of the trial. I welcome the proposal that the learned judge should be empowered to direct the preparation and use of virtual, or rather I should say "visual" aids for the trial (I hope that they are also virtual aids for the trial) as the proceedings continue.
However, there is one proposal which I submit will need most careful consideration before we make it part of our law. I refer to Recommendations 58 and 59 of the report. Recommendation 58 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".Recommendation 59 says:If a defendant fails to disclose his defence in advance of the trial the following sanctions should be available:Recommendations 64 and 65 are also relevant and important in this field. Recommendation 64 says:
- (i) 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.
- (ii) Where the failure to make prior disclosure of the defence has unnecessarily prolonged the trial, the sanction of costs should be available".The prosecution should be required to serve a notice on the defence requesting admissions of facts. The defence should be required to serve a counter-notice stating which facts are admitted and which are not giving their reasons".Recommendation 65 says:Failure to make admissions of fact which are not the subject of challenge at the trial and which a jury might after hearing all the evidence think any reasonable innocent person would have been ready to make should be capable of attracting comment by the judge and the prosecution".The question which I venture to raise is this. Do not these proposals challenge a fundamental principle of our criminal law; namely, that a man shall be presumed innocent until proved guilty? That principle, which is now embodied in Article 6(2) of the European Convention on Human Rights, has two consequences. First, it is for the prosecution to prove their case. The Crown, if it seeks to accuse an individual, hears the whole onus of proof of every part of its case. Secondly, the defendant has no obligation to assist the prosecution. In my submission, the report dismisses those principles a little too readily. I venture to suggest—I hope without impertinence—that perhaps even the noble and learned Lord the Lord Chancellor did the same.
Paragraph 5.25 of the report reads:If society wishes to see the successful prosecution of those who are believed to have swindled large numbers of people, whether large investors or small investors, out of their assets, it must be prepared to stop the use of these ancient rules of evidence".As if, my Lords, that dismisses them. The difficulty of proving a complex fraud case is recognised. However, I submit that that cannot justify shifting the onus of proof on to the defendant or relaxing the requirements of proof.
§ The Lord Chancellor
My Lords, I do not want to interrupt the noble and learned Lord, but if he reads in Hansard what I said, he will acquit me completely of seeking to displace the onus of proof. However, I do not wish to interrupt him further.
§ Lord Elwyn-Jones
My Lords. I hope that I also may be allowed to continue with what I was endeavouring to submit to the House. I detected in the noble and learned Lord's speech a visible shifting of the onus from the prosecution to the defence. However, we shall each look at what we have said in each other's words and it is for their Lordships to hear and to listen to what we respectively have to say. I hope that, without too much sense of religious awe—as though that has become a new term of abuse in this House—and without being too dogmatic, the matters which I am endeavouring to raise will be given such consideration as they deserve. The House will appreciate the difficulty of proving a complex fraud case. I stress that its complexity does not or should not affect the relaxation of the requirements of proof. As regards that matter we shall have to wait to see the precise language of any Bill which seeks to give effect to this matter and we shall continue our argument further in the light of the printed word.
17 As Justice has submitted, even correct convictions secured by unfair means undermine faith in law and justice. Undermining that faith is too high a price to pay for getting a few more convictions for fraud.
In practice I ask: is it not the case that even now the acquittal rate in respect of fraud trials is no greater—in fact it is actually less—than for trials in general? It is of course right that, so far as possible, all formal or non-contentious matters should be disposed of by agreement so that time is not wasted on formal and unnecessary evidence which should be dealt with at the proposed preparatory hearings.
It is in regard to what is perhaps the most fundamental of the Roskill Committee's recommendations—namely, the abolition of trial by jury in complex fraud cases—that the greatest controversy will inevitably arise. It is fair and right to say that the proposal will only bite on complex fraud cases. As the report states:Despite all its shortcomings, we find trial by jury an acceptable procedure for the vast majority of cases".It is for what are described as "complex fraud cases" falling within the stated guidelines, that the committee proposes that a different tribunal is required which it calls the "Fraud Tribunal", consisting of a judge sitting with two lay members.
The report concedes that it is not possible to give a precise definition of a complex fraud case. They also say:We have not been able to obtain accurate evidence whether there have been many doubtful acquittals or convictions in fraud cases or whether many retrials have been caused by a failure to secure jury agreement".Then they say:There is no accurate evidence which we have been able to obtain to suggest that there has been a higher proportion of acquittals in complex fraud cases than in [ordinary] fraud cases or other criminal cases generally".Mr. Merricks, in his notable note of dissent, said this:Most judges and lawyers who made submissions to us thought that juries mostly reached the right result, or at least an understandable result".He adds:we have only anecdotal and second hand evidence on the central question at issue. Even that evidence, however, did not point unambiguously towards the conclusion that jurors cannot and do not understand fraud cases".That was Mr. Merricks' analysis of the evidence that the committee heard. It is for us to consider what weight to attach to it.
On the broad constitutional question raised by the proposed abolition of the right to trial by jury, I agree with the view of the noble and learned Lord, Lord Devlin, that the right to jury 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 by a jury verdict.
I submit that only in the last resort should jury trial be abolished after all other methods of reform have been tried and found wanting. I submit that at the very least we should await the outcome of the implementation of the various reforms Roskill recommends before taking any such highly controversial step. For my part, I have found most impressive the four 18 arguments which the Roskill report fairly sets out in paragraph 8.9 of the report, all tending to support the status quo.
On the report's proposal to abolish the defendant's right of peremptory challenge of jurors and the prosecution's right to stand by for the Crown, I would prefer to await the outcome of the investigation by the Crown prosecution service of the use of challenges before coming to a conclusion on that matter. I have to confess that I myself only once used the right of peremptory challenge and that was at Carmarthen Assizes. It proved to be a grave error. The juror I challenged proved to be the next-door neighbour of my sister living in Llanelli. It took quite a long time to restore neighbourly relations, and it did me no good. My client was convicted of murder and, I regret to say, duly hanged. My experience does not point to the great merit of challenges.
I conclude by saying that clearly the Roskill report marks an important landmark in the prosecution system. It also points out in the summary at paragraph 4:In many instances the reforms we propose could easily be argued to be of benefit to a wider range of criminal cases.Whether this is by way of warning or encouragement, I know not. Does that go to the abolition of the jury in a wider range of cases? We shall have to wait and see, my Lords.
I conclude by apologising again for taking so much time. If I continue I shall incur the reproach to counsel who apologised to Lord Chief Justice Cockburn for taking so much time:Time! You have exhausted time, and encroached upon eternity.
§ 3.45 p.m.
§ Lord Wigoder
My Lords, in a debate of this nature it is an inevitable formality that I should begin, on behalf of my noble friends, by expressing our gratitude to the noble and learned Lord, Lord Roskill, the chairman of the committee, to its distinguished members and to its staff for the extremely lucid, wide-ranging, and helpful report which they have produced. On this occasion it is in fact not a formality, it is an expression of our deepest congratulations to the noble and learned Lord for a document which I certainly regard as one of the most constructive and profound reports on the criminal law that I have ever had the pleasure of reading. I believe that it will make a real contribution to the development of that law in the course of the next few years.
It is inevitable that among all the recommendations the ones that will attract the most attention from the general public and the media are those connected with juries. For some extraordinary reason one only has to mention juries to be quite sure that the public appetite is whetted. Perhaps therefore I may dispose at the beginning of my observations of the two principal recommendations that concern juries before going on to what I think are much more important matters in this document.
As to the proposal that the right of peremptory challenge by both the prosecution and the defence should be abolished, may I say that I have a certain amount of sympathy for that proposal? I have always thought it strange that the right of the prosecution and 19 the defence to seek to rig the jury is regarded in some strange way as being one of our fundamental human freedoms. I agree too with what the noble and learned Lord, Lord Elwyn-Jones, said, although I cannot boast anyone living in Llanelli who has a neighbour who has ever been on a jury. I have certainly no reason to believe that I have ever indulged in any peremptory challenge which has had the slightest effect on the verdict.
I add, as my final observation on this matter, that I am a little sceptical about the argument sometimes put forward which is really to the effect that if the defendant happens to be a white, 23-year old pregnant redhead, for some strange reason she is entitled to have on the jury a number of other white, 23-year old pregnant redheads. This seems to be a curious path down which to go, and I am not sure that it is an argument that should ever be allowed to start. There are of course arguments both ways, but it seems to me that a weighty case has been put forward in this report for the argument that trial by jury involves a trial by a genuinely random sample, and that no interfering with the randomness of the sample should be allowed by either side.
As to the other proposal that there should be certain cases in which there would be a fraud trials tribunal consisting of a judge and two lay members who are really expert in that particular field, I have some considerable doubts. We ought to consider first the extent of the problem. It is proposed in the report not that such a tribunal should sit in all long fraud trials, but only in a certain number of what are described as complex cases, and an attempt is made in the guidelines in the report to define those cases.
It is clear from the wording of the report that the complex fraud cases will be a comparatively small proportion of the long fraud trials that we know now. In Appendices J and K the figures show that in 1982 throughout the country there were some 23 long fraud trials and in 1983 some 38 such cases. There the figures end. In parenthesis, I find that a little odd because, ever since the Courts Act of the early 1970s, we have witnessed the steady departure from the courts of the court clerks who knew something about practice and procedure and the range of sentencing available and their replacement by a curious breed of civil servant who spends the whole time sitting in front of the judge compiling meaningless statistics. Why there should be a report in February 1986 in which the last available figures for a fairly elementary matter are those for 1983 is something that I must confess slightly puzzles me. However, that is by the way.
The effect of those figures even for 1983 is simply that it looks as though the number of complex cases of fraud that we are concerned with is well down into single figures per year. Unless I missed it in the report there is no real attempt to calculate how many cases might be involved. It is clearly a difficult calculation to be made. But I hazard a guess on the information that is available that we are being concerned in this proposal to remove the right of jury trial for perhaps some half a dozen cases a year. That is the first matter to be borne in mind.
There are then practical considerations that perhaps are not fully stressed in the report as to the likely 20 consequences of removing jury trial in that small number of cases. There is the point made by the noble and learned Lord, Lord Elwyn-Jones, that there is no evidence so far that juries are incapable of trying the complex case, and, indeed, there is no evidence that in such complex cases they reach wrong conclusions. It goes further than that. I believe it is the very existence of the jury as the potential tribunal that is the only real pressure upon the prosecution to try to simplify the case. If there is no jury, if it is known by the prosecution right from the beginning that there will be a judge and two chartered accountants, or whoever it may be—professional people of that sort—there will be no pressure at all to keep the case simple or clear. I add that the suggestion that in some way removing jury trial will shorten the proceedings is, I believe, a great misconception.
I chaired a tribunal for many years on which there were expert members sitting alongside me, who (as will the lay members in the proposed frauds tribunal) had the right to cross-examine every single witness in turn throughout the hearing, and they did. There is no question but that the proceedings will take much longer if there is a fraud tribunal of the sort envisaged in the report than if the matter is left to be tried by a jury. It is inevitable that a tribunal of this nature will take unto itself an inquisitorial procedure as it develops.
Those I believe are the principal practical arguments against replacing the jury in that small number of cases. When one considers what I can perhaps be forgiven for referring to as the constitutional brouhaha that will emerge once we start trying to debate whether jury trials should be abolished in a particular number of cases or not, whether it is the thin end of the wedge and so on and so forth, then we ought all to reflect that we are only concerned with about half a dozen cases a year. In the light of the practical considerations I respectfully suggest to the Government that perhaps it is simply not worth embarking on this proposal because of all the disturbance that will inevitably ensue.
There is one argument which I have not dealt with that is sometimes put forward and is indeed mentioned in the report by those who argue that it is necessary to replace the jury in this small number of cases. That is the argument that because the Director of Public Prosecutions knows that a jury will be trying the case, he will, if it is a complex case, in some way be discouraged from having an investigation or starting proceedings. I doubt very much whether that is accurate. I suspect that the reason proceedings are not brought in some very complex cases is that the resources for an investigation are wholly inadequate. It is the part of the report—a helpful part—about the increase in the resources for the investigation which I believe will solve that problem. Perhaps I may add, having been one myself at one time, that the curious system of having what was then a Board of Trade inspector and what is now a DTI inspector, a barrister and an accountant working totally independently, but simultaneously, with the police, investigating the same fraud is something which I believe is a great waste of resources. Co-operation between the two might usefully be improved.
21 I leave the interesting but, I believe, comparatively unimportant questions in this report of the jury issues. I come now to what I regard as by far the most important part of the report, the part that deals with the pre-trial inquiry or, as it is proposed it should be called, the preparatory hearing—the review of the case before it starts to get the issues and the evidence clear and everything properly in focus. I have no doubt that if that could be made effective it would be a tremendous contribution towards the shortening and the simplification of the trial of these long fraud cases.
The report does not underestimate the problems. It is right that none of us should do that. Such a procedure involves having a judge who is highly qualified in the trial of fraud cases. Not every judge is so qualified. It involves having the same judge to conduct the preliminary survey as will eventually conduct the trial. It involves having that judge at the time of the survey completely master of all the documents in the case. That means allowing that judge to be excused from his court duties for a week or two weeks or it may be a month before the case starts so that he can master those documents.
That, as the noble and learned Lord, the Lord Chancellor pointed out, involves resource implications of considerable importance. I was encourged to gather the inference from what the noble and learned Lord the Lord Chancellor said that, if it is essential to provide resources, they must be found. I shall not proceed further down that slippery slope in the light of the arguments that are taking place with the noble and learned Lord's department at this moment on another issue.
That is the position so far as the judge is concerned. It involves having at the preliminary examination, the preparatory hearing, prosecuting counsel who has mastered the documents and is capable of playing his part in a trial of this nature. It involves having leading counsel for the defence who will be the same leading counsel who attends both the preliminary hearing and the trial itself. The report mentioned one aspect of the problem but not the converse aspect. One aspect has been widely commented upon in recent years at the Bar and that is the difficulty of persuading leading counsel who is to appear in a case to come to the preliminary hearing. It means putting in a vast amount of work before the preliminary hearing. The fees that are being paid for that for the moment are pitifully inadequate. It is hardly surprising that in those circumstances leading counsel finds it better to do something else on the initial occasion.
There is also the converse position, which causes great difficulty: leading counsel who is going to be in the case may well come to the preliminary hearing and may then find two or three weeks later that he is not able to take part in the trial itself because he has other different and clashing commitments. Somehow, those problems have to be sorted out. I believe that if they can be sorted out it will be of enormous help to getting the issues clear before the case starts.
That leads me to the matter to which the noble and learned Lord, Lord Elwyn-Jones, referred—the question of whether it should be obligatory for the defence to be disclosed either at or shortly after the preliminary hearing. May I say first that I think that in an appropriate case most responsible defence counsel 22 will disclose their defence at the earliest possible moment. It is helpful to them. I think secondly that it is possible to argue that if the defence does not disclose its defence when it manifestly should have done so, or does not make the necessary admissions when they manifestly should have been made, it might be right to penalise the defendant or his counsel in terms of costs.
Where I find it difficult to go along with this report is in relation to the further suggestion that not only might there be a penalty in the way of costs but there might, as a matter of law, be consequences that would follow evidentially and that a jury might draw an adverse reaction to some matter relating to the defendant because of his failure to disclose his defence. The only part of this report, if I may say so, that I found not enitirely convincing in its manner and its argument was the passage that endeavoured to argue that one could have that system and still in no way be weakening the right of silence or the right of a person not to incriminate himself.
§ The Lord Chancellor
My Lords, I wonder whether the noble Lord will forgive me for a moment. I find it difficult to follow this argument in the light of the change, which I think was brought about in the reign of the noble and learned Lord who is sitting on the Front Bench of the Labour party, to insist on the disclosure of an alibi defence. It is easy enough to see why the noble Lord is saying that the prosecution must prove its case and, yes, right of silence and all that. However, we have already insisted, with certain safeguards, on the disclosure of an alibi defence. There must be many defences of that kind which can catch the prosecution off their guard and which surely ought to be disclosed.
§ Lord Wigoder
My Lords, I am grateful for that intervention. The thought had of course occurred to me when I was considering this matter. I think the situation is very different. I think the situation with an alibi is that the trial is very often a very short trial; the defendant very often produces witnesses of whom the prosecution have never heard; the case is over the same day or the same afternoon, and 24 hours later it is discovered on examination that the alibi is totally false or the alibi witnesses have long criminal records about which nobody knew. A fraud case, which by definition is the kind of case about which we are talking, will take days and days, if not weeks and weeks, and I do not believe that that consideration applies.
The last matter which I should like to suggest about the preparatory hearing is this. If it is to be effective, the judge who is presiding over it must have very real powers. Whether they are to be powers given to him by statute or powers in which he is exercising, in the clearest possible terms, his judicial authority, I mind not. However, I do believe that a judge should have the power at the preparatory stage to tell the prosecution, in one form or another, that particular defendants in long cases should not be proceeded against at all, particularly those right on the fringe who are sometimes brought in by the prosecution and who add nothing to the case one way or the other except several weeks of argument.
I believe that the judge should have the power to say that certain charges will not be brought, even though 23 they are on the indictment. That is because again there is a tendency by the prosecution to clutter up the indictment with a large number of unnecessary charges, when very often one or two representative charges will more than suffice. I think also that the judge, who I am assuming knows the case inside out by that time, should have the power to indicate to the prosecution that a certain number of the witnesses are totally unnecessary, as being entirely repetitive, or as adding nothing whatever to the nature of the case. I hope those matters will be considered. I believe that a preparatory review might be a very effective part of the new procedure for shortening fraud trial cases.
