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Country's most senior judge calls for radical reform of laws on fraud so City bankers can be tried and punished
Lord Chief Justice said there
are too few fraud prosecutions
Follows no charges against those responsible for financial crisis
The country’s most senior judge called for radical reform of the laws on fraud so that corrupt City bankers can be tried and punished.
Lord Chief Justice Lord Thomas said: ‘It is vital for the health of our economy and the pre-eminence of London that those who commit financial fraud or engage in bribery and corruption are tried in a criminal court and severely punished.’
He said there were too few prosecutions for fraud and shaking up the law would ensure ‘rigorous pursuit of more prosecutions for fraud, particularly fraud in the financial markets, and for bribery and corruption.’
The intervention from Lord Thomas, who is the head of the judiciary and the leading criminal judge in England and Wales, follows the failure of prosecuting authorities to bring criminal charges against a single banstker or financier over the wrecking of the economy in 2007 and 2008.
The collapse of banks including Northern Rock, the Royal Bank of Scotland and HBOS cost the taxpayer scores of billions in bailout money. Yet no City executive has answered in court for the lapses and greed that led to more than five years of recession.
Since the banking catastrophe
the banks have been involved in a series of scandals that have led to
the payment of further billions in compensation, and large-scale fines
against financial institutions.
Not one banker has yet been successfully prosecuted over any of the post-crash scandals.
Lord Thomas said in a speech to the Justice legal reform group: 'Fraud investigations and trials are still too slow and immensely expensive; not enough prosecutions are brought despite the re-energised Serious Fraud Office under David Green QC.'
He said that fraudsters have been getting away with it since the early 1980s.
He said that as a commercial barrister at the time 'I saw as much if not more fraud than would a person practising at the criminal bar; I had also been heavily engaged in the legal issues arising out of a series of scandals then involving the insurance market. Many of those scandals involved conduct where the allegations were of serious criminality.
‘Prosecutions were few and those that were brought failed.’
Lord Thomas referred to the views of former Director of Public Prosecutions Lord MacDonald QC, who said in 2009: ‘Our system for regulating markets and for prosecuting market crime is completely broken.’ The Lord Chief Justice singled out two key issues in fraud cases - disclosure and the mode of trial.
Disclosure procedures require prosecutors to reveal to defendants all the information they have - including information that fraud defendants can use to help their case.
Reformers say prosecutors should be able to use only the information they need to win a conviction, and that a defendant should have to get an order from a judge before they can get any other material the prosecution side may have.
Concerns over mode of trial centre on the ability of juries made up of ordinary people to understand complicated fraud cases.
Alternative proposals include trial by judge alone, or trial by a judge sitting with a mixed panel of expert assessors and laymen.
Lord Thomas said: ‘There are still major problems in disclosure that seem to indicate things are getting worse rather than improving.
‘Should we not look radically again at disclosure and the mode of trial’? Last month an analysis of the behaviour of bankers in the 2008 crash by US judge Jed S Rakoff questioned why there had been no criminal convictions of bankers.
Judge Rakoff said an American inquiry referred to fraud on 157 occasions; that the use of top-grade AAA ratings on bad debt may have shown intent to commit fraud; and that the involvement of governments in weakening financial regulation and urging on disastrous takeovers might have discouraged prosecutors.
In his speech the Lord Chief Justice also canvassed reforms to cut the cost of civil justice, including giving judges greater freedom to question witnesses in civil and family cases.