New Clause 1

Fraud Bill [Lords] – in a Public Bill Committee on 22nd June 2006.

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Repeal of section 43 of the Criminal Justice Act 2003

‘Section 43 of the Criminal Justice Act 2003 (c. 44) is repealed.'.—[Mr. Heath.]

Brought up, and read the First time.

Photo of Martyn Jones Martyn Jones Labour, Clwyd South

With this it will be convenient to discuss amendment No. 17, in schedule 3, page 16,line 45, at end insert—

Criminal Justice Act 2003 (c. 44)

Section 43.'.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I welcome you to the Committee, Mr. Jones. I hope that our proceedings will be relatively short, but we shall see.

New clause 1 would repeal section 43 of Criminal Justice Act 2003, whose purport is to allow non-jury trials in fraud cases, so it is entirely relevant to our discussions. Let me say from the outset, however, that I do not intend to press it to a Division, and my purpose in putting it on the amendment paper is simply to set out clearly our position on section 43 and allow the Solicitor-General to repeat the assurances that were given in another place about the Government’s intentions. That is a sensible thing to do and simply makes the position clear.

There has been a lot of discussion about section 43 since the passing of the 2003 Act and there have been what we might describe as misunderstandings along the way about various party’s intentions and the degree of consultation inherent in taking such issues forward. I shall not rehearse those arguments again today, but simply say that the Liberal Democrats are utterly unpersuaded of the need to proceed with implementation of the section 43.

If the Bill is enacted, the measures in it will go a long way towards simplifying and clarifying the laws on fraud, and that is indeed the intention. In so doing, the Bill will, I hope, assist with the presentation and management of fraud cases and at least partially remove whatever pressure there is on trial juries. Juries are an important part of the justice system, and although we accept that some trials take place without them, we are unpersuaded that cases involving the serious crime of fraud should be included. In a perfect world, therefore, section 43 would be repealed.

Of course we accept the assurances given by the Attorney-General in another place, where he made it plain that the Government intended not to use section 43, but that if they did proceed with changes to the arrangements for jury trials in fraud cases, they would do so through primary legislation. Of course, I accept those assurances and I am grateful for them. Given that they are in place, however, it could be argued that there is no need for section 43 and that repealing it would make no difference. Equally, if section 43 is not to be used, there is no mischief in it, which is why I do not intend to proceed to a Division. I simply ask the Solicitor-General to repeat the assurance about the Government’s intentions.

If the Government have formed the view that there may be a need to proceed through primary legislation, I invite the Solicitor-General to consider that there should be time for the Bill, if enacted, to take effect and for some assessment to be made of its impact on the duration of trials and the prevalence or otherwise of failed trials under the new offences. It would be absurd to discard a basic building block of English justice without that objective assessment or evidence to suggest that the changes would have a beneficial effect. That is the position of Liberal Democrat Members, and it may well be the position elsewhere on the Opposition Benches. I invite the Solicitor-General to make any comments that he feels appropriate about the new clause.

Photo of Dominic Grieve Dominic Grieve Shadow Attorney General

I am grateful to the hon. Member for Somerton and Frome (Mr. Heath) for bringing the new clause forward. He will know that his views on the subject are identical to mine and my party’s. We sought to resist section 43 of the Criminal Justice Act 2003 when it was introduced. There was a stand-off between the Lords and the Commons and its eventual introduction was accompanied by a double-lock mechanism that required a resolution of both Houses of Parliament—which, it became apparent, the Government were unable to secure.

I make the position quite clear: I do not think that the Government, in seeking to put that provision in the Criminal Justice Act, were attempting a ruthless undermining of trial by jury. However, I happen to believe that they were profoundly mistaken. Jury trial is a very good system, and I believe that it is possible to have jury trial in long and complex fraud cases. Indeed, from the few fraud cases that I have done, my experience is that the jury appear to have absolutely no difficulty understanding the key elements of the offence or the allegations being made. As I mentioned earlier in our proceedings, the basic problem that emerged in virtually every case in which I was involved was that the case had been badly presented and the indictment poorly drafted. Those cases tended to fail, quite often at half-time after a submission of no case to answer. Sometimes—as with the case in which my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) was involved—cases ran into the sands because the case management was extremely unsatisfactory. That has nothing whatever to do with the jury.

If the Government wish to return to the topic in future, they would be well advised, as the hon. Member  for Somerton and Frome said, to allow for a little delay to see how the new Fraud Act works. I have some confidence—clearly, so, too does the Solicitor-General, as he is presenting the Bill to the House—that this Fraud Bill has the potential to make the prosecution of fraud easier. Certainly, in terms of the problem of comprehensibility to a jury, this Bill, as it stands, can only be an improvement. I hope that the Government do not, as a result, run off and hastily introduce new primary legislation—that is what they say they want to do—to implement section 43 in some new or variant form. Of course, if they do that, we will listen carefully to their proposals, and if they have any merit, we will give them careful consideration.

In the course of the passage of this Bill through the other place, I was pleased to learn that the Government were prepared to give an assurance that section 43 would never be used to implement restrictions on trial by jury in long fraud cases. However, the suggestion that there might even be primary legislation in the next Session of Parliament clearly raises the possibility of yet another serious difference of view occurring in this House and, I suspect, the other place on the subject. I make this plea to the Solicitor-General: if the Government’s intention is to proceed in the next Session, perhaps they should delay it a year and just see how the new fraud provisions work. It might be possible to provide enough reassurance to the Solicitor-General—and, I dare say, the Attorney-General, who seems particularly exercised about the issue—that a change to the right to jury trial is not needed.