Like the noble and learned Lord, Lord Elwyn-Jones, I am also in danger of encroaching upon eternity and I should not want to do so. However, there is one other aspect of the report that I should like to discuss at length on another occasion. I think it is very important. That is the section that deals with our updating of the rules of evidence to enable documentary evidence in addition to be much more freely admissible. I believe this also will be a great step forward in simplifying our procedure.
I end as I began. I welcome the substance of this report. I believe it is a major contribution. I hope very much that in due course we shall look rather more carefully at some of the detailed recommendations in some of the not very glamorous parts of the report rather than concentrate our attention on one or two matters that happen to be of particular public interest.
§ 4.7 p.m.
§ Lord Roskill
My Lords, perhaps I may first thank your Lordships for the most generous welcome which this report has had. I know my colleagues have been greatly touched by the warmth of the reception. If I may, I should like to add a special word of thanks to my noble and learned friend the Lord Chancellor for what he said on the last occasion when the matter was before the House, when a Government Statement was made, and for his very generous observations which he repeated a few moments ago.
Secondly, perhaps I may thank those without whose help this report could never have been produced, let alone produced so quickly. I refer in particular to those who have given us evidence, orally or in writing, or both. They have given my colleagues and me the benefit of their individual and collective experiences and opinions without reserve. Of course, that evidence varied enormously in its content. In the old phrase, "Quot homines tot sententiae". That was only to be expected. Our task as a committee was to evaluate that evidence as best we could, and that we have sought to do in the report.
Thirdly, on the occasion of the Government Statement to which I referred a moment ago the noble Lord, Lord Wigoder, was kind enough to say (and I hope I quote his words accurately) that he found the report "always highly readable". I am not sure whether or not there was a measure of surprise but the noble Lord looked directly at me as he said it. It is an almost unique experience for a judge ever to get credit for anything: it is especially delightful when the credit is undeserved. Many have contributed to this report, to its thinking and to its writing, most of all my 24 colleagues. However, the burden of assimilating and synthesising all the contributions which they made to that thinking and that writing, and making the report wholly readable, fell upon our secretary, Mr. Michael Farmer, of the Lord Chancellor's department. It is only right that I should give him the credit for that is where, in truth, it belongs.
In an interview which I gave on the radio not long after the report was published, I was asked—and the noble Lord, Lord Wigoder, obviously had the same point in mind a moment ago—if I were annoyed that all the emphasis, and indeed most of the criticism, had been directed to our proposal for a fraud trials tribunal in complex fraud cases. I answered that I certainly was no way annoyed, nor indeed was I surprised. But I was rather disappointed, for it seemed to me that some of our critics had tended to start at the end of the report instead of at the beginning. They had not worked from the beginning towards the end and they had not appreciated that the proposals, in which all my colleagues but one concurred—and please remember that they were unanimous on almost all the other proposals—were designed to follow in logical sequence from what we had said, chapter by chapter, in the earlier part of the report.
If I may be forgiven for quoting some words that we used as a summary at the beginning, they were:we have sought to produce a coherent and integrated set of proposals aimed at streamlining the procedures for dealing with fraud cases".We added in the same paragraph that,substantial alteration of any of our proposals may do damage to the structure of the whole".I venture to stress those words—and I hope that what I am about to say will not imperil the friendship of over a half a century with the noble and learned Lord, Lord Elwyn-Jones—because I was a little disturbed to hear him say on the occasion of the Statement that his party could not accept the proposals for the Fraud Trials Tribunal. A similar remark was made on behalf of his party in another place at the same time.
I confess that I was surprised and disappointed that those who claim to be the heirs of the great radical political tradition in this country should show themselves so opposed to radical change when radical change is needed. I was fascinated to hear my noble and learned friend the Lord Chancellor claiming for himself a greater adherence to radicalism than that which I would have expected to come from my noble and learned friend Lord Elwyn-Jones. If indeed we have turned one of my noble and learned friends into a conservative (with a small "c") and my noble and learned friend the Lord Chancellor into a radical, this report will have achieved something.
Before I go on may I deal with one point that was made a moment or two ago. It was about the acquittal rate. One of the bugbears of our work has been the difficulty of ever getting any accurate statistics. The noble Lord, Lord Wigoder, on the last occasion gently chided me with some figures on page 243 and I think that there was an oblique reference to them again today. All statistics are misleading and, with the wisdom of hindsight, I slightly regret that we put in that appendix in the form in which we did. The figures there are of all fraud cases however trivial and they 25 include twopenny ha'penny (if I may use the expression) credit card fraud cases where somebody goes to a London store, is arrested, he subsequently elects to go for trial and very often he pleads guilty before the Crown Court; and those figures of convictions include pleas of guilty and acquittals are only a very small minority of cases. But they have nothing whatever to do with complicated fraud cases for which it is almost impossible to get any accurate statistics.
Perhaps I may mention one other figure before I go on. The noble Lord, Lord Wigoder, suggested that there would only he half a dozen cases for a Fraud Trials Tribunal, if such there be, in the course of a year. One is tempted to say that it is almost anyone's guess what the right figure is, but I venture to think, with great respect to the noble Lord, that he has put his figure very much too low. There are a good many in the pipelines which, of course, do not appear in these rather out-of-date statistics. My own opinion, but it is only my own and I alone am responsible if it is wrong, is that the likely figure would be of the order of 20 to 30 a year. But I would not want to give any warranty on that figure.
When the fraud trials committee was set up, I think many thought that its work was going to be solely directed to the controversial question whether a jury trial was the proper mode of trial in these complex fraud trials. My noble and learned friend the Lord Chancellor had spoken in public about it; my noble and learned friend the Lord Chief Justice had made a long speech about it in Hong Kong, and indeed he in that speech came to a conclusion by no means dissimilar from that which the majority of us have reached in this report. The then chairman of the Law Commission expressed a similar view and others on different occasions had all raised the topic with a view not so much to propound a solution as to canvass an opinion upon what was becoming an increasingly serious problem.
However, as soon as we started work and the evidence started to pour in—and, my goodness! how it poured in—my colleagues and I realised that the question of the mode of trial was but one of a very much larger number of problems, and that it was no use starting at the end and dealing only with the mode of trial. We realised that we must start at the beginning, and that is what we have sought to do. We have made a series of proposals, starting with the investigation and prosecution, continuing through committal, preparations of trial, the rules of evidence, and then at the end, and only at the end, we consider the mode of trial in connection with what we had said earlier.
It is a sad and regrettable fact that at each stage in our investigation we have weighed the present situation in the balance and at each step we have found it sadly wanting. Hence our sad but unanimous conclusion as to the unhappy state of affairs to which the report makes reference. I was particularly interested in the views of those of my colleagues who were not lawyers. Some of them had, of course, in one capacity or another some past experience of the legal process but none of the non-lawyers among them had had any experience of the detail of the process of the criminal law. I well recall one of my colleagues at one 26 of our meetings throwing up his hands in horror and saying, "No business run like this could last for five minutes".
It cannot be too strongly emphasised that the criminal law comes into play in these cases when, and only when, regulation, whether self-regulation or statutory regulation, has failed. It is the last resort. Your Lordships in a few minutes will be hearing a maiden speech from my noble and learned friend Lord Griffiths. Perhaps in those circumstances a cricketing analogy is not out of place. The criminal law is but a longstop against some very fast bowling which has succeeded in getting past the wicket keeper when it ought never to have done so. The criminal law has often been called a blunt instrument. Whether that is generally true is irrelevant. What is all too relevant and all too true is that it has in recent years proved deplorably blunt in dealing with fraudsters.
If the criminal law is to achieve its purpose in this field it must be swift, it must be effective, it must be certain in its application and, above all, it must act as a deterrent of fraud while of course ensuring that the innocent do not suffer. It must ensure that the guilty do not escape, and do not escape either because they are not prosecuted at all as the evidence for some techical reason is inadmissible, or because they cannot be got to this country, or because of the failure of justice on the part of the tribunal which has to determine questions of guilt or innocence when that tribunal has not fully comprehended the intricacies and cunning underlying many of these frauds.
I do not believe that the vast majority of people in this country who have not in recent times experienced and struggled to understand these intricacies and cunning have any idea of their complexity; complexity which can all too easily confuse, and may well all too easily confuse, and sometimes defeat judges, practitioners, accountants, as well as those who are from time to time, to their misfortune, called to sit on juries in these cases. Lawyers are often, and sometimes I am afraid not without justice, accused of complacency, of complacent resistance to change. They sometimes appear to adhere rigidly to Gilbert's words that the law is the true embodiment of everything that is excellent. But, having served on this committee with my colleagues, I believe now that only the most enthusiastic and myopic lawyer could say that of the present situation in relation to complex fraud cases.
With all respect to those who have said in evidence to us, and who may say again later in this debate, that in the end it is always a question of honesty or dishonesty and that issue is best decided by a jury, that is far too simplistic a view. In almost all serious fraud cases the first question is: what were the transactions of which complaint is sought to be made? The second question, which you will only attempt to answer when you have really understood and answered the first, is: were those transactions fraudulent or not? And the third, which again you can only attempt to answer when you have answered properly the first two questions, is: was the particular defendant a party to that fraud? Unless you really understand what the transactions in question are you can never begin to hope to get the right answers to the next two questions.
27 Special skills are required to achieve that understanding. We have special skills in tribunals charged to deal with other problems. It is not perhaps without significance that since our report was published it has been announced that efforts are being made to streamline the procedure of the Commercial Court because of the greatly increased complexity of the work in that court, which is often involved in the civil side of problems arising from serious commercial fraud. If we have other special tribunals with special skills, why is it wrong to have special criminal tribunals to deal with the special field of complex fraud? May I make the point in passing, that if there is a resource problem here, more than enough money would be saved by shortening the length of those fraud trials and stopping the amount of money spent on DTI inquiries to provide for any number of judges and adequate remuneration for those who are involved in future preparatory hearings.
We have been criticised because it has been said we have ignored the weight of legal professional opinion against change. If one judges this question by numbers only and one treats the Criminal Bar Association or the Law Society as representing all barristers practising in criminal courts, or the Law Society as representing solicitors similarly engaged, no doubt on a count of numbers only the point can be made. We most certainly have not ignored their opinion, which all of us greatly respect; but cases are not to be decided in favour of one party who calls 20 witnesses as against another party who calls only two. Much as one respects the views of those who disagree with us, there has been a considerable body of highly experienced opinion the other way and it has been our task to evaluate all the evidence which has been put before us.
It is not, I hope, out of place to add this. I have, of course, had a lot of letters since the publication of the report. Curiously enough, not one single one of them has been critical, but two—and I will not name their authors—interested me in particular. One was from a partner in one of the best-known firms of City solicitors who have been involved in what I might call the civil or aftermath side of many of these commercial frauds. The other is an immensely experienced criminal solicitor who has acted (usually for defendants, and I suspect sometimes far too successfully) in many of these cases. Each has said in effect, "Thank goodness you have grasped this nettle in spite of professional opposition." One went so far as to say that he greatly feared that further continuous opposition from the legal profession might end by damaging that profession rather than achieving anything else, when so many outside the legal profession have supported our proposals.
It is a commonplace that crimes of all kinds have vastly increased. In the welter of violence of which we read daily, another shocking increase has tended to be overlooked. Like my noble and learned friend Lord Elwyn-Jones, I know not the reason for this increase any more than anyone else. That shocking increase has tended to be overlooked, though there have been plenty of voices crying aloud in this particular wilderness against fraud and its growth and the apparent inability of the legal system to contain it. It has been our task as a committee to listen to these 28 voices—something which too many have hitherto not been willing to do—and, having listened to the voices, to try to grapple with this increase. If we grapple successfully there is still time to undo the damage which has already been done; but if we do not grapple with this increase the damage will increase further and markets which for centuries in this country have depended on integrity for their success are in grave danger of disintegration. The only losers will be this country, those who invest here and those who work in our markets— and, heaven knows, we cannot afford still more unemployment.
The small investor must always be protected: at present he is not. Markets must be cleansed of corruption. No doubt some of our proposals are readily susceptible of improvement. I do not doubt that, if and when there is legislation, they will be improved. We claim no monopoly of wisdom, but each one of us has lived with this problem for more than 18 months, and I venture to commend to this House a group of proposals which result from that work which we offer as what we regard as the best solution to problems of increasingly frightening dimensions. With the increase in technology and the resultant ability to move and launder vast sums of money around the world without leaving traces, it is no exaggeration to say that unless drastic action is taken now those frightening dimensions will become even more frightening all too quickly.
My Lords, I have not sought to answer all the detailed points which will arise on the occasion of legislation, but I would venture to say in conclusion that nothing is further from our minds than to alter the onus of proof or to propose a wider extension of trial otherwise than by jury than in a small number of fraud cases. When we said that some of our proposals might usefully be extended to other branches of the law, all we had in mind were things like the rules of evidence, because some of us felt (though it was outside our terms of reference) that it was quite absurd that we should have one set of rules for complex fraud cases and another, say, for complex drug cases or the like. I have again encroached upon eternity. I am sorry; but there are the proposals and I humbly commend them to your Lordships' House as the result of the working of our committee over the last year and a half.
§ 4.26 p.m.
§ Lord Griffiths
My Lords, I well remember the day, many years ago, when as a very anxious young member of the Bar I faced the ordeal of first appearing before the Appellate Committee of your Lordships' House. I was heard with tolerance, sympathy and indulgence: I did not deserve it. Today, equally anxious and equally undeserving, I can only hope that your Lordships will extend to me that same benevolent tolerance.
I am very grateful indeed to my noble and learned friend Lord Roskill, to my noble friend Lord Benson and their colleagues for the clarity with which the arguments are stated in this very important report, and for the courage with which they have stated their conclusions. Certainly they cannot be accused of not grasping the nettle—perhaps I should say "the bed of nettles".
29 I hope that my contribution will recognise that the span of eternity is no more than 10 minutes and for that purpose I propose to address myself, drawing on my experience, to the more practical aspects of fraud trials and the impact of the recommendations in this report. I will leave conceptual and constitutional considerations for those better qualified than I to consider.
I should like first to deal with the question of delay. The report has identified and exposed the scandalous delay that all too often takes place between the time when the stench of fraud and corruption first assails the public nostrils and the time when the fraudsman can finally be brought to trial. When analysed, the causes are as follows: first, an ineffective initial investigation caused by a lack of resources and trained personnel, too often overlooked by a massive inquiry under the Companies Act by inspectors appointed by the Department of Trade and Industry, which drags on for something over three years. Thereafter there is further consideration of those papers and further investigations, followed by committal proceedings in which, if the fraudsman is properly advised, he will insist on an old style committal so that the delay can be further prolonged and the fog of war can begin to emerge. Thereafter there is a further prolonged delay before a date can be fixed to try the case, which will now take months and will require a particularly skilled judge to handle it.
The result of this lamentable delay, which your Lordships must appreciate will run into five years and more, is threefold. First, it hands to the counsel on behalf of the fraudsman an invaluable weapon in cross-examination: "How can you remember this event seven years ago of which you speak? Tell me, Sir, where did you go for a holiday? What did you buy your wife for her birthday seven years ago?" Of course the questions cannot be answered and much play is made.
Next—and this is of fundamental importance—many prosecutions, because of this factor, never see the light of day at all. It must be appreciated that those responsible for mounting prosecutions have only a limited amount of resources at their disposal and they are bound to weigh the prospects of a successful outcome to the prosecution against the enormous expense involved in mounting it and the deployment of resources. Everybody knows that very stale cases are difficult to get home and, because of the very staleness of the papers, a decision is taken that the chances of success do not justify bringing a prosecution.
I am quite satisfied that if the recommendations contained in this report, relating to the formation of a properly integrated prosecution service, the abandonment of these vast Department of Trade inquiries, the curtailment of any committal proceedings and a proper grasp of the matter at an early stage by the trial judge, are followed, it will drastically curtail this period of delay.
That will have two results. First, counsel will be deprived of this powerful cross-examination weapon, but, secondly—and let this be appreciated—for a time at least, until the message gets home to the fraudsmen that the game is not worth a candle, there will be a significantly greater number of prosecutions in very complex frauds and, in my view, about time, too.
30 Secondly, there is the question of our antiquated rules of evidence. Every day in daily life we are acting upon copies of documents which we have no reason to believe differ from the originals. Every day we are accepting the contents of documents as prima facie representing the truth. Why should it not be so in a prosecution? I have had experience of a case in which it was manifest that a monstrous fraud had been perpetrated on the public, but, quite deliberately, the money had been spirited abroad and passed through a whole series of companies in Liechtenstein in Belgium, in Luxembourg—I know not where.
There could be no question about the guilt. We had all the copy documents. But we had to abandon the prosecution because we could not obtain the cooperation of witnesses from abroad which was necessary to prove the originals, and those guilty men are still at large and enjoying huge sums of the public's money. So I welcome those proposals and, furthermore, I see no reason whatever why very serious consideration should not be given to applying them in cases other than fraud. They are sorely needed.
