Fraud (Trials without a Jury) Bill

My Lords, I beg to move that this Bill be now read a second time. In this Bill we return to the implementation of Section 43 of the Criminal Justice Act 2003, as I said we would when we debated the Fraud Bill. Section 43 created the possibility of trials without juries, in the interests of justice, in a limited category of serious and complex fraud cases. The proposals are about justice. Lord Justice Auld said in his independent review of the criminal courts on this issue: "““If I had to pick two of the most compelling factors in favour of reform, I would settle on the burdensome length and increasing speciality and complexity of these cases, with which jurors largely or wholly strangers to the subject matter, are expected to cope. Both put justice at risk””." Section 43 would allow a handful of the most serious and complex fraud cases to be tried by a judge sitting without a jury. Before the debate becomes monopolised by a discussion about jury trial, as generally seems to happen with debates on this subject, I want to spend a little time on the ends rather than the means: the problem that we are seeking to solve rather than the device by which we are hoping to solve it. Fraud inflicts significant and increasing damage on the United Kingdom economy. It is a crime that the Government take extremely seriously. Our strategy for tackling this problem has several elements. One is law reform. The Fraud Act 2006, which came into force this January, creates a new general offence of fraud and new offences relating to deception. Another element is the cross-departmental review of fraud that has examined the prevention, detection, investigation, prosecution and punishment of fraud. Its report was published in July 2006 and was put out for consultation, and last week I issued the Government’s response to that consultation. New procedures have been introduced to improve the management of large criminal cases, notably the protocol issued in March 2005 by the noble and learned Lord, Lord Woolf, the then Lord Chief Justice, on the control and management of heavy fraud and other complex criminal cases. The other key element of the Government’s strategy is aimed at the very small group of cases that involve frauds that are so serious and complex that the criminal justice system finds it difficult to prosecute them effectually. The present situation is far from satisfactory, for a number of reasons. The complexity and resulting length of some serious and complex fraud trials lead judges to sever indictments in order to make them manageable for and comprehensible to a jury. Despite this, it is often necessary to restrict the material presented to the jury. Evidence is pared down and the charges are reduced to the main charges only. The result of that may be that the full scale of the allegations against the defendant or, more often, defendants cannot be exposed. I have attended meetings with the Serious Fraud Office and prosecution counsel where they have stated that the most logical way of prosecuting a case is to try defendants together but that this simply would not be possible under the current system of jury trial. Secondary defendants, who ought properly to be prosecuted, are not proceeded against for fear of complicating the trial further. Occasionally, trials collapse with the highly unsatisfactory outcome that the taxpayer has incurred substantial cost and no one has been brought to justice. Let me make this clear: we do not found our case for this measure upon the proposition that juries are incapable of understanding the evidence in fraud trials, although there are mixed views about that. Our argument is that the measures that need to be taken to enable the jury to cope with the evidence are a problem in themselves. As a very senior judge put it: "““I believe that it will normally be possible for a competent judge, with the co-operation of competent and conscientious counsel for both prosecution and defence, by a process of severing counts and ring-fencing evidence, to reduce the case to a dimension that the jury can comprehend … But this process only renders the trial manageable by removing from the jury a large (sometimes even the major) part of the evidence that is relevant to the central issue—the honesty of the defendant. Often the evidence that is ring-fenced from the jury is cogent. I believe that a trial process that requires one to remove from the tribunal a large part of the relevant evidence, because it would otherwise overwhelm the tribunal, is seriously flawed and, so far as I am concerned, this is the primary reason why I consider that complex fraud cases should not be tried by juries””." The judge who said that is now the Lord Chief Justice of England and Wales. I need to explain that those comments were not made absolutely in the context of the present debate about this Bill but in a public lecture made some years ago on the basis of his experience of trying such cases. Despite attempts such as the 2005 protocol of the noble and learned Lord, Lord Woolf, to keep trials within reasonable bounds, which the Government welcomed, complex fraud trials often last for months. In the four years from 2002 to 2005, 27 fraud trials lasted more than six months and six of them lasted for over a year. The burden that this places on jury members is excessive; few, surely, would disagree that it is unreasonable to expect citizens to tolerate such an intrusion into their personal lives. As only a limited number of people are able to give up other commitments to sit on a jury for so long, it also means that the juries that hear these cases cannot be properly representative of the community. How many Members of this House would be willing or able to give up many months or even a year or all their current commitments—and in many court cases, I am glad to say, substantial incomes—in order to sit on a fraud trial jury? So we are left with enormously long trials that impose an intolerable burden on jurors and do not result in a jury which is representative of the community—one of the arguments in favour of the jury system—yet which fail to expose the full criminality of the alleged fraud. The public see an unhappy contrast between everyday frauds, such as benefit fraud, which are dealt with effectively, and those on an infinitely grander scale, where a combination of blizzards of paper and—dare I say it?—obfuscation mean that justice is difficult, if not impossible, to achieve. Changes to the system need to be made and, indeed, have been proposed for the past 20 years. The first call for change was in 1986, when the Roskill report, under the chairmanship of the most distinguished judge Lord Roskill recommended that, instead of being tried by a jury, such cases should be tried by a special fraud trials tribunal consisting of a judge and two lay members drawn from a panel of persons with general expertise in business and experience of complex transactions. In 1998, the Government published a consultation paper, Juries in Serious Fraud Trials. The majority of respondents to it favoured replacing the jury in such trials, as did Sir Robin Auld—now Lord Justice Auld—from whose review of the criminal courts of England and Wales I quoted earlier. Although the Auld report, like Roskill, recommended using a panel of experts to hear such cases, it highlighted numerous difficulties, including uncertainty about the role of the expert members, the risk that they would contribute evidence that could not easily be challenged by the parties, the question of how readily suitable members could be found and the cost of paying them. Taking account of the comments received following consultation on the Auld report, the Government decided that the option of a judge-alone trial was, on balance, the best solution, and that was adopted in what became Section 43 of the Criminal Justice Act 2003. That provides for the judge in a serious or complex fraud case to order, on application by the prosecution, that the trial should be conducted without a jury where he is satisfied that its lengthor complexity is likely to make it so burdensome on the jury that the interests of justice so require—I underline those words, as I did in opening, because that is the test. Not only must the judge be satisfied that those onerous conditions are met, even if he is persuaded, an order can be made only with the approval of the Lord Chief Justice or another senior judge nominated by him. As a final safeguard, there is a right of appeal to the Court of Appeal.