Although I welcome the spirit of the new clause, I certainly shall not press it to the vote; that would appear churlish, in view of the assurances given by the Government in the other place. However, I am grateful for the opportunity that this Committee has had to touch on the subject, as now the Government know where we stand on it. Perhaps we can also have a short response from the Solicitor-General, telling us how the Government’s thinking on the subject is developing.

Photo of Mike O'Brien Mike O'Brien Solicitor General, Law Officers' Department

On Report in the other place, my noble and learned Friend the Attorney-General, said:

“The Government, while remaining committed to the policy contained in Section 43, have taken the view that we need to separate this issue from the passage of the Fraud Bill. We therefore propose to bring forward fresh primary legislation to give effect to that policy as soon as parliamentary time allows rather than bringing forward an order giving effect to Section 43.”—[Official Report, House of Lords, 14 March 2006; Vol. 679, c. 1130.]

That, I hope, gives Opposition Members the reassurance that they need that section 43 will be dealt with in primary legislation, rather than by means of an order. That, at least, is the way in which we propose to go.

I shall not give a long rehearsal of the arguments on non-jury trials, but there were 29,000 jury trials last year. If section 43 had been implemented, there might have been 29,000 less half a dozen or perhaps 20, and most of those non-jury trials would have been very long fraud trials. Between 2002 and 2004, there were 19 fraud trials lasting longer than six months; six lasted more than a year. We are primarily talking about long fraud trials dealing with very complex issues. In a  number of fraud trials, judges expressed concern. For example, in the Blue Arrow case, Justice McKinnon, the trial judge, said:

“No jury should be asked to cope with what this jury have had to endure.”

We are concerned that justice should be done in fraud cases. We broadly support juries dealing with the vast majority of fraud cases, never mind general cases of criminal culpability. In 2003, of the 2,978 people tried for fraud, 2,258 were found guilty, 1,879 of whom pleaded guilty. The vast majority of those cases would still be tried by a jury, even after implementation of section 43—although, obviously, in the case of a guilty plea, a jury would be unnecessary, in terms of finding guilt. That is our broader position.

I appreciate that both the hon. Gentlemen who have spoken say that they are speaking to the new clause in order to hear a rehearsal of the Government’s position in this place, which is a fair and proper thing to do. However, with the reassurance that I have given, and having repeated the words of my noble and learned Friend the Attorney-General, I hope that the hon. Member for Somerton and Frome will feel able to withdraw the motion.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I thank the Solicitor-General for what he said, and we are grateful for it, although it was entirely expected, because it follows on from what the Attorney-General said in another place.

I could dispute parts of what the Solicitor-General said. The fact that a case was unendurable for a jury may not owe anything to the difficulty of understanding the evidence or the pressures put on the jury, but may simply be because the case was managed in such a way that absurd time pressures were put on jury members, in terms of the trial’s duration. I know that the Government have been working on the improved management of complex cases. We must wait and see whether that—and, indeed, this Bill—has the desired effect; I hope that the Bill will simplify indictments and legal arguments and reduce the length of time needed.

On Second Reading, I juxtaposed a British trial with an American trial, although I freely admit that the British one was not a fraud trial. It was the Bank of Credit and Commerce International litigation.

The fact that the trial took two years and that the two opening speeches alone took 200 days of court time is a disgrace to the operation of our legal system and our courts. Possibly the biggest fraud case of modern times—the Enron case, which was heard by a Texan court in Houston before a jury—was completely finished in 15 weeks. That suggests that management and having a firm control of the presentation of cases are key issues, and that the ability or otherwise of a jury to cope with the complexity of fraud trials is not. Indeed, there is plenty of qualitative evidence that that is the case.

Photo of Geoffrey Cox Geoffrey Cox Conservative, Torridge and West Devon 9:15 am, 22nd June 2006

Merely to reinforce what the hon. Gentleman is saying, with every word of which I agree, in the Jubilee line case, which the Government have used as evidence of  the need for change, the jury displayed astonishing diligence and attentiveness to its duty. It kept up constant attention, with a series of pertinent questions, and at no stage, until the trial eventually drifted into the sands for entirely other reasons, gave any indication of wanting to do anything other than reach a conclusion. The hon. Gentleman’s words are exactly right and felicitous—the problem is one of management.

I am engaged in another case—also a major fraud trial—in which the Americans managed to bring the related defendants to trial by 2004. The parallel proceedings, concerning exactly similar issues, will not be brought to trial in this country until 2007. There is a clear and instructive comparison to be drawn between the American and English systems.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I am most grateful to the hon. Gentleman, who speaks with experience that I do not share.

I do not want to labour the point. I welcome what the Solicitor-General has said, although I regret that he did not say that he would allow the proposals to bed in and an objective assessment to be made of its effect on jury trial before bringing forward primary legislation. I still hope that that might be the case, although it was not explicit in his comments.

The fact that the Bill has been broadly welcomed in all parts of the Committee and that we are, I hope, proceeding with it expeditiously suggests that we all share the same objective. The fact that we profoundly disagree on one point is unfortunate, but it is a disagreement that we can argue about if and when primary legislation is brought forward. On that basis, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.