I know that I am not to be controversial and I come now to the question of the mode of trial. Peremptory challenge is not hallowed by ancient usage. In my days at the Bar I hardly ever came across it at all, despite the fact that when I was practising there were seven peremptory challenges. You could have caused havoc in almost any trial, but the peremptory challenge just was not used. It is, in fact, a modern innovation. I do not blame counsel for using it. If I were defending in a complex fraud case and I thought little of my defence, I would think it was in my client's interest to get the bank manager and the accountant, as I perceived them, off the jury. But it does not advance the cause of justice and I am wholeheartedly in favour of its abolition. The pity is that we did not have the courage to abolish the challenge entirely when we reduced it so recently from seven to three.
As to the form of the tribunal itself, I am of course very sympathetic to those who are anxious about this proposal. Any lawyer and, I think, any informed laymen instinctively recoils against the suggestion that trial by jury should be curtailed. But after anxious consideration, I have come to the conclusion that in very complex cases it is the right answer to have the fraud tribunal proposed.
I ask myself this question: What is the imposition that we are placing on our fellow citizens when we require them to sit as jurymen and women in these incredibly complex cases? We require them to take an oath or make an affirmation to return a true verdict according to the evidence. What right have we to expect them to undertake that task, when we have made no attempt to assess their capacity to understand the mass of complex evidence or given them any training to enable them to do so?
It is recognised as a fact that many judges are not capable of handling these cases. It is recognised that many counsel are not capable. What right have we to suppose that 12 men and women drawn at random are capable? They are not. At the end of the day, either they slavishly follow the judge's summing-up—which is not, in my view, a satisfactory state of affairs—or they follow the, perhaps, two or three members of the jury who have the training and capacity to understand. 31 Or, if they are honest, they just ought to throw up their hands and say, "As I have not understood it, I have got to acquit him." I cannot believe that this is a satisfactory state of affairs and I cannot believe, if in the very limited number of cases we adopt the solution proposed, that we shall endanger the value of trial by jury in our society.
Finally—and this is my one reservation—I would like it to be a unanimous decision of the full tribunal. There are three persons concerned. The suggestion is that it should be a majority decision. If one out of three trained and skilled persons is not sure of guilt, then can we say that the accused is guilty beyond all reasonable doubt? I would rather that it was a unanimous decision.
§ 4.40 p.m.
§ Lord Campbell of Alloway
My Lords, noble Lords on all sides of the House would wish to acknowledge the rare quality of that excellent and authoritative maiden speech of the noble and learned Lord, Lord Griffiths; and to congratulate him upon his grace of timing and manner of execution with that light, discursive touch. To be allowed to convey this customary valedictory message to a friend of such long-standing is indeed a very special privilege. No doubt your Lordships would wish that the noble and learned Lord should not ensconce himself in his learned duties but that he should continue to share the benefit of his expertise in discussion and debate on many future occasions.
In following the noble and learned Lord, I for one defer to his experience, both at the Bar and on the Bench, when he spoke of the problems of complex fraud crimes, of the inhibitions that prevent prosecutions, and of his criticisms of the antiquated rules of evidence. As the noble and learned Lord, Lord Elwyn-Jones, has said, this is indeed a timely report. The hope is that the Government shall accept the broad drift of reform and innovation proposed, which would enhance the quality of justice; and that the Government shall introduce implementing legislation without delay.
If such be the intention then it is indeed fortuitous that we should debate this report in the immediate wake of a surge of militancy on the part of some of those without whose co-operation the report's recommendations may not be implemented. Fortuitous because, as a by-product of the recommendations to save time contained in the report, there will be substantial savings in public expenditure; and that affords an honourable and realistic means of resolving the current dispute that will also aid the urgent implernentation of the report. Such anticipated savings may be laid as a tribute on the altar of escalating costs of civil and criminal legal aid, to appease the displeasure of those gods in the Treasury.
Irrespective of the threat of pending proceedings or withdrawal of services, upon which it is not proper to comment. acceptance of the report ordains—no more, no less—that the Government should reopen negotiations on adequate remuneration, affirmed in paragraph 6.46 of the report, and so fulfil legitimate expectations in this regard—and thus sweep the stalemate from the Exchequer board.
32 In such negotiations, new norms borrowed from the consequences of Government acceptance of the report could serve the irenic spirit of compromise; in particular, that the level of fees shall ensure that people with the higher degree of competence envisaged—and I take just three passages in the report—in paragraphs 9.38, 9.42, and 9.45 to 9.50 shall be attracted into becoming and remaining members of the criminal Bar. The second norm is that the savings in public expenditure should benefit not only the Government as the monopoly employer/paymaster but also the practitioners—both branches of the profession—in terms of pay increments for their services.
In any event, consultation between the Government and the Bar must ensue, as many of the recommendations propose to establish new duties, new disciplines and new sanctions of general application in the conduct of criminal cases—some of which could lead to disciplinary action before the Bar Council. I refer in particular to paragraphs 6.55 and 6.39 of the report. Incidentally, those are matters that attracted the attention of the noble Lord, Lord Wigoder.
If the Government intend to endorse such recommendations—which call for new duties, new disciplines and new sanctions—and introduce a Bill as a matter of urgency, then there is no time to be lost. Consideration will have to be given, for example, as to whether such recommendations should, with the agreement of the Bar Council, be incorporated in a voluntary code of practice having no legal effect. If some such consultation is inevitable, then surely it would be unrealistic to suppose that that area of consultation would not be enlarged to cover remuneration, with a view to establishing a voluntary code of practice, by agreement, in that regard also.
It cannot be—it must not be—that implementation of the valuable proposals contained in the report should be frustrated or delayed by overt strife with the Bar, in which my noble and learned friend the Lord Chancellor is inevitably involved. Irrespective of the merits—with which your Lordships are not concerned —this situation is one that may only be resolved by patience, restraint and continuing negotiations. It is a hatchet that must be buried, and buried soon.
In all this, fair credence ought to be given to the fact that, whatever may be the warmth of personal sympathy, my noble and learned friend the Lord Chancellor speaks for the Government and, as such, is subject to financial constraints. So indeed are the Law Officers, who are responsible for prosecution fees, subject to financial restraints. My noble and learned friend's responsibility lies only with the defence side fees funded by legal aid, and the means of resolution lie within the province of Government, not within the gift of my noble and learned friend.
As to the report, it is fortunate that the terms of reference should have been so widely interpreted that by logical extension many of the recommendations made in context with fraud trials should have a far more general application. The recommendation in chapter 8 as to trial by FTT of complex frauds (not the vast majority of fraud cases) must be seen in this perspective. As to this, I have only two qualifications. I share entirely the reservation of the noble and learned Lord, Lord Griffiths. The decision of the FTT should be unanimous. My other qualification is that 33 the appeal procedure under paragraph 8.59, from the judge who authorises trial by the tribunal instead of trial by jury, warrants revision.
Here the suggestion is that the Court of Appeal should be given jurisdiction to entertain such appeal. It should be enjoined to re-hear the original application on the merits without being bound in any way by the original decision. Why should this be requisite? It is because paragraph 8.2 recognises that what is a "complex fraud case" belies definition. The guidelines in the annexe at page 153 assuredly are too vague and imprecise to lay down any principle: and so, the original decision cannot easily be said to be wrong in principle. In that situation, according to settled practice, the Court of Appeal may not reverse the decision which involves the exercise of judicial discretion (even if it disagrees with it) because it cannot be shown that the judge erred in principle. So it is apparent that if there is to be any effective appeal a revision is requisite. Revision of the guidelines by the Court of Appeal, to which reference is made in paragraph 8.59, cannot alleviate this problem or remove the obstacles strewn in the thorny path of any such appeal.
The removal of the right to trial by jury in complex fraud cases is justified because the quality of justice, far from being diminished, will be positively enhanced. There will be safeguards against perverse convictions on trial by jury and extended safeguards against erroneous conviction at the hands of the tribunal which cannot obtain on a jury trial; for in a jury trial a perverse conviction in a complex fraud case through ignorance, want of understanding, want of special skills, inattention, prejudice, tedium, confusion, or sheer exhaustion, cannot be challenged if the summing up is correct in law and the facts are left to the jury.
On a trial by the tribunal the requirement at paragraphs 8.66 to 8.70 that the judge should give a reasoned judgment on both fact and law affords a substantial safeguard which does not obtain on trial by jury where no reasons are given by the jury and special verdicts are out of favour. But the reasoning of the judgment of the tribunal on fact will be open to challenge on new grounds, new safeguards: first of all, that there is no basis on which a finding of certitude on a primary fact could be supported and, secondly, that there is no basis on which a finding of certitude in drawing an inference from the primary fact could be supported; in which event, with either of those safeguards satisfied—which cannot obtain on jury trials—conviction would be quashed on appeal if unsafe.
In conclusion, it is much to the credit of my noble and learned friend the Lord Chancellor that he should have had the wisdom and foresight to envisage the need for such a report—I think it was as long ago as 1983—and to have appointed the noble and learned Lord, Lord Roskill, as chairman. Under his chairmanship the committee faced up to the need for fundamental change. It has grasped a very awkward nettle and in this, as all noble Lords who have spoken in the debate recognise, it has rendered a signal service.
§ 4.57 p.m.
The Earl of Buchan
My Lords, I address your Lordships for the first time very conscious of the 34 universally high standard of speeches in your Lordships' House and it is your Lordships' indulgence that I shall need and request. In return I promise to remember the advice given to my grandfather many years ago by an eminent member of your Lordships' House: "Be brief, be quick, and for heaven's sake try to make sense".
At this point I should like to place on record the kindness and firm tolerance shown to those who have just arrived in your Lordships' House by those who work in this appropriately magnificent Chamber and round about it—the Clerks at the Table, doorkeepers and those who work off the west front corridor. At the mention there of a maiden speech guidance notes are thrust into one's hands. One is asked to note particularly the paragraph on controversial speeches. Be assured, my Lords, by the figure registered in the controversy meter in the roof—which records zero Celsius, nought centigrade and, to those who like myself prefer the older ways, 32 degrees Fahrenheit. I should like also to thank the noble Baroness, Lady Hylton-Foster, who gave me some advice on this controversial matter. She added at the end, "Of, course, there are two sides to every question,".
Now to the matter in hand, and not without some trepidation. A Q-ship with no legally qualified man in charge sails into an ocean of experts. I should like briefly to address your Lordships on three particular matters. I congratulate, as others have done, the noble and learned Lord, Lord Roskill, for this historic and notable report. My first point concerns committal proceedings, the second point relates to fraud and the City of London, and my third point, which is nearest to my heart, concerns trial by jury.
On the subject of the proposals to change committal proceedings, I speak only as a lay magistrate sitting in the City of Westminster. In fact, I enjoy old style committals, and not only because they are different from the business of awarding penalty points to drivers who have strayed into bus lanes. In common with the noble and learned Lord, Lord Elwyn-Jones, I wonder if both the new proposals, the interim procedure and the new transfer certificate, which are to be used at the discretion of the prosecuting authorities alone, in the cause of justice and speed—which are not necessarily synonymous—are right and consider properly all the interests of the defendants.
On the matter of serious fraud and the City of London, which are most definitely not synonymous, I have plied my trade there as a member of the Stock Exchange for many years now. That organisation has its own compensation fund to repay any member of the public who has suffered a loss through fraud by a member of the Stock Exchange. Thus it welcomes the proposals of this report, saying that its own disciplines are, of course, no alternative to state prosecutions, and it looks forward to the time when court procedures will be equal to the task of unravelling the complexities of financial fraud so that convictions can be obtained.
Now I come to the point where really strong feelings are aroused, which is the right to trial by jury and the recommendation to do away with it. The noble and learned Lord the Lord Chancellor has kindly referred to the fact that I descend from Thomas Erskine, Lord Chancellor in the Ministry of All Talents, who took as his motto "Trial by jury" and who obtained eminence 35 by his eloquence before juries. When addressing your Lordships' House shortly before the death of His Majesty King George III he used these words:'Trial by jury' has preserved our most gracious Sovereign throughout a long and glorious reign. 'Trial by jury' is the best security for the rights of your Lordships, and of every order in the state".Every man and woman can understand trial by jury. It has a ring to it. Trial by appropriately qualified lay member of a Fraud Trials Tribunal or assessor does not.
When I first read the noble and learned Lord's report, in defiance of the noble Lord, and much as the reader of a detective story should not, I meant to start at the end. I hoped to read about the right to trial by jury at around page 180. Chance took me ten pages on, where I found my own feelings on the subject so perfectly expressed that I drifted off into some mellow haze of "My sentiments precisely", "I could not have said it better myself" and "Why has no one ever said this before?"
Therefore, consider my utter dismay when I found that I had not picked the recommendations at all but the Note of Dissent by Mr. Merricks. Notwithstanding this, I must read out this short paragraph from the report:I do not think that the public would or should be satisfied with a criminal justice system where citizens stand at risk of imprisonment for lengthy periods following trials where the state admits that it cannot explain its evidence in terms commonly comprehensible".Precisely, my Lords.
There it is. I have been greatly privileged to have been able to make my maiden speech before your Lordships on this report which has been referred to on an earlier occasion by the noble and learned Lord the Lord Chancellor as "readable, thorough and radical" and by the noble Lord, Lord Wigoder, as "constructive, stimulating and provocative". Your Lordships will be giving the fullest consideration to all the recommendations in the report. I hope that I shall not be thought presumptuous in hoping that specially powerful thoughts will be deployed on any proposals to diminish the defendant's right to trial by jury.
§ 5.5 p.m.
§ Lord Silkin of Dulwich
My Lords, it is my great privilege and on this occasion my very great pleasure to be able to congratulate the noble Earl on his first speech in this House. He has made his points persuasively, with wit and briefly, and we certainly look forward to hearing him on many future occasions. The fact that I agree very strongly with much of what the noble Earl says perhaps influences me even more to award him those congratulations.
I must also congratulate the noble and learned Lord, Lord Roskill, and the noble Lord, Lord Benson, as well as other members of the Committee, on producing both an extremely readable and in many ways a persuasive report. Even if one disagreed with every recommendation the report would be of very great value, because it will enable Members of this House and others elsewhere to examine in detail the vital points that need to be considered in relation to fraud, and I am quite certain that such will be its effect. 36 Certainly I think we all wish to look with very great care at all the recommendations, perhaps even those for which we may begin by feeling sympathy, to see whether they will really stand up well to the investigation which ought to be made.
I hope that the investigation will not be confined wholly to lawyers. One of the matters on which I find myself able to congratulate the noble Earl is that he has the courage—I shall not say the temerity—to be one of a very small minority of laymen among a large number of distinguished lawyers who are taking part in this debate. In a way I think it is a pity that there are not more laymen who are doing so and giving us the benefit of their views.
Having congratulated the authors of the report, I should like finally to congratulate Mr. Merricks, the writer of what I at any rate, as does the noble Earl, think was an extremely persuasive Note of Dissent. I agree with much of what he says.
One could take up far too much time in going through detailed points one by one, but perhaps I may deal with just one or two of the points made. In doing so I should like to repeat that the recommendations need to be studied with very great care and if I do not deal with more than one or two it is not because I am not impressed by very many of them, both as they appear in the report and as the noble and learned Lord, Lord Roskill, reviewed them in this House.
I particularly support the concept which the report put forward that in these complex cases—and indeed this applies whether we are dealing with fraud or any other complex matter—there should be a prosecution team of the same leading counsel throughout, if that is possible and if the Lord Chancellor of the day does not deprive the Bar of his services too soon. I take as an example of that the series of cases known as the Poulson cases, where my predecessor as Attorney-General, the noble and learned Lord, Lord Rawlinson, set up precisely such a team. He headed it by two distinguished Queen's Counsel, both of whom, fortunately not until the case was over, went to the High Court Bench. In a case of that kind, that kind of organisation, with specialist police officers, specialist accountants, knowledgeable and able members of the DPP's department, in that particular case working always together with the Law Officers, was essential. I hope that that will be taken as the kind of approach about which the report is talking and which ought to be followed.
Secondly, I should like to say a word about the point that was particularly emphasised by the noble and learned Lord, Lord Griffiths, in his excellent speech relating to Department of Trade reports. I do not think that perhaps it is quite so simple as it has been made out to be. Department of Trade reports are very often required in order to satisfy a feeling among the public that they need to know more about, for example, the collapse of a group of companies.
From my experience, I can say that it certainly sometimes happens that from the Department of Trade report emerges the evidence of fraud. Of course if that happens, the period to which the noble and learned Lord, Lord Griffiths, referred may still obtain; but I sympathise very much with the view expressed in the report that so far as practicable the shorter 37 procedure under which the Department of Trade Inspectorate can act should be made use of rather than the longer.
In particular I think that it is most important that the departments concerned—the Department of Trade, the new Crown Prosecution Service and the Law Officers of course—those above them—should provide guidelines which will prevent the difficulty that often arose of conflict in the consideration of whether there should be a Department of Trade inquiry or not. It would be realised, that, if there is a Department of Trade inquiry going the full length of the two or three years that they often do—often because, being conducted by counsel, the hearings can only be at intervals rather than over a consecutive period—it becomes for a number of reasons extremely difficulty to prosecute after the inquiry, both because of the feeling that it may be unfair to those who have given their evidence under compulsion and also because of the length of time that has been taken in the process.
When I was Attorney-General—and I am sure that this applies to my predecessor and successor—one of the most difficult matters, for the very reasons I have given, was advising the Secretary of State for Trade whether to embark upon an inquiry. I hope that with the benefit of the Crown Prosecution Service in the future, the existence of which may help to resolve many of the problems illustrated in the report, that problem may also disappear.
Let me pass to two major matters—major in the sense that they are the sort of matters that the public is likely to consider to be of importance. The first is the question of challenges. I think that I would wholly agree with the first words of paragraph 7.29 of the report, where it is said:We have considerable sympathy with the exercise of the right of peremptory challenge in pursuit of an aim of securing a better racial or sexual balance on a jury".Having said that, the report goes on to say that there is no sympathy with the exercise of that right simply for tactical reasons. No doubt we all agree with that. But surely the major difficulty is that if we abolish the right of challenge and the right to stand by, we are not only abolishing the exercise of that right for largely tactical reasons but we are also abolishing the right of peremptory challenge in pursuit of the aim of securing a better racial or sexual balance on the jury. We simply cannot have one without the other.
That is a point which it seems to me must be considered extremely carefully before effect is given to the proposal for the abolition of peremptory challenge—a proposal which, quite rightly, is accompanied by the proposal that it would be necessary also to abolish the right to stand by for the Crown, because there must be equality between the prosecution and the defence. Indeed, that was one of the great problems that I found that I had to try to resolve when it came to a subject that did not cause me much popularity—that is, what is called jury vetting. Necessarily it was the prosecution that obtained the information that led to certain people being taken off the jury. I did my best in the guidelines to ensure that any material that the prosecution discovered which it was felt would be of value to the defence or which the defence ought to know about in relation to the right to 38 challenge should be passed to the defence. That was the nearest that one could get to equality in that sense. But of course all that would disappear if these proposals go. The House ought to address itself carefully to the question of whether that will not leave a hole which the right to challenge for cause will be inadequate to fill.
Having said that, let me come to the issue which certainly has raised and is likely to raise the greatest amount of controversy, that of mode of trial. Of course there are many highly complex cases which are not necessarily cases of fraud. It may well be that whatever decision is ultimately made on the question of fraud in highly complex cases will be passed over to other complex cases; indeed, perhaps cases which are not cases of fraud technically in the sense that fraud is charged but where fraud is an element in the case of some other charge.
There I must say that I am very much impressed in particular by what Mr. Merricks says. The report gives four reasons put forward for keeping a jury and dismisses them, I think rather too lightly. But it does not put forward what I regard as the most important point, which is perhaps summarised in C11 of Mr. Merrick's note of dissent; that is to say:The constitutional argument put … amongst others, by Lord Devlin 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".That has become so much a convention of the constitution that, as Mr. Merricks says in C5, the people who are closest to the existing system, including the vast majority of the police, the legal profession, the magistrates and so on, were overwhelmingly in favour of retaining the jury. It is not an answer to say that we shall adopt an alternative procedure in only a very few cases. We were compelled to adopt it in the quite exceptional circumstances of terrorism in Northern Ireland. That was for a totally different reason to those advanced in this case. It was because of the danger to individual jurors and the real possibility that you simply would not get verdicts from juries which were mixed so far as religion was concerned. Those circumstances do not apply here. It is stated that juries would not be able to understand. Before we dismiss the jury system on that basis, it seems to me that one should be looking, as indeed the report did, at other alternatives, regarding this particular alternative as literally the last one to adopt if one found that there was simply no other alternative.
I hope that many of the earlier parts of the report will result in improvements in procedure which will make fraud trials much simpler for people to understand. If that happens the problem may disappear. One possibility that struck me as a recommendation when I read the report has not been dealt with. I wonder whether it is not one to which attention should be directed. The proposal is that there should be a tribunal consisting of a judge and two expert lay assessors and that the majority verdict should be accepted. There are those who suggest that this is wrong. But assuming that it is the view that is adopted, it shows perhaps one of the major reasons why those consulted want overwhelmingly to keep the jury system. With a jury, it is still the law that a decision has to be either unanimous or approved now 39 by at least ten to two. Here, a decision of guilt could be by two to one. That seems to me to be highly undesirable and a position that would not easily be accepted by the community at large.
However, the two sitting in addition to the judge are to he experts who will be able to give to the case and to the judge their own expertise. They will be people familiar with the type of case that is before the court. There are likely to be no judges who will not be grateful for the expertise and the knowledge that will be given to the judge. But, if that be so, is there any good reason why the same sort of expertise should not be available to the jury? Is there any reason why the jury should not have an opportunity during a complex case of this kind to consult expert assessors with particular knowledge of whatever the issue may be—the Stock Exchange or other area of finance—and who would be able to keep them abreast of the meaning of different parts of the case which otherwise they would probably be unable to comprehend?
There may be all kinds of reason why that would not be practicable. It is a pity that the report does not look at a suggestion that would involve keeping a jury with the benefit of that assistance so that at least we could see on paper what are the arguments that make that proposal impracticable. I advance it because I feel strongly, as I said earlier, that it is only in the very last resort, in the sort of situation with which we have been faced in relation to the emergency in Northern Ireland, that I would be content to see abolished an institution that peole regard as a safeguard both because it has existed for as long as it has and also because they know that if they are found guilty this can only be by a verdict of at least ten out of 12 laymen.
For that reason, I advance the suggestion as a possible compromise between points of view, but one that should at least be studied before the jury is accepted as being suitable for abolition in complex fraud cases and possibly other complex cases. I hope that those who give consideration to this matter will not lightly accept the view that juries should be abolished if there is any alternative way of dealing with the problem.
§ 5.26 p.m.
§ Lord Benson
My Lords, I was a member of the Roskill Committee, and I am grateful to the House for allowing me to speak on this subject. I hope that the House will forgive me for speaking with conviction in support of its recommendations. The broad sweep of the report has been covered already by our chairman, the noble and learned Lord, Lord Roskill. In brief, it proposes radical changes in the criminal procedures for fraud cases from the time of discovery until the verdict. The present procedures are long out of date. I suspect that similar changes are also necessary in the civil procedures.
I should like to speak this afternoon on one subject only, and that is the question of jury trials in complex fraud cases. I start with this provocative observation that there is no argument, no factor, in favour of jury trials in complex fraud cases that can possibly stand up to the dictates of common sense. Every year in this country 3 million people come before a tribunal of 40 one sort or another. It may be the magistrates, the Crown Court, the High Court or the numerous tribunals that have been set up in the past 30 years.
In every single case the members of the tribunal chosen to hear those cases are carefully selected and hand picked. Their cross-references are taken up. The object of doing that is to select people with three qualities that all of them are believed to have—integrity, competence to do the job, and power to comprehend the issues at stake. Every year, 30,000 people come before a jury of one sort or another. For that purpose we choose 12 people at random. The method of selection virtually guarantees that not one of the 12 will have all the three qualities that are chosen in the other cases. I ask you, my Lords, whether that stands up to common sense?
Not many people really understand what a complex fraud case involves. I want to give two examples in order to get the matter into the right perspective. We had evidence from one prosecuting authority that at the time of writing, the exhibits—they were not by any means complete—were 30 feet high, which is well above the height of the clock behind me, and the authority had the grace to say that there was no one left in the department who could understand the evidence.
Perhaps another more practical example might be this, and I speak from practical experience. It would comprise over 100 witnesses, many of them of doubtful probity. There would be 5,000 exhibits chosen from many thousands more. There would be 50 or 60 banking accounts paid all over the world in different currencies. Many of the records could not be seen. They would be computer records and marks on discs. There would be a network of 50 or 60 companies spread round the world locking or interlocking in a way which it is almost impossible to discover. There would be six or seven accused with varying degrees of guilt or innocence. There would be six leading silks, each placing a different interpretation on the evidence of the oral witnesses and the documents which are put forward as exhibits. The trial would last from 30, 40 or 50 days—the longest we have had on record so far on the evidence is 137 days. I speak from practical experience. It sometimes takes me a week, with skilled back-up staff, to trace through one single transaction to see what has really happened.
What sort of persons do we choose to try these cases? They are supposed to be 12 persons chosen at random from society. Great slices of our population are not competent and are not allowed to sit on jury trials: the armed services, lawyers, the medical profession, clergymen, and others. But then there are two other groups: the self-employed persons and those who are currently engaged on day-to-day complex and difficult matters. They are always in practice excused from jury trials in long cases because they cannot get away from their businesses though they might very well be competent in other respects.
What then of the rump that is left? There is no requirement that a juror should be able to read or write; and we have evidence before the committee that jurors are sworn who can do neither. Many of them, we had evidence, had limited command of the English tongue and they sit for 20 or 30 days grappling with the English tongue and quite unable to comprehend the 41 facts of the case. In a great many cases jurors have no banking accounts so that they do not even know, probably, the difference between a debit and a credit. Can it seriously be suggested that men chosen in that way are capable of comprehending and arriving at a sensible solution in the type of fraud case that I have described?
I say this to your Lordships: that justice is not being done. It is positively and affirmatively not being done. The evidence on this was clear: that a great many frauds are discovered but many of the more serious cases are not brought to trial. The major contributory cause was that there is no possibility of getting the jury to comprehend the issue. In other cases we were told—the evidence again is clear—that only minor charges are preferred because the jury would never understand the facts and the complexities of the charges which ought to be preferred. The result of this is that fraudsters are running free instead of serving long sentences behind prison bars.
I ask your Lordships to listen to just one sentence, the written evidence of the Inland Revenue. I beg your Lordships to observe what it says rather closely:Some prosecutions that ought in principle to be brought can never effectively be brought as long as trial by jury is the only method available".That is the opinion of one of the most competent and efficient prosecuting authorities in the country. There are 46 other prosecuting authorities, many of whom have nothing like the skill and the competence of the Inland Revenue department. If that is the opinion of the Inland Revenue department, how bad must it be in the country as a whole?
No responsible government, no society which believes in law and order, can tolerate this situation. Many long years ago a cry was uttered in this Chamber which is very apt to this occasion. It was said quite simply, "I call upon the honour of your Lordships to save us from this pollution". Those who cling to belief in the dogma of jury trials in serious fraud cases will have to answer that challenge.
It will be said that one of the reasons for chosing 12 persons at random—the sort of random selection to which I have referred—to hear serious fraud cases is that they know the difference between honesty and dishonesty. Nothing could be further from the truth. We have been administering justice in this country for centuries. But up to this point of time there is no definition in the statutes of what honesty or dishonesty means. There have been numerous judicial decisions, mostly conflicting, but the latest one which prevails—of only two or three years ago—still leaves the matter in confusion. This is all set out in Chapter 3 of the report. If the judiciary are unable to decide what is honest or dishonest, how much more difficult must it be for 12 persons chosen at random, and particularly so when they have not even been able to comprehend the evidence.
While we were sitting on one occasion a judge came to us hotfoot from the Old Bailey. He had just been sitting on a fraud case lasting 20 days. At the end of this, the jury came back from the jury room on two occasions and asked his Lordship to explain what honesty and dishonesty meant, which he did with 42 painstaking care on both occasions. They were still in a muddle and eventually they compromised at six-all and the trial was aborted.
One essential and vital characteristic of justice is that it should be frank and open. We abandon this basic principle in jury trials in complex fraud cases. In most serious crime the decision is usually fairly black or white. Did the accused stick a knife into the other man or did he not. Did the man rape the woman? Did the accused break into the premises? These are not the issues in a complex fraud case. First, it is necessary to decide whether the financial statutes have been breached—and they are complex enough in any case. Have accounting standards been ignored? What then is the custom of the market? And the custom of the market in these cases is extremely complex, has never been written down, and is very difficult to discern.
Then it is necessary to trace over a long series of transactions, through company after company in different parts of the world, how, when and where the fraud took place, because very often these transactions start in an innocent way. Finally one has to decide with regard to each of the accused in the box as to when the intent to deceive first arose and to which of them it applied and precisely when.
In practice all these complex decisions are decided in secret in the jury room and we do not know the reasons. The City is becoming exasperated by seeing fraudsters salting away millions of pounds either at home or abroad, causing big losses which fall on the creditors and lead to unemployment; yet if and when they are brought to trial decisions are made to acquit, no reasons are given, and nobody can understand why. I suggest that this is a situation that also cannot be tolerated. It does not amount to justice; it amounts to a lottery.
One of the big advantages of the recomendations of the committee's report is that the tribunal, we suggest, should have to give the reasons for the decisions they come to. They should have to give the reasons in writing, and those reasons, and the facts which they set down, should be subject to appeal. Then, and then only, shall we get justice in these complex cases.
Time is against me. There is a great deal of argumentation that I should like to put before your Lordships of a similar character to that which I have already mentioned. However, I wish to finish on one note only. The great bulk of the people who clung obstinately to the idea of jury trials in these complex cases showed a curious hesitation in most of their evidence. That was most noticeable. Again and again, having pronounced firmly in favour of jury trials, they put forward an alternative plea and suggested that perhaps the jury trial procedure could be improved.
A large number of recommendations were made which amounted to some kind of special jury. For example, one revolutionary suggestion was that jurors must read and write. Others thought that "O" levels would be adequate and some thought that jurors should have "A" levels. Others put forward that jurors should even have university degrees. Some thought that there should be a single judge, while others thought that there should be three judges. One suggestion was that the judge should retire with the jury to arrive at the conclusion.
43 We examined all those proposals with care. Some of them did not seem to be very practicable. We eventually concluded and put before your Lordships for consideration that the best solution was three people with appropriate skills; that is to say, a competent judge and two others—laymen—all of whom had three vital qualities: integrity, competence to do the job, and power to comprehend the issues at stake.
§ 5.41 p.m.
§ Lord Hutchinson of Lullington
My Lords, I should like to begin by saying how much I enjoyed the speech of the noble and learned Lord, Lord Griffiths. I noticed a hint of controversy from him, as I might have expected—on the Buchan scale I should say that it was about five in a 100. I heard him say that he had no memory of the peremptory challenge. I know that judges go very quickly into their ivory towers, but I did not know that the judicial memory was quite as short as that. The speech of the noble Earl was like a breath of fresh air in the heavy vocabulary of the law, and I enjoyed that too. I only wish that his ancestor—Erskine—was here for this debate because I am quite sure that he would be on my side as regards some of the more controversial matters to which I intend to refer.
I am glad to say that with very few reservations I can welcome wholeheartedly the procedural changes recommended in Chapters 2, 4, 6, 9 and 10 of the report. Indeed, I would bless the majority of the 112 recommendations. That is not surprising—although it may be surprising to the noble Baroness, Lady Phillips—because many of the recommendations and ideas which are pursued stem directly from the 65-page document which I am holding in my hand and which was issued by the Criminal Bar Association as long ago as 1980, a copy of which has since then been lying gathering dust in the department of the noble and learned Lord the Lord Chancellor.
§ The Lord Chancellor
My Lords, perhaps I may interrupt my noble friend. He must know that the noble and learned Lord the Lord Chancellor is not responsible for the criminal law and procedure: the Home Secretary is responsible. Wherever else that document has been gathering dust, it has not been doing so in my department.
§ Lord Hutchinson of Lullington
My Lords, if I may say so with the greatest respect, the recommendations were directed to improving and accelerating the procedures in the courts for which my noble and learned friend the Lord Chancellor is responsible.
§ The Lord Chancellor
My Lords, I am sorry to interrupt again but the procedures in those courts are Home Office responsibilities and not the responsibility of the Lord Chancellor. My noble friend may not believe it, but that is the truth and there are at least two persons who have held that office who know it to be true. My noble friend really must get his A, B and C of constitutional responsibility right.
§ Lord Hutchinson of Lullington
My Lords, one understands where the dust came from. As regards Chapters 5, 7 and 8 of the report, I am afraid that I must introduce a discordant note. I found those chapters disappointing and at times even deplorable. I found the language tendentious and the argument very anecdotal. There is much special pleading and rhetoric abounds. The main characteristic of those chapters is their deafening silence as to the nature of the evidence which the committee received. In the argument—which mostly descends into advocacy—there is no attempt to summarise, analyse, or to assess the evidence, in spite of our having heard today from the noble and learned chairman that the committee evaluated the evidence.
From the first request for evidence we see how the committee saw its task. It said that it saw as its principle task the review of the present system of jury trial in the light of the evidence it expected to receive. Although that was the committee's view, at paragraph 1.3 the report says:It soon became evident, from the volume of evidence we received, that …[the] main criticisms … related to the administrative and legal procedures presently in force".In other words, there was little criticism of trial by jury, but much criticism of the preparation and presentation of the evidence for the jury.
I hold the noble and learned chairman in great admiration and affection and, if I may say so, I know him well enough to realise that any strictures of mine will come to him as no surprise. Some months before his appointment as chairman he delivered the Denning Lecture and he roundly and publicly condemned jury trial as appropriate for complex fraud cases. Indeed, we now hear that so had the Lord Chief Justice. I cannot help but feel when reading the report a sense of chagrin and even of mortification flowing through it at the weight and the direction of the evidence received.
Surely the first task of an independent and impartial committee of inquiry—and many of us in this House have served upon them—is to discover from the evidence the extent of the problem and then to advance the remedies. The light of the evidence shines very dimly indeed in Chapters 5, 7 and 8, and with great diligence I have dug out and assembled the few serious references to the evidence in the report. First, there is no accurate evidence to establish that there have been any doubtful acquittals or convictions in fraud cases. Secondly, there is no accurate evidence to establish whether any retrial has been caused by jury disagreement. Thirdly, there is no accurate evidence to establish that juries acquit more often in complex cases. Indeed, from Appendix K they appear to convict more often. No doubt the Commissioner of the Metropolitan Police told the committee that he obtains the remarkable figure of 90 per cent. conviction in fraud cases. There is no satisfactory evidence of any significant number of cases not being prosecuted for fear of jury incomprehension, in spite of what we have just heard from the noble Lord, Lord Benson. Indeed, those words come from the report itself. At page 193, paragraph C9, we discover an analysis by the Director of Public Prosecutions in 1983 of 179 cases of which one fell into that category.
As we have heard, the committee could give no precise definition of a complex fraud case as opposed 45 to an ordinary case for which they favoured jury trial. The best they could do was to lay down guidelines—28 of them—in an appendix at page 153. However, on the evidence, they were unable to ascertain how many would fall within those criteria—very few indeed, said Mr. Merricks in his dissent. Today we have heard from the noble and learned chairman that there would be about 30. Appendix J establishes that from 1979 to 1983 there was an average total of 20 long fraud cases in England and Wales. So it appears that the problem affects a very small number of long cases in a year.
In Appendix A we also discover—and it has to be dug out—that the committee very properly initiated a survey of these long cases. Its purpose was to discover the length, the offences, the results, the status of the judge, the number of re-trials, the occupations of the jurors, the pre-trial reviews, and so on. The results of that survey, the committee blandly tells us, are,noted at various parts of our Report.In fact there are three notes, each of them only to the length of trial. As to the results of that report and of that research, another deafening silence. One wonders whether the results were inconsistent with the rhetoric.
Only when we read Mr. Merricks' devasting dissent do we find the facts which have already been referred to, that the overwhelming evidence of all those closest to the existing system, all those charged with working it at the coal face, as it were, favoured the retention of jury trial. It is only in this minority report, amazingly enough, that one can find reference to the profoundly important constitutional issues raised with the committee by our greatest living authority on jury trial, the noble and learned Lord, Lord Devlin, in evidence to which I shall return later.
In Chapter 4 I find the proposed new procedure of a transfer certificate on an application, if desired, to a judge for discharge an imaginative idea. I hope if it is adopted that the opportunity will be taken to reconsider the basis for committal, because at present a magistrate, if he finds the evidence which is presented is such that a jury, properly directed, could convict, then must commit the case whatever he himself may think of the evidence.
The Royal Commission on Criminal Procedure recommend all prosecution authorities to adopt the DPP's criterion for launching a prosecution; that is, is there, on the balance of probabilities, a reasonable prospect of conviction? If the judge in this procedure could adopt that principle, then cases could be stopped, and money and trauma saved, if he, the judge, considered the evidence was unreliable or too weak.
In Chapter 6, the preparation for trial, the committee generously acknowledged its debt to the Criminal Bar Association in basing its improvements on the pre-trial review which was initiated at the Old Bailey 12 years ago by the Criminal Bar. I naturally welcome the reforms proposed with enthusiasm.
The most controversial and revolutionary of those proposals is defence disclosure before trial. It is right to place on record the origin of that idea, because the words in the CBA report of 1980 were these:It is possible to impose extensive disclosure obligations on the defence without offending against the principle of the right to silence and the burden of proof".46 It is right that those words should go on the record, because there was no rigidity in that area of criminal trials.
It is from that standpoint that those proposals, in my submission, should be carefully examined. I too, as the noble and learned Lord, Lord Elwyn-Jones, said, am unhappy at the form of the sanctions for failure to disclose, or for misuse of the information by the prosecution, at paragraph 6.79 and 83. Here there looks to be an attempt to return once again to parts of the iniquitous 11th Report of the Criminal Law Committee which was so effectively killed in this House 10 years ago. In passing, I might say also that it is a different situation from the alibi defence, because of course in the alibi defence there is no question of the jury drawing inferences if there is a failure to disclose in that sense.
I now turn to the unacceptable points of this report, Chapters 5, 7 and 8. Chapter 5, changes in the rules of evidence. These changes simply will not do. As a radical lawyer I strongly support sweeping away outdated and technical rules, and some sensible progress was made in Section 67 of the Police and Criminal Evidence Act to that end. But here the rhetoric and special pleading pour forth like lava.
The strict standards observed in criminal trials are swept away. As the advocacy abates we are left with the radical new rules starkly revealed:Let all documents speak for themselves as to the truth of their contents. Admit everything, and leave it to the judge to decide what is fair".The problem always is, how far can we relax the hearsay rule? Where the liberty of the subject is concerned judges have been strict in disallowing statements such as, "I was told by X that Y did it" or, "This letter alleges that Y did it" because such, if evidence, is inherently unreliable, capable of easy manufacture, and more so in fraud cases than in any other, and it is not subject to cross-examination.
In crime the incentive to give unreliable or perjured evidence is far higher than it is in civil cases, and yet we find no calm discussion of this difficult question in this report. We are told at paragraph 5.3:The layman regards [it] as astonishing … lawyers' nonsense".The layman, in everyday life, takes decisions of importance on what his subordinate has been told by another subordinate; phraseology perhaps as revealing as the, "Would you give it to your servant?" in the Lady Chatterly case.
The report says:We have been toldof defendants who refuse to agree documents solely to prolong the trial, confuse the jury, and "play the system". Where does this anecdotal evidence come from? Was there no judge in charge of the proceedings?
This unworthy rhetoric ends with this radical new rule:Let all documents speak for themselves".Therefore, we are to enter the age of the speaking document: oh, blessed commercial document; blessed commercial witness; no perjury; no prevarication; no oath or affirmation; no tedious cross-examination, just the simple purity of the commercial document. My 47 Lords, I suggest that we have a sensible committee, or the Law Commission, come up with some workable recommendations rather than those in Chapter 5.
On jury challenges, here the rhetoric reached hyperbole. At paragraph 7.15 we are told that the right to challenge is rooted in the past when most offences were capital and—notice the irony in view of the Ponting case—when judges were less concerned to protect the interests of the possibly innocent than to uphold what they sincerely believed were the interests of the State.My Lords, plus ça change.
We then pass to juries being "rigged", "tactical exercises", "cynical abuse", "manipulations of the system". Can this really be the proud profession which I have known for over 40 years? Or is this not the Roskill but the Rumpole report that I have been reading? It is like a worm's-eye view of the Old Bailey from Lincoln's Inn.
The innocent accused gets no mention in this report. He is a non-person. But when he enters the dock he has no knowledge of, or say in, the selection from the small group comprising the panel from which his jury will be chosen. When confronted with the 12 selected he may find all are over 50, all are under 25, all men, all women, all white, no black, all from one area of his own locality or all from one income group. Some may appear just hostile. The right to challenge is absolute in the face of the court for the benefit of the accused to allow him, against whom most of the cards are stacked, to have a say in obtaining what he considers a more representative jury. He cannot select. He can only remove.
Perhaps the noble and learned Lord the Lord Chancellor, and even my noble friend Lord Wigoder, would accept the view of a Law Officer in the present Government, a man of the highest honour, who has actually practised in the criminal courts, Sir Patrick Mayhew, who says:Counsel have a right and a duty to use this 600 year old right … as they conscientiously think best in the interests of their clients … together with all other lawful needs".When is a right not a right? When it is exercised?
It is another reflection of the decline in the standards of public life, of this Government and party opposite, that members of another place not liking the verdicts in the Ponting and Cyprus cases, publicly attacked the juries concerned and sought to pin on them the failures of the prosecutions. Such arrogance and contempt for the institution that lies at the very heart of our law and order system is unforgiveable, I suggest.
Lord Devlin said:It is the sovereign power of acquittal which gives the jury its place in the constitution".Blackstone warned of the danger of autocratic governments and superior persons gradually sapping and undermining the jury system. In recent years this process has gone far enough. I agree with Mr. Merricks that to substitute as a sop the peremptory challenge with a challenge for cause will only bring the judge down into the arena and the American system into our courts. This right of peremptory challenge, I would submit, should be preserved.
Finally, to Chapter 8 and what I would call this half-baked idea of a special tribunal. The committee 48 discloses its view of the jury, the one institution that guarantees for all of us within the law that liberties will prevail, what the noble and learned Lord the Lord Chancellor has called the palladium of the constitution.
At paragraph 8.22 we are told:Society appears to have an attachment to jury trial which is emotional or sentimental rather than logical".Logical, like our attachment no doubt to habeas corpus, to parliamentary government, to the monarchy and even, if I may say so, to the Leader of this House. Then:in almost every area of the law, society has accepted that just verdicts are best delivered by persons who are qualified by training, knowledge, experience and integrity".We have heard this from the noble Lord, Lord Benson, this afternoon. Then the final pearl that drops from this committee:In our opinion the absence from the jury box … of persons with these qualities seriously impairs the prospects of a fair trial".Here lies the true heart of this report, this philosophy, as we have heard from the noble and learned chairman, of special skills, What a cavalcade of intellectual arrogance and effortless superiority, my Lords! Who are these paragons, these demigods who are to replace the common riffraff that we find in the jury box? Why, my Lords, first, Her Majesty's judges and in paragraph 8.61:Persons … hand-picked [by the Lord Chancellor] after a careful process of enquiry and vetting".These angels of moral rectitude reared in the pure atmosphere of the City of London. 'I am the radical", claims the noble and learned Lord the Lord Chancellor introducing this report on 14th January. We have heard the same from the noble and learned Lord, Lord Roskill, today: "I am the radical". Radical, my Lords, to deny one class of citizen of his immemorial right to trial by jury on the order of the judiciary?
§ The Lord Chancellor
My Lords, I did not want to interrupt the noble Lord in the midst of his rhetoric and special pleading, but I said at the beginning of this debate that the whole subject was wide open to discussion, that attitudes should not be taken from which it was difficult to resile with honour and that my mind was open to arguments.
§ Lord Hutchinson of Lullington
My Lords, in those circumstances I am encouraged to continue, particularly to all your Lordships with open minds. To deny one class of citizen his right to trial by jury on the order of the judiciary, to impose upon him trial by a judge chosen by another judge and flanked on one side by Mr. Price and on the other by Mr. Waterhouse, is that radical? Where would this kangaroo court lead us? Let us imagine Sir Balance Sheet, the City financier, acquitted on a majority decision with the judge dissenting. What standard of honesty was being applied, that of the City of London? There would be no public summing up, there would be no public direction. The press and the public would understand nothing of the cosy exchange between the commercial counsel and the court. Let us think of the gossip in the Temple in those circumstances and in the coffee bars of the City, the leaks and scandals in the press.
Supposing Mr. Profit and Miss Loss—Sir Balance's subordinates enmeshed in a mountain of hearsay 49 paper created by Sir Balance to cover his tracks, paper speaking the truth loud and clear—were convicted, after a struggling ill-paid young counsel on legal aid had conducted a poor cross-examination on the video satellite link. Let us suppose there was conviction against the wishes of the judge. Let us suppose the judge were the Recorder of London and that the defendants decided to appeal to the Court of Appeal, to the judge's own colleagues. My Lords, what embarrassment, what tittle-tattle in the Temple! This half-baked idea would rightly plunge the criminal process into disrepute.
I end by reference to paragraph 8.13 where the committee refers for support for its new tribunal to some informal evidence that had come its way. Informal evidence, my Lords? Gossip? What of the most vital formal evidence before the committee, to which no reference whatever is made, from the greatest expert on jury trial, Lord Devlin? I asked to see this evidence before the debate, but I was told by the secretary of the committee in the Lord Chancellor's office that it has not yet been put into the "public domain" and therefore was unavailable. But I have it here, and I intend to end by quoting three short and separate passages from it, having observed the traditional decencies of my profession and asked and received permission to do so.
The noble Lord is speaking of the abrogation of the citizen's constitutional rights to trial by jury. He said:Trial by jury forms part of the political compromise that we have made between arbitrary and popular government. 'Arbitrary, in this confrontation means the rule of those [for instance] the judges, who are not answerable to the electorate".He goes on to say:Not since the glorious revolution of 1688 has a citizen been imprisoned for any substantial time … longer than the short sentence for summary offences, otherwise than on the verdict of a jury".Finally, he says:There is no room in the criminal law for the idea that a case could be too complicated for a jury to understand. To refer a case for decision to a body of experts or even to men and women of superior mental powers would mean that the person accused might be imprisoned for ten or fifteen years or for life, for reasons which could not be made clear, to the average citizen. This is not democracy. This is what trial by jury prevents".In America, jury trial is protected by an article of the constitution. Here, it is only we in Parliament that can guarantee its integrity.
§ 6.10 p.m.
§ Lord Wilberforce
My Lords, we are getting a little behind time and the hour is getting late. I cannot deny myself the pleasure first of offering very sincere congratulations to my noble and learned friends and colleagues, Lord Roskill for his report and Lord Griffiths for his splendid maiden speech. I congratulate them most heartily.
It is also a great pleasure for me to be able to follow the noble Earl, Lord Buchan, because my own ancestor, who was the contemporary of Lord Erskine, Lord Chief Justice Denman, was just as wholeheartedly wedded, as was Thomas Erskine, to trial by jury. Therefore I hope that that great principle is as much in my blood as it is in the noble Earl's. I greatly enjoyed and appreciated his speech.
50 I do not propose to follow, even if I could, the rhetoric and special pleading argument which we have just heard from the noble Lord. Rather abandoning the somewhat Alice in Wonderland conjurations, with which he amused some of your Lordships and perhaps terrified others, I intend to concentrate on two rather prosaic points. Perhaps I may say at this point that I hope the noble Lord, Lord Glenarthur, will acquit me of discourtesy if I am unable to stay quite to the end of the debate on account of an engagement.
Those two points are the preparatory procedure before trial and the mode of trial, the former, preparatory procedure, being in my view, a view which I share entirely with the noble Lord, Lord Wigoder, by far the most important of the two. If I may, I will deal with these points from a particular point of view, namely that of the Corporation of Lloyd's, which has been named very much in relation to fraud charges and which figures in many places in the report. I have not, and never have had, any financial interest in Lloyd's Corporation, but I have been for the last three years independent chairman of their appeals tribunal in disciplinary matters. As such, I have been brought very closely in touch with a number of important proceedings which have been taking place.
As your Lordships probably know, while the prosecution machinery, through the director, has for understandable reasons not been moving very fast, Lloyd's Corporation, on the other hand, has been actively pursuing cases of misconduct in relation to its own members. Out of 18 such cases which have been referred to the tribunal since the Lloyd's Act 1982, six can be categorised quite certainly as cases of serious fraud. They have been tried by what the noble Lord, Lord Hutchinson, has just called a half-baked kind of tribunal or a kangaroo court, namely, a lawyer president with two assessors, the lawyer being a commercial QC with experience of financial matters and the two assessors being gentlemen of particular experience in the market. I think that their experience may be of some use to your Lordships and perhaps to those who will have to decide upon the report.
Of course it is true that the proceedings in Lloyd's are disciplinary proceedings, not criminal proceedings. It is also true that the defendants are not in danger of losing their liberty. But they are in danger of losing their livelihood and, what is more important, their reputations. The charges are charges of fraud in a truly criminal sense. The standard of proof accepted by the Lloyd's tribunals is the same as that in criminal trials, namely, that proof must be beyond all reasonable doubt. Thus, I think it may be justifiable to say that experience in this area is of relevance here.
Perhaps I may deal first with a few general points because I should like to put the question of complex fraud in rather a wider setting than it has been put up until now. First, fraud is a very wide concept. There is hardly any human action which cannot be committed either honestly or dishonestly. One can have fraud right down the spectrum. The report in Appendix F, at page 226, has given examples of different kinds of fraud. They are, of course, extremely varied. I think no one would dispute the general proposition that if a man is accused of fraud, is going to lose his reputation or, still more, his liberty, he is in principle entitled to be tried by a jury.
51 Within this very wide category of fraud, there is undoubtedly, I should suggest, a genus of financial or economic fraud, and that is a recognisable genus. Financial and economic fraud is not peculiar to any country. It is not peculiar to any square mile. It is not peculiar to any particular institution or room within any particular square mile. There are conspicuous cases in every country. I can mention only a few, which your Lordships will instantly recognise.
In the United States there are a great number of banking frauds. At the moment, the best known one which is going through the courts is what is called the Pine Top case, which is concerned with amusement parks. It is a fraud of 21 million dollars. In West Germany in 1984 there were reported 500 cases of financial economic fraud, of which over 70 per cent. were the subject of proceedings or settlements. At the present time, they are grappling with a worldwide famous case called the Von Galen case. In Spain there are the Ruiz Matteos proceedings, a huge complex of proceedings which are going to occupy the courts for every bit of 10 years. In the Far East there is the Pan Electric matter, which has rocked the whole economy of Singapore.
We in this country, as international traders, who have always traded on a good faith basis, have to take this disease very seriously. We have a duty to remain in front, as I believe we are in front, of other nations in the pursuit and prosecution of fraud. To pretend that it is a British disease is to render no service to our economy. It is not: it is a worldwide disease. There is much more to it than even City fraud. If I have any complaint against the wonderful report, it is that perhaps it focuses a little too much on City fraud. There is much more to complex fraud than that.
One very big area is marine fraud, which is mentioned in the report. That is estimated to lose £1 billion a year. The noble and learned Lord, Lord Elwyn-Jones, gave the figure of three-quarters of a billion for fraud in general. Marine fraud, on the best estimate, alone runs at £1 billion a year. That is now extremely sophisticated. One does not now, as one did in the days of Demosthenes in his private orations, just scuttle a ship. A ship is of no value nowadays; there are far too many of them. What one does is enter into very complicated and sophisticated transactions about the cargo. One sells it many times over by forged bills of lading and other documents. The noble and learned Lord of course knows this extremely well. There is an example about which all your Lordships will have heard. That is the Salem case, in relation to a ship which was sunk in January 1980 and which has been the subject of proceedings in Greece, the United States and Rotterdam.
Then there is revenue fraud, a huge category; VAT frauds, very ingenious frauds involving manipulations of accounts, duplicate accounts, use of companies and so on, very ingenious and clever matters indeed. The only point that I am trying to make is that we are not just concerned with a few City scandals. This is a general phenomenon found in many areas in many parts of the world. It is a case of financial, economic fraud. Within that genus, financial economic fraud, I believe—and I share that with the report entirely and with other noble Lords who have spoken—that there is 52 a species which one can call complex, financial, economic fraud. That is a function of the internationality of commerce nowadays; it is a function of increasing technology. I was very glad to see that the committee included among its members, Mr. David Butler, a well-known expert in this subject of information technology. It is a function of inflation, it is a function of the existence of controls, sanctions, high taxation—areas in which the rewards of escaping from them are very great indeed. Usually this complex species of the genus financial, economic fraud has an international dimension. It involves the use of foreign companies.
The noble Lord, Lord Benson, whose speech I greatly enjoyed, gave some examples from his experience. Perhaps I may give just one or two from the Lloyd's experience. In one of their cases there were 150 companies involved with unidentifiable shareholders. There were trusts in Liechtenstein, with Swiss lawyers acting as directors, usually on verbal instructions which one cannot find recorded anywhere. You have huge files of documentation. The noble Lord, Lord Benson, gave his example in terms of metres. I shall give mine in terms of numbers. There was a case referred to by the Attorney-General the other day which involved no fewer than 1 million documents and in the PCW case (which as your Lordships know was one of the biggest Lloyd's cases) there were no fewer than 300 files.
So, although it is difficult to define in precise terms what is complex fraud, one cannot deny its existence unless one is simply flying in the face of facts. The report has done its best to give a definition in the guidelines in Page 153. Of course, any competent lawyer could shoot many holes through them; they are not definitions of precision. "High finance" is descriptive as a term but hardly one of legal accuracy. But in my belief these cases are capable of recognition. There are cases as to which one can say with confidence that they are beyond the comprehension of many judges, many lawyeres and most if not all jurymen. No doubt, there are not many of them. One may argue as to how many there will be. I should rather be on the side of the noble and learned Lord, Lord Roskill, on this.
The question is going to be ultimately for the Government to decide—and I do not envy them the decision—whether there are enough of them or whether the numbers of them are of sufficient gravity to justify a reformed procedure. And then, whether a reformed procedure if introduced in this area, is going to infect or currupt the rest of our legal system.
Now to my two points; and they will come very quickly. First of all, preparation. Undoubtedly, this is the key to the whole matter. On this, the report must surely be esteemed as very good, as excellent. All its suggestions are practical and wise. Lloyd's has in fact been using something very similar in relation to its proceedings. They hold preliminary hearings by the lawyer QC and, in the PCW case which I have just mentioned, we had six of those. The report of the noble and learned Lord contemplates similarly that there may be more than one. We had six in that case. And they take a sensible view about documents. They do not feel themselves fettered by legal rules, an attitude which of course is entirely consistent with acting in accordance with the law.
53 Just let me give your Lordships the timetable, which I believe is interesting, if one really tries to apply modern procedure. Charges were formulated in May of 1984. Of course, before that time there had been many massive investigations by the Department of Trade and Industry and other agencies. The charges were formulated in May 1984 and then, between June and October 1984—a period of four months—there were six preliminary hearings by the QC. The hearing took place in November and the verdicts were given in January 1985. If that proves anything—and I think that it does prove something—it shows that this system of streamlined procedure in front of this half-baked court does work and could be generalised into other cases.
One has to say unfortunately that its effectiveness will depend largely upon money; but one can console the noble and learned Lords who have to provide the money by the (I think) counter-argument that a great deal of money is going to be saved in court costs, and so on; not to count the money which is recovered in Revenue cases etc., which can be put on the profit side. So, in my respectful submission, this part of the report—and it is the major part—can be most wholeheartedly recommended, and I feel sure that its merits will appeal to those interested in getting proper disposal of fraud cases.
Now just a word as to the mode of trial. I believe that our experience with this court of judge and QC plus assessors does work. Nobody has complained about it; nobody says that it does injustice to anybody. It enables cases to be brought on and to be disposed of with reasonable expedition. The question may be asked whether it gets more convictions than a trial by jury would get. I am not sure that that is the right question because, as the noble and learned Lord on the Woolsack has said, the object of the proceeding is to do justice, to convict the guilty and to acquit the innocent. Simply to ask whether one procedure gets more convictions than another is not necessarily an answer to whether it should be adopted.
In any case, it is impossible rationally to decide whether any one procedure produces more convictions than another. Of these cases, I have seen one in which the tribunal convicted, in which I thought that the jury would very likely acquit. I have seen another case in which the tribunal acquitted, in which I thought that the jury very likely would have convicted. It is all a matter of speculation. I do not believe that one can form any judgment on that line of argument.
The main problem about setting up this tribunal in this case is that of definition, the one to which I have already referred. You cannot lay down a definite line; you cannot provide a firm form of words. But I believe that the report's solution is a wise one, a pragmatic one, one that can be worked; to leave it to a High Court judge to decide when the prospects of the trial are known. He should be given, I would suggest—and I do not think that this is contrary to the report in any way—a broad directive that trial by jury remains the rule in all cases where man is accused, and that trial by jury is only to be departed from if a case is clearly made out that justice can only be done by another procedure. If that kind of directive were given. I believe that would give a workable means of operation.
54 That very closely coincides with the suggested Hong Kong Bill, which your Lordships will find on Page 218 of the report. You will find there that the chief justice in Hong Kong was given power to order trial by judge and three commercial adjudicators where he was satisfied that—and then on that page there are three considerations set out corresponding to what I have just said. That has not yet been accepted by Hong Kong. It has been resisted by the lawyers but it is something which I would suggest deserves consideration.
On one final point, as has already been said, this particular kind of procedure has the merit from the point of view of the accused person of admitting an appeal. Reasons are given, they can be challenged on appeal. We have an appeal procedure, and from our experience I think I can say that it works. There is not a flood of appeals. The working of the appeals procedure and the dealing with the appeals when they come is a perfectly respectable and acceptable legal process.
I do not think that I can take this particular line of argument any further. Broad issues of constitutionality and what is politically possible are involved. They are matters which will have to be decided elsewhere after hearing the whole of the debate. I thought it worth while giving your Lordships some concrete observations on the system in practice which might illustrate the merits and strength of the report.
§ 6.30 p.m.
§ Lord Denning
My Lords, in the earlier discussion I said that I congratulated my noble and learned friend Lord Roskill and his colleagues on the report, and that I agreed with every word of it. Having reread the report, and having heard the most informative discussion in your Lordships' House, I still agree with every word of it and hope that it will be put into force. I should like also to congratulate my noble and learned friend: his exposition and his experience are of great value to your Lordships' House and I agree with every word that he said.
I congratulate also the noble Earl on his great ancestor, Thomas Erskine, the great hero of trial by jury. Time after time I have supported and quoted that great advocate—probably the greatest advocate that the English courts have known. But, my Lords, 200 years ago trial by jury was so different. Our society and our commerce were different then before the Industrial Revolution. It was a simple, uncomplicated society. The jury had to try a few pleas—the murders, the burglaries, the rapes; and maybe seditious libel occasionally, on which Thomas Erskine was so good. Perhaps there might have been simple frauds; but that was the lot
Jump now over 200 years, and hear what my noble and learned friend Lord Wilberforce has told you of the finance and commerce of today. If your Lordships only knew what I have seen! The limited company only started in 1862, 100 years after Thomas Erskine, and the limited company in this country and all the countries of the world is the most prolific instrument of fraud, with people switching from one company to another, and so on. All sorts of fraud are done through limited liability, which only came into existence a 55 hundred years ago and has only come into its great pre-eminence throughout all the countries of the world in the past 30 or 40 years, with all the frauds connected with it.
Some 200 years ago there was hardly any insurance. Edward Lloyd, I think, had only just started his coffee house handling a little marine insurance. Banking was in its infancy, with a few family banks. It was largely an agricultural society. We have a transformation today, when we see these financial and commercial frauds. My noble and learned friend Lord Griffiths gave a good illustration of switching between this company and that, going overseas. I have seen it myself, and my noble and learned friend Lord Wilberforce knows more about this than anybody. There are frauds all the world over—complicated frauds, switching from this to that, with people putting their money into numbered bank accounts in Switzerland where it cannot be got at. I have seen people who, having committed fraud here, have gone off to Germany before they could be arrested.
We have seen all these things, and it is imperative that our legal system should be modernised so as to cope with this great modern disease. That is why I am afraid we have to leave trial by jury and we have to replace it by a modern instrument. The example has been well shown by my noble and learned friend Lord Wilberforce, and of course it has been given in Lord Roskill's report: namely, have a judge, experienced in these matters, and two good laymen who are also experienced in these financial matters, who can unravel these frauds. I would support that entirely.
I should like to mention this right of peremptory challenge. It is high time it was abolished. Let me tell your Lordships how it started. In Blackstone's day it was only available for felonies if capital punishment was involved. It was not available for misdemeanours or for frauds. If a man was being charged with an offence such as murder and the like, for which he could be hanged, then of course give him every chance. He might know some of the jurors in those days. Let him have a peremptory challenge and object. He had nearly an infinite number then: I think he could go up to 23. That is how it all started; and when I was practising at the Bar, and even when I was a judge, I never heard a single peremptory challenge and I never had one made to me. That was in the good old days.
Jurors were not then any old chap on the voting list: they had to be householders. They were mainly small tradesmen and people from our country towns and villages. As Lord Devlin put it, they were all male, all middle-class and middle-aged, and they dealt with their cases splendidly, if I may say so. There were no peremptory challenges used then; but now the position has been transformed. First, everyone is entitled to be, and is, on the voting list from 18 to 65. Also, in the old days the sheriff or his officers used to know the occupations of the individuals. In a big and complicated fraud case I tried at the Old Bailey I had a first-rate set of jurors. Of course we knew their occupations: they were bank clerks, insurance clerks, and so on. We finished it in six weeks and they convicted in a couple of hours. We could do it all right in those days; but now, with everybody on the voting list, the person who selects them, or the clerk, does not 56 know their occupations anyway. He just has to run them off on a computer and they turn up in the court and there you have the panel—youngsters of 18 or 19, girls and boys, people of all sorts and descriptions—and a very good jury when they turn up, if you please. Those are the kinds of people that you have.
What happens with peremptory challenge is that I am afraid counsel (they think it is their duty) will challenge anyone if they think it convenient. They will say, "We will challenge anybody who looks as if he understands a bit about the case". They say "Object" to anyone who appears well dressed and who may have a paper under his arm such as the Financial Times, and so on. Or they sometimes do it—they ought not to do it—by the colour of the skin or whatever the reason may be. Counsel object in accordance with what they think are the best tactics; and so we do not really get a random jury. We have a jury which the defence have had quite a good say in selecting. So I suggest that it is high time to change and that peremptory challenges should be abolished. It should not be left at three, or even one; but of course you keep the challenge for cause. If there is any good reason, let them challenge and let them put the reason; but let the peremptory challenge go.
The other remaining thing is the right to trial by jury. I have said that I hope to show how heartily I agree with what has been said of the complication. My noble friend Lord Benson and my noble and learned friend have said that these cases are far too complicated for the ordinary jury to understand. Little girls of 18 or 19, or old men of 60—it does not matter who they are—do not understand. In principle, you should have a jury which can follow the evidence and give a verdict in accordance with it. You simply cannot get that with a jury raised as it is in these days, and the only reasonable alternative is that which is suggested by this report.
I would finish with one word more, because this is an important matter. The report points out the difficulty of getting a firm to report a case to the police. The report states in paragraph 2.6:The early discovery and reporting of fraud to the appropriate authorities is crucial to the chances of successful prosecution.The report states in paragraph 2.5:The failure to report fraud to the authorities is widely believed to occur, though its precise extent can obviously only be guessed at.If a firm or a big City institution is being defrauded, will it all come out in public? The reputation of the firm may be harmed a great deal. Is it not better to get the money back if you can? Is it worthwhile going to the expense and trouble of a trial with all the uncertainty of a conviction from trial by jury? I am afraid that in a lot of these cases the firms do not tell the police for one reason or another. The report states:There is no legal obligation upon victims to report fraud, unlike in the United States, where any fraud on a financial institution involving more than $5,000 dollars must be reported".That does not arise on this report. But it is almost a public duty to report fraud to the authorities so that they can take appropriate action. So I hope that this report will be welcomed and implemented.
§ 6.43 p.m.
§ Lord Edmund-Davies
My Lords, by my standards the hour is already late. I hope that I may be forgiven 57 if I confess that I set out to be brief. Generous tribute has rightly been paid to the noble and learned Lord, Lord Roskill—not Lord Rumpole—and his distinguished committee for the remarkable report that they have produced; a report which is stimulating to a great degree. It raises points some of which are startling and many of which are controversial.
I tell your Lordships at the outset that whatever preconceived ideas I have—others have prejudices; I have ideas—I am not going to let my conclusions be at all determined by those preconceived notions. I set out, as the noble and learned Lord on the Woolsack adjured us to do, to keep an open mind not only until this present debate has ended, but also so as to give myself time for reflection on what I have heard. Then, ultimately, maybe some time ahead, I shall come to a conclusion and give my vote accordingly.
I seek to introduce a note of homespun quality and a new note. We have to remember that complex frauds take up a small but very important part of the considerations which the Roskill Committee had to review. There is a large array of fraud cases unaffected by, for example, the recommendation in relation to the dispensing of a jury. A vast number of fraud cases will continue to be tried with a jury. I have therefore decided to invite the consideration of this House, very briefly, to a matter which has not received the consideration of the committee, I suspect because if it ever occurred to them to think of the topic, which is unlikely, they might say that it did not strictly come within their terms of reference. It is:to consider in what ways the conduct of criminal proceedings … arising from fraud can be improved and to consider what changes in existing law and procedure would be desirable to secure the just, expeditious and economical disposal of such proceedings.I think I may claim in no vainglorious way to have had longer experience of jury trials, both as an advocate and as a judge, than any other Member of your Lordships' House today, not excluding, I believe, the noble and learned Lord, Lord Denning. That may sound tricky, but it happens to be true—
§ Lord Edmund-Davies
My Lords, accordingly I claim experience and knowledge of what I am talking about. There is one matter which has never received consideration before by any of those responsible for the designing and setting up of courts, nor of those who have used the courts. The jurors have received scant, if any, attention as to their comfort and their capacity to discharge their vitally important duties. A fraud case—it does not have to be complex—frequently involves the close and accurate study by jurors, unused to administering the law, of documents, complex up to a degree, informed and numerous in quantity. All of us know that when we do our paperwork we like a flat desk or, best of all, a kitchen table—some place where we can spread our papers and study them properly. No, my Lords, there is no court in the country where you will find proper provision made for the capacity of jurors—capacity to sit, yes—to do their work properly.
I recall one occasion when, as an assize judge, I arrived in a town and saw that one of the cases in the list involved charges of fraud. There were a certain number of documents to be studied. I had a look at the 58 documents and then told my clerk, "I want to see the court." The commission day was on the day following. We went down and, having seen the provision made in the design of the jury box, I announced next day when the High Sheriff arrived, "We cannot try that fraud case in the assize court. It is hopeless. It cannot be used. It is not fair to the jury and I am not going to try it." I asked, "Is there some other more convenient place in a building in this town? What about the council chamber?" We looked at the council chamber, and I said, "We will take the fraud case here and every juror is to have two pews allotted to him, one for him to sit in and look at the documents immediately under consideration, and the second for the spreading of the documents."
We did just that. I have no doubt that it contributed to what I regarded as a just verdict being arrived at. I cannot remember now, and it does not matter for present purposes, whether it was an acquittal or a conviction. I hope that long before—it may be the distant future—the matters raised by the report are determined, attention will be paid to the homespun note I am now sounding. Let us have proper attention paid to the jury; not only to their physical comfort but also to their capacity to do their job.
I said that I had not made up my mind. If I had approached something like a fixed stance then I would in all honesty have found myself obliged to abandon my fixed position in the light of the debate to which we have listened so far—and I am very conscious of the fact that there are five more noble Lords to be heard.
In relation to the matter of dispensing with a jury in complex fraud cases alone, I would find myself obliged to contrast, on the one hand, the splendid maiden speech of the noble and learned Lord, Lord Griffiths, and the equally arresting maiden speech of the noble Earl, Lord Buchan, on the other. I should have to contrast the rhetoric and delightful play of the noble Lord, Lord Hutchinson of Lullington, with the close analysis of the noble Lord, Lord Benson, in the course of his arresting speech. All those matters require reflection and I propose to give them that. My Lords, do see to it that the jury is properly looked after.
§ 6.52 p.m.
§ Lord Hacking
My Lords, I have three reasons for participating in this debate. The first two are personal. When I was called to the Bar in 1963 the noble and learned Lord, Lord Roskill, had recently been elevated to the High Court Bench. But thereafter there have been many occasions when he has shown kindness and interest in me, as he has with so many aspiring young members of both sides of the legal profession. Now, sadly for us, the noble and learned Lord has decided to retire from service in our judicial committee, although, happily, not from our Chamber. He and members of the fraud trials committee have put before us a thoughtful, balanced and thorough report. I therefore readily join with others in expressing thanks and gratitude.
My second reason for participating in this debate is also personal. More years ago than perhaps either of us wish to count, the noble and learned Lord, Lord Griffiths, who was then a leading junior member of the Bar specialising in personal injury work, was my pupil 59 master. He was also pupil master to many others. Indeed, At the height of his practice there was a positive parade of young pupils following him across the Strand in to the High Courts of Justice. But I believe I am his only pupil thus far to come to your Lordships' House.
Quite apart from the noble and learned Lord's qualities as a pupil master, for which I am still grateful, he was—and I have no reason to think that he has mellowed over the years, after hearing his speech in your Lordships' House today—a supreme and strong advocate for causes in which he believed. For those and other reasons I feel sure that this Chamber will be much enriched by his presence. I also hope that he will give me a little of assistance over the matter of latent damage, upon which I shall be addressing the House later this evening and, I anticipate, on other occasions during this parliamentary Session.
The third reason for my participating in this debate is that I have some experience of jury trials both in this country, after 12 years at the English Bar, and in the United States of America as a member of the Bar of the State of New York. Although the recommendation relating to jury trials in the Roskill Report is only one of many recommendations, as has been pointed out in this debate, and a limited one at that, it will probably continue to be the most debated recommendation.
We have concluded that in this country, in almost all civil disputes, there are better modes of trial than the use of a jury. Not so in the United States of America. In civil cases the jury trial still has extensive use and is causing chronic problems that even go to the economy itself—particularly in such fields as medical malpractice. So serious is the problem that the president of the American Bar Association, when I met him two weeks ago in Florida, was talking of setting up a special commission.
Nor is there universal confidence in the United States of America about the use of the jury in criminal trials: for example, the use of the grand jury. However, relating to the recommendation made by the noble and learned Lord and his colleagues in their report, the simple question is surely this: given a blank sheet of paper before us, would we have chosen a randomly-selected jury taken from the electoral roll for a trial to do fairness to both state and citizen in matters of complex fraud, whether those matters arise in a trial of a civil nature or of a criminal nature? For the reasons that have been so clearly expounded in the report, the answer to that question must be no.
I was interested to read in chapter 8 of the report a reference to the history of the jury trial. The truth is that our forefathers did not create the jury trial in anything like its present form. For example, when Henry II developed the use of jurors in the grand and petty assizes that decided questions relating to the right of possession to land, the jurors in those trials were expected to speak of their own knowledge, were given time to find out the facts, and were sent away if they were found to be ignorant.
Whatever history may tell us, and it is my submission to your Lordships that history does not support those who favour the retention of jury trials, certainly in complex fraud trials, this matter must be 60 judged on its own facts in 20th century England. That is precisely what I believe the noble and learned Lord, Lord Roskill, has recommended in his report in 1986.
§ 6.57 p.m.
§ Lord Templeman
My Lords, I too beg to support the recommendations of the Fraud Trials Committee. The report is so omniscient and so exhaustive that it even copes with the homespun point raised by my noble and learned friend Lord Edmund-Davies. Paragraph 9.26 is a plea for the facilities for witnesses to be improved, and paragraph 9.27 is a plea for the courtroom to be made large enough to house not only the innumerable counsel and their solicitors about also the tons of correspondence and papers that proliferate in the course of a long fraud trail.
The report of the committee is a fitting finale to the long career of public service of my noble and learned friend Lord Roskill. There runs through the report one main theme that has evoked a remarkable degree of agreement among those who have spoken. That theme is the need to select persons with training, experience and ability. The report recommends that the investigation of fraud should be undertaken by legal administrators or administrative lawyers chosen for their training, experience and ability—and no one disagrees.
The report recommends that prosecutors be similarly selected for such qualities—and no one disagrees. It recommends also that judges charged with the supervision of such trails should similarly be chosen for their expertise—and no one disagrees. It is logical that the report's final recommendation on that topic is that the tribunal that decides such matters should also be composed of persons of training, ability and expertise.
Your Lordships have heard from my noble and learned friend Lord Wilberforce of the widespread ramifications of fraud trials and the reasons for thinking that it is no longer right to have complicated cases of fraud tried by juries. Your Lordships have heard also what was, I thought, rather sneeringly described as the rhetoric of the noble Lord, Lord Benson, which I however would describe as the honest indignation of a man who comes afresh to see what goes on in law courts, is astounded by what he sees, and wants to put it right.
I add only two further comments. First, I understand that there are now in progress at the Old Bailey trails in which there are alleged VAT frauds. One or more of that series of trials is expected to last 18 months. Those of your Lordships who have had occasion to study the VAT regulations and those who have had occasion to find out the ingenious methods by which such frauds can he perpetrated will find it no disparagement to the jury system to suggest that the burden of those cases should be removed from juries.
My experience over the past 30 years has encompassed fraud—not fraud in criminal courts but fraud in civil courts. Throughout that period fraud cases were tried by a judge alone without the assistance of a jury. I have never heard it suggested that the results achieved by those judges were any worse than the results achieved by juries in criminal trials. In such fraud trials a man's reputation and his livelihood are at 61 stake. True enough, he cannot go to prison, but he risks, and fights for, everything in those courts. He is assisted by ingenious and experienced counsel.
In my experience most of those trials in civil actions are difficult. They raise difficult questions of law and fact, the construction of documents, of accountancy, and of statutes. For my part I hesitate to think that many of those fraud cases could adequately be explained to a jury which had no experience and possibly did not know the credit from the debit side of a balance sheet. If it is good enough in civil cases for major issues of that nature, sometimes involving millions of pounds, to he tried otherwise than by jury, then I suggest it must be right to extend the same courtesy to criminal trials.
The only discordant voice which I have heard since I came into the Chamber is that of the noble Lord, Lord Hutchinson of Lullington, who displayed the dazzling eloquence of the closed mind which is the foremost weapon of the skilled advocate. He implied that there was no evidence that anybody is dissatisfied with jury trials and no evidence that the public in general are growing cynical about the way that fraudsters are not brought to book. Of course there is no evidence in the sense that the noble Lord has not been able to cross-examine any jurors, but there is evidence in what we read; and what we read is not all untrue. There is evidence in the fact that we know that some fraudsters are not brought to book, and we wonder why. The idea that the committee had no foundation on which to base its eloquent recommendations is wholly wrong and I am not to be put off by quotations from Lord Devlin as though they were brought down from Mount Sinai in some distant past.
We live in a different era. My noble and learned friend on the Woolsack is charged with selecting 900 magistrates and I have no doubt that he would have plenty of opportunity and the ability to select those who would sit on the fraud tribunals recommended by the committee.
The noble Lord, Lord Hutchinson of Lullington, wants to leave everything as it is in the best of all possible worlds. Leave us, he says, to start by challenging the jury; leave us to deny everything and, finally (having confused the jury), leave us to say, "Members of the jury, are you quite sure that my client is guilty?" It is on that kind of eloquence that some of the fraud trials have ended prematurely or with results that seem to be remarkable to those who know something about the case.
§ Lord Hutchinson of Lullington
My Lords, may I intervene? Is the noble and learned Lord suggesting that we should get rid of the burden of proof?
§ Lord Templeman
My Lords, I am not suggesting anything other than that which is in the report. To my mind the report is eloquent, rational and reasoned. I can see no argument against it except the fact, as the noble Lord says, that some of these practices were invented 600 years ago and the fact that they are outdated has not been universally recognised.
Finally, the noble Lord referred, as he was bound and right to do, to the innocent. I accept all that he says, subject to this: on my reading of the report it is not the innocent who have cause to fear the carrying out of the recommendations, it is only the guilty.
§ 7.5 p.m.
My Lords, this is a debate where the layman rushes in where angels fear to tread. Bearing in mind that premise, I have somehow managed to draw some comfort from the certain knowledge that I am no angel. I asked my noble friends to speak late in this debate in the hope that anything that is worth saying about the report will already have been said. In this I have not been disappointed and the burden that I might have placed upon myself has been lifted. May I say how well it has all been said, not least by the noble and learned Lord, Lord Roskill, and by the noble and learned Lord, Lord Griffiths, in a memorably brilliant speech.
While discussing this report with a friend of mine at the Bar I suggested that, rarely among such publications, the report reads like a novel. His understandable response was to observe that I must read some very strange novels; to which I retorted, quite untruthfully, that they were not strange novels, just the classics. I was thinking, of course, of the pellucid clarity of the report and the exciting development of the argument within the report.
However, what particularly excited the imagination of this layman was how the report never strays from the most pertinent of quotations on its frontispiece page. There is one from the Magna Carta which goes:To no one will we sell, to no one will we deny or delay, right or justice".The other quotation is from Psalm 84, verse 10:For one day in Thy courts is better than a thousand".As many of your Lordships are aware, delay is as cruel a denial of justice as any. I humbly submit that the report itself provides the evidence for how, in part, the answer to this dreadful problem lies in the investigative stages and in the question of resources.
The report admirably recognises the fact that justice does not just begin when the door of the court opens. In Chapter 2 we learn that some 600 officers are employed throughout England and Wales by the police which is, of course, the major investigating body for fraud. Appendix E states that the Royal Hong Kong Police Force employs approximately half that number; namely, 300 officers doing nothing other than investigating fraud. In addition to those officers there is the Independent Commission Against Corruption and its supporting staff who also have investigative powers. The population of the United Kingdom is 55 million and the population of Hong Kong is 4.6 million. I admit that the measure is crude, but I think the point is obvious.
I should add at this point that I take some comfort in what my noble and learned friend the Lord Chancellor told the House in regard to the increase in the number of staff in this field which is being allocated to the Department of Trade and Industry; but I suggest that it is a drop in the ocean.
As has been referred to earlier in this debate, the City of London is under threat from fraudsters. I would, and do, go further. It is no longer a place for a gentle man—and I use that term in all its senses and all its connotations. It is now a place for cowboys and what the Americans call "quick buck operators". If this Government suggest that he who pays the piper calls the tune, our unholy mother, the Treasury, will 63 point out that already legal aid costs have one of the highest rising curves in public expenditure and that there are greater calls upon the taxpayers' funds, with all the familiar arguments of the Treasury. If so, I fear that precious little will be done. For is it not strange that when Governments want to spend money they invariably call it Government money, but when they do not want to spend money they always call it taxpayers' money?
A Royal Commission report is only as good as the degree of its implementation. As the report itself says on page 1:Where we believe radical change is necessary, we have not shrunk from recommending it. We hope the Government will not shrink from giving effect to it.I can only say "hear, hear" to that.
Finally, I should like to make a short comment on the emotional subject of juries in complex fraud cases. I ask those responsible for deciding this matter to consider my very humble view. The report is clearly by no means certain upon this question. The argument against retaining a jury is undoubtedly elitist, but that is not wrong per se. Where I feel that the report is unhelpful is that by inference it is suggesting that a jury should have expertise. I most humbly suggest that that is wholly the wrong test. What is sought in a jury is precisely what is sought in a bench, and it is not expertise so much as wisdom.
Let me take expertise first. Is there any lawyer anywhere, in this House or elsewhere, with experience of examining or cross-examining experts in any field in a court of law, who has not cried out, "Lord deliver me from the experts". For the court so often proves that the more he knows the more he does not know what he does not know.
Secondly, let me take wisdom. I suggest that humility is a prerequisite of wisdom. Ask the wife of any lawyer whether humility is his strong suit. You might wait a very long time before receiving an affirmative answer. Ask the wife of a chartered accountant the same question, and I can assure you that you will never receive an affirmative answer. Just because a man is articulate, it does not mean that he is wise. Just because a man is an expert, it does not mean that he has judgment. Or take the corollary which is that, just because a man cannot express himself does not mean that he is stupid.
My great fear is simply that when the great judge and the two eminent chartered accountants weigh the evidence against their great knowledge and experience, then arrogance, stupidity, recklessness, unforgivable gullibility and other unattractive human traits might well condemn a man who had no intent to defraud. I implore your Lordships not to underestimate the wisdom of a British jury.
§ 7.13 p.m.
§ Lord Mishcon
My Lords, may I say at once how much I enjoyed the short speech of the noble Lord who has just sat down? There is only one way in which anybody, when winding up a debate at this hour, certainly on this side of the House, can achieve any sort of affection from his colleagues, and that is if he makes his winding-up speech comparatively short. Let me admit right away that I, too, intended to quote 64 the Latin of Magna Carta, but the noble and learned Lord on the Woolsack has been spared my Latin pronunciation, which is absolutely different from that which he was taught. I well remember the agonised look on his face when I last quoted a Latin maxim, and I have been saved from that.
It is right, as the noble and learned Lord said, that on matters as weighty as this we should certainly try to keep an open mind and listen to the debate. I listened to the very worthy speeches that have been made on what I wish to say from this Dispatch Box was undoubtedly a very worthy report. One has to affirm that very definitely when one hears in the course of the debate two members of a party which delight to call itself an alliance and two lawyers of great eminence at the criminal Bar decide upon two different attitudes—indeed the difference could not be more marked.
I remember how the noble Lord, Lord Wigoder, described this report, saying that he wished to join in the expressions of congratulation to the noble and learned Lord, Lord Roskill, and the members of his committee for producing so very quickly such a constructive, stimulating, in some cases provocative but always highly readable, report, with much of which one could agree in principle. In my view, that master of understatement my noble friend Lord Hutchinson of Lullington did not exactly paraphrase that description of the report. Of course we all listened to him, with great interest, as we always do. Nobody can make a more formidable speech than he in the advocacy of any cause, and obviously he believes very sincerely in his.
If I may say so, there is one aspect of this matter which has not been expressed in this debate and which is not in this—though one may have different views about certain sections of it—admirable report. Certainly, until this report emphasised the need for reform in the investigation of fraud, a great number of interested ministerial departments, such as the Department of Trade and Industry, did not attach as much importance to the very serious crime of fraud as do most members of the public.
If I were alone in thinking that, I should not expect your Lordships to listen to me very attentively. However, I read an article that appeared in the Guardian which in its first paragraph recited the views of John Wood, who used to be the Principal Assistant Director of Public Prosecutions, given in his address to the American Bar Association in 1985 at their well-known conference in London. He said this:We in this country are exremely concerned about what appears to be an explosion in white collar crime brought about partly because sentences for bank robberies are very high while sentences for white collar crimes are ridiculously low".He then went on to deal with the way in which the police in many cases fobbed off what seemed to be a very complex investigation of a fraud case; how the Director's office was hopelessly understaffed and how the Department of Trade and Industry conducted its inquiries under the sections which have been mentioned very often in the course of your Lordships debate; how these investigations very often lasted for many, many years—certainly three and a half years in one case which I can remember—and how, as a result of all this, very few prosecutions of complex fraud cases took place.
65 So I turn at once—and others have done this in the course of the debate—to a plea that we do not regard the question of trial by jury, upon which without any doubt at all I am sure that all your Lordships hold very fundamental and very sensible views, as the be-all and end-all of the Roskill Report. I shall give your Lordships my reasons. As the report itself says at paragraph 2.3 on page 9:Before a fraud case can be pursued information has to reach the authorities responsible for investigating or prosecuting. It seems that most complaints of fraud or reports of suspected fraud when made, go initially to the police".At paragraph 1.3 on page 5, the report says:At the outset of our inquiry it was felt that the main part of our work would be concerned with the question of jury trials for fraud cases. It soon became evident, from the volume of evidence we received, that although witnesses were concerned about the retention or otherwise of jury trials, their main criticisms and suggestions related to the administrative and legal procedures presently in force in fraud cases which were thought to be out of date and unrealistic".Absolutely rightly, in my humble view, the committee concentrated on what was responsible for the long delays and the inordinate expense before prosecutions (on fraud cases very largely) were brought to trial.
The committee undoubtedly has made recommendations from the very start of this matter which must at the very least have your Lordships' attention. What does it say on investigations? It says that they ought to be co-ordinated; that those investigating are under-manned; that there is not enough specialist experience; that members of the Bar have to deal with those matters at a later stage after investigation, and very often they have no experience of and no tuition even in how to read a balance sheet. So the committee says that at the investigative stages we need the manpower and the experience.
What does the committee then say about the stage when the investigation is complete? It says that time should not be wasted on the summary proceedings that take place without anybody getting any advantage out of them at all, and it is absolutely right. Let there be a transfer certificate which sends the case immediately to court.
This is the most important point. The case comes to court, and there is this rambling on, with multiplication of documents, many of which are irrelevant. There is nothing like the attitude of somebody who is inexperienced: "Put the document in; it may be relevant. It can't do any harm. We can be criticised only if it is not put in". Voluminous documents accumulate right up to the moment of trial, as the report says. Very often from both the prosecution and the defence point of view the matter is an absolute mess. It goes to leading counsel on both sides and they have to rummage through all these complexities, sometimes at only a few days' notice. People then wonder why the case is presented with a great deal of time wasted and with a great many corrections, as I, with my limited experience of these matters, have seen and heard.
One comes to this conclusion. As my noble and learned friend Lord Elwyn-Jones emphasised, modern methods should be pursued of evidence being translated into the court in a way which makes the matter clear by very vision, even to those not well versed in such matters. In the preparatory proceedings 66 which the report recommends schedules should be drawn up under the proper surveillance of a judge and leading counsel concerned in the case, or even junior counsel. If all this is put in order, the issues can come before the court and will have been sorted out beforehand.
I shall not deal with whether the defence case ought to be revealed; I do not wish to take up your Lordships' time on that point. But the prosecution case should be clearly put in a statement that is agreed with the judge, and witnesses should be related to that case. In that situation we may not have to worry about the complexities before a jury. The jury may well understand the case perfectly well. It is largely because of the jungle which the jury cannot see their way through that the use of a jury is questioned.
Is it not therefore sensible to see how the reforms so well recommended by this businesslike committee simplify and clarify complex fraud cases (and we are dealing in this instance only with complex fraud cases) before we take not the bull but, as the noble and learned Lord the Lord Chancellor, would prefer to say, the sacred cow by her horns? She is a sacred cow worshipped not by idolators but by those who have a respect for history and who think that they are being radical and liberal when they want to preserve the jury system but not when, even in a small amount of cases, they think that that principle should no longer obtain.
Would it not be common sense, without opposition very largely, to get on with simplifying fraud trials and the procedures? We should see that the fraudsters do not get away with it. We should shorten the time, and leave it to experience to see whether cutting out the jury is necessary later on. I have an idea that we shall find that it is not.
§ 7.26 p.m.
§ The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur)
My Lords, we have had a most interesting and stimulating debate in which the rather awe-inspiring list of speakers has encompassed great experience of most aspects of the law or of the City. I am glad that it has been possible to give your Lordships the opportunity to discuss the report so soon after it was published; exactly one month to the day, I believe.
The debate has also given us the opportunity to hear two fine maiden speeches. The noble and learned Lord, Lord Griffiths, with his considerable experience at the Bar and as an eminent judge, has spoken with great wisdom and feeling on the matters of delay, resources, preparatory hearing and rules of evidence. We all have great respect for his views. We shall take careful note of them, and I shall comment on some of the points that he made in a moment or two.
Likewise, the noble Earl, Lord Buchan, made a short but forceful and effective contribution on committal proceedings and trial by jury. He brings his experience as a magistrate to bear on this difficult topic, and I am most grateful to him for what he said. I congratulate both noble Lords most warmly. I am sure that I speak for all your Lordships when I say that we look forward to their further contributions, I hope not too far in the future.
We have had the benefit, as one would expect, of an excellent speech from the noble and learned Lord, 67 Lord Roskill. He set in context, with great clarity, his approach to the difficult task that he and his committee were asked to undertake. He explained why his committee had arrived at certain conclusions. Who better than the noble and learned Lord to answer some of the points of detail that were raised, particularly in explaining to the noble Lord, Lord Wigoder, the committee's views on the difficult matter of statistics.
Individual recommendations of the committee may have found favour or criticism, and even trenchant criticism from the noble Lord, Lord Hutchinson of Lullington, which I thought was slightly ungenerous. However, there was wholehearted and unanimous agreement on the excellence of the report itself. I should like to add my personal congratulations and those of the Government to the many plaudits already offered to the noble and learned Lord, Lord Roskill, and his committee today. If the investigation, prosecution and conduct of complex fraud trials were as methodical, as careful and as constructive as this report which examines them, and the paper work that it all leads to as readable, we could all sit back with some complacency.
But, as this report makes clear without equivocation, matters are not so well ordered. The Government's job is to respond to this report in such a way that fraudsters will know that they cannot take advantage of loopholes or congestion in the criminal justice system. As my noble and learned friend the Lord Chancellor made clear in the statement following publication of the report, our commitment to act is not in question. He said then:We fully share the committee's concern that the perpetrators of serious fraud should be brought effectively to book. The report shows that the legal and administrative machinery for this purpose has been creaking badly. We are determined to bring about the changes in law, practice and attitudes which are necessary".I hope that your Lordships will agree that the appointment of this committee, which has now reported so effectively, demonstrated the Government's view over two years ago that the complex issues surrounding bringing fraudsters to justice had to be systematically addressed. The committee was thus appointed, under the noble and learned Lord's chairmanship, with terms of reference sufficiently wide to allow it to produce the far-reaching, innovative and comprehensive report which we now have before us.
Before turning to specific points raised in the debate, I should like first to address the simple question which was posed to me earlier by the noble and learned Lord, Lord Elwyn-Jones. Now that the Government have this report, what are they going to do about it? Let me say first what has been done. Recommendation 1 is that the need for a new unified organisation responsible for all the functions of detection, investigation and prosecution of serious fraud cases should be examined forthwith. This examination has already begun under the leadership of my right honourable friend the Chief Secretary. I can assure your Lordships that it will be both brisk and thorough, and that—not surprisingly, given its leadership—it will pay close attention to the proper use of resources in combating fraud. The second recommendation, again referred to by the noble and learned Lord, Lord Elwyn-Jones, is that a fraud commission should be 68 responsible for studying the efficiency with which fraud cases are conducted. I can tell the noble and learned Lord that within the Home Office, and in consultation with others, we are looking closely at the possible functions and composition of an independent monitoring body of this nature. There are certainly considerable attractions in appointing a group of able people to identify particular difficulties or breakdowns in the system which obstruct the fight against fraud; on the other hand, if the criminal justice system is already congested, we must guard against inserting any additional tier or a mechanism which might be more cumbersome than effective. On this recommendation, as with many others, we want to be clear about our objectives so that we can best assess how to achieve them.
Broadly, I think our objectives must be, first, justice, and second, efficiency. The two of these should go together and indeed both are happily combined in the Magna Carta reference quoted in the report,to no one will we sell, to no one will we deny or delay, right or justice".But sometimes mechanisms which can be accused of delay or abuse are there to contribute to the interests of justice. That is where our consideration of reform must be most cautious. We shall pay close attention to these matters—most particularly, as the parliamentary statement following publication of the report made clear—on fundamental questions such as those affecting the system of jury trial, to which I shall return in a moment.
There are many other recommendations too, which properly fall to be tested on the touchstones of justice and efficiency. Considerable enthusiasm has been expressed for the proposed reforms to criminal procedure and the rules of evidence. The Government welcome the comprehensive and at times radical approach of the committee and we shall implement in early legislation all the relevant recommendations which we find contribute to the objectives I have mentioned. I have little doubt that the rules of evidence are cumbersome and ancient. We shall do our best to introduce better ones. Indeed, the committee commend what has already been done in the Police and Criminal Evidence Act 1984 and, when considering the case for wider reform, we shall naturally take account of any lessons to be learnt from the early days of that Act.
I turn now to matters raised in the debate. In the time available, I shall do my best to cover as many as I can. I shall certainly study all that has been said, and if I fail to answer any particular points, I shall, of course, deal with those matters in writing. The noble and learned Lord, Lord Elwyn-Jones, raised the matter of the substantive law and the Criminal Law Revision Committee. Following the statement on this report on 14th January, my right honourable friend the Home Secretary sought the advice of the Criminal Law Revision Committee on the following reference:To review the restrictions on the use of a charge of conspiracy to defraud in the light of the decision in Ayres, to which my noble and learned friend referred, and subsequent cases, and to consider whether these restrictions could be removed without causing injustice to defendants".We have stressed the urgency of the work and our willingness to take forward any suitable recommendations in next year's proposed Criminal Justice Bill. 69 The Home Office is also in touch with the Law Commission on its general work on the law of conspiracy to defraud. I am sure that the Commission will pay close attention to what the Fraud Trials Committee has had to say on matters of substantive law.
The noble and learned Lord, Lord Elwyn-Jones, the noble Lord, Lord Wigoder, several of your Lordships, and on particular aspects, so far as resources are concerned—to which I shall come in a minute—the noble and learned Lord, Lord Griffiths, raised the matters of preparatory hearings. We are particularly grateful to the committee for the hard thinking that has developed the concept of the formal pre-trial review or "preparatory hearing", to adopt the report's terminology. For some time, and particularly since the most helpful and explicit judgment in the Court of Appeal, we have been looking closely at the practicability of using the stage preparatory to the full trial to clarify the matters of agreement and those in dispute between the two parties, so that the full trial need deal only with the points of substance really at issue. We have noted the remarks made in the case of Hutchinson, and the work done by the same judge in a working party to study improvements that could be made on the preparation of cases for trial.
We now have the Fraud Trials Committee's detailed recommendations. The questions that must be put relate both to principle: is it right and necessary to oblige the defence to outline the case before the trial and to be bound by that disclosure?, and to practice: are there sufficient judges and counsel to follow cases through in the way suggested without delaying other trials too greatly? We are consulting those mostly concerned in these matters. Together with what has seen said today and what will be said in another place, we hope to conclude on the merits of formal preparatory hearings in time to introduce provisions in early legislation, if appropriate. Naturally, we are also looking at whether what is included in respect of fraud should have a wider application, or whether the complexity of major fraud cases makes them peculiarly appropriate to a more formal preparatory stage.
The noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Wigoder, raised the question of disclosure by the defence. Perhaps I can say that it is not difficult to understand the attraction of Recommendation 58. As the report says, in paragraph 6.73:commonsense and the weight of the evidence submitted to us on this issue lead us to conclude that the lack of any obligation to disclose the defence case in outline in advance of the trial is a hindrance to the efficient handling of many fraud cases".At paragraph 6.72, the report enumerates the likely benefits in terms of shorter, more efficient and clearer trials. The question is whether this recommendation would undermine the right to silence. In the committee's view, it would not. It would remain for the prosecution to prove its case beyond reasonable doubt. It would not be for the defence to disclose the outline of its case until the prosecution case had, so to say, been fixed. The prosecution would therefore not have the opportunity to shift the ground of its case according to the outline provided by the defence.
The Government have not reached a firm conclusion on this matter, or the other closely 70 associated recommendations. The committee makes a strong case for its recommendations on the basis that with proper safeguards there should be no infringement of the right to silence and no resultant injustice to the defendant. We shall examine the report with that in mind.
The recommendations for the introduction of preparatory hearings as part of the trial with the same judge and counsel involved throughout provide for a departure from the present arrangements for the listing of cases and the allocation of judges. The creation of a special system to run parallel to the current arrangements for non-fraud cases would inevitably have considerable administrative implications and could well lead to changes in the ways in which judges were deployed.
In addition, the transfer of cases to the Crown Court by the prosecution would be likely to increase the workload of both High Court and circuit judges sitting in the Crown Court. There are already considerable pressures of work in the Crown Court and further careful consideration will have to be given to the implication that all these recommendations would have on the deployment of judges and the size of the High Court and the circuit benches.
However, it must be borne in mind that an increase in the number of judges, or indeed of experienced counsel, is not something which can necessarily be achieved overnight; and any necessary changes in the deployment of judges would require consultation. But I fully take the point that a formal pre-trial review must have teeth, and that the judge's discretion—whether provided for in statute or available in his inherent discretion—should so ensure.
It was inevitable that two issues should have featured predominantly in this debate: the matter of juries and peremptory challenge. The former was raised by the noble and learned Lord, Lord Elwyn-Jones, and others. We are immensely interested in the committee's proposal that a judge and two assessors, experts in business matters, should replace juries for the most complex fraud trials. But we have not reached a conclusion on this recommendation and we welcome all that has been said today, including the matter of majority or unanimous verdicts, not only here, but in the press and by the public on the possible advantages or difficulties of adopting this proposal.
I should make clear that, while any reduction in the cost and time of fraud trials would be extremely welcome both to the Government and, I imagine, to defendants, practitioners and the judiciary, these considerations do not Outweigh the fundamental concern that the trial must be fair, and the best chances of a sound verdict assured. After the case which the noble and learned Lord, Lord Griffiths, explained with such clarity, upon which the noble Lord, Lord Benson, with his great experience, commented in a moving speech, and indeed the noble and learned Lord, Lord Wilberforce, elaborated even further, I find it hard to doubt that complex, financial transactions may be difficult for jurors to comprehend. Indeed, the Roskill guidelines are constructed to identify only those cases where, and I quote:The complexity lies in the fact that the markets, or areas of business, operate according to concepts which bear no obvious 71 similarity to anything in the general experience of most members of the public".The noble and learned Lord, Lord Wilberforce, and the noble and learned Lord, Lord Denning, gave some dynamic illustrations of how times have changed, how indeed circumstances vary in different parts of the world and how complicated these matters are compared with the kind of things juries used to examine in times gone by.
As my noble and learned friend the Lord Chancellor said earlier, your Lordships are excusable from jury service as of right. However, I myself wonder whether, should I, and indeed any of us, be on a jury, how many of us would be confident that no detail would evade our rigorous scrutiny in a case like this? It seems to me fairly persuasive that those expert in business will be better able than others to understand business jargon and business dealings. But, although there are powerful arguments in favour of Fraud Trials Tribunals, a better comprehension by assessors cannot be the deciding factor any more than can reductions in cost and time of trials. The question is how best the interest of justice will be served.
Do we believe that the innocent may now be convicted because a jury acts on the maxim, "No smoke without fire"? Do we believe that the guilty may be acquitted because a completely bewildered jury should give every defendant the benefit of the doubt no matter how murky his dealings? If, at the end of the day, the real question is whether or not the defendant is dishonest, is that better judged by the standards of ordinary people or by those whose expertise permits them to disentangle exactly which business practices are legitimate and which are not? If the real problem is that the procedural and evidential rules confuse the issue, should we tackle those first, before considering the removal of juries?
Your Lordships will see that there are a lot of questions; and I have no answers.
However, on this point it is right that we reserve our position in order to take full account of what has been said this afternoon including the philosophical points made by my noble friend Lord Morris, and indeed what has been said—and will be said—elsewhere. I only hope to make clear which factors will weigh most heavily. Those are the achievement of fair proceedings and sound verdicts.
On the matter of peremptory challenge raised by many, including the noble and learned Lord, Lord Silkin, once again our statement on this part of the report made it clear that we take careful account of public and parliamentary views on all matters affecting juries. The right of a defendant to challenge jurors without giving reasons is an ancient one and not one which we could discard lightly or in haste. For this reason the Director of Public Prosecutions is already monitoring the number of challenges by both the prosecution and defence, for those cases for which he is responsible—which amounts to all exceptionally serious or difficult cases including major frauds. In our view, the Roskill critique of the use of peremptory challenge and the prosecution right of "stand by" goes further than the fraud trials remit. We therefore propose to consider the issue in the wider context of trials generally. Again we shall consider what has been 72 said today with great care. If, in the light of the committee's arguments and comments upon it we are persuaded that the jury system is being undermined as a result of the way the law is framed, we shall not hesitate to change it at the first opportunity.
The noble and learned Lord, Lord Roskill, commented that he felt that the view had been expressed that Fraud Trials Tribunals might be the thin end of a wedge. I think I said that our position on the merits of the Fraud Trials Tribunal is open. However, I should make it clear that we do not consider this recommendation to have any application wider than the complex fraud cases which the committee had in mind.
Turning now to the question of evidence, the noble and learned Lord, Lord Griffiths, expressed his view on the rules of evidence hoping that changes would be made. The noble Lord, Lord Hutchinson of Lullington, disagreed with him. I have to say that while the noble Lord, Lord Hutchinson, is entitled to his point of view, we most warmly welcome the committee's proposal to reform the rules of evidence. The rules have not kept pace with the use of documents in international business matters whether legitimate or not. Nor indeed have they kept pace with common sense.
For this reason we introduced modest but significant reforms in the Police and Criminal Evidence Act which the Roskill Committee recognises. But they wish to go further. Certainly as a Government we are prepared to develop the committee's proposals within the highly technical area of the law on evidence quickly and with care to bring reliable and relevant matters before the court with the minimum of fuss. Reliability and relevance, I believe, are the key words, and these objectives will steer our policy towards what I hope will be a significant and effective reform. Those terms do not mean, in answer to the noble Lord, Lord Hutchinson of Lullington, that all commercial documents will have a magical status rendering them unchallengeable.
My noble friend Lord Campbell of Alloway particularly referred to the question of fees for barristers. So far as concerns barristers' fees, I understand that litigation is complicated, or rather contemplated (it is probably complicated as well!) and therefore it would not be appropriate for me to comment on the whole matter of whether or not the present regulations have regard to fair and reasonable remuneration.
The noble and learned Lord, Lord Edmund-Davies, raised the important matter of comfort for jurors and the ability for them to be able to spread their papers and consider carefully all those aspects. I am advised that modern court building schemes make better provision for the comfort of jurors than the traditional courts. Court design standards take account of the needs of jurors to consider documents, and also of course provide superior facilities for them when they retire to consider their verdict. I shall look at the matter a little further and perhaps reassure the noble and learned Lord in due course.
I am conscious that I am encroaching upon eternity and my noble and learned friend the Lord Chancellor has, indeed, another debate to come. In drawing the debate to a close, I should like in the last minute or so to broaden the context a little and to say that, detailed 73 and comprehensive as it is, the report is but one strand in the Government's fight against fraud, and fraud is but one strand of crime against which the Government and the community must battle.
In the context of fraud, the financial services Bill and additional resources for the Fraud Investigation Group and the Department of Trade and Industry demonstrate our commitment. In the wider context, we cannot place fraud above other evil crimes associated with, for example, drugs or violence. However, without placing fraud on a pedestal of priority, we recognise its particular characteristics; namely, that fraudulent activities are usually covert and that major fraud is highly intricate. If we are to deal appropriately with the mischief—and we are determined to do so—we must look at each of the Roskill Committee's recommendations in the perspective of our fight against crime and the special characteristics of fraud. We must test each recommendation against the objectives of justice and efficiency, and wherever the test is passed, we must act. This, my Lords, we shall do.
§ Motion, by leave, withdrawn.