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Lord Phillips of Sudbury moved Amendment No. 132ZA:


The noble Lord said: The Committee may think it rather strange that, in a Bill of this importance, there is only one non-government amendment to the nine clauses which deal with the jury. In making my few remarks on this group of amendments, I wish to make it perfectly and abundantly clear that I am as protective and admiring of the jury system as anyone who has spoken today. However, I believe that there has been some wishful and romantic thinking about the capacity of modern juries which are randomly selected—although, as the noble Lord, Lord Condon, indicated, they are not truly randomly selected; in lengthy modern trials, there is a disproportionate representation on juries of unemployed persons. There is a good deal of romanticism as to the comprehension of those juries of the complexities of fraud trials.

Like others, I will remember the anecdote of the noble Lord, Lord Mishcon, who talked of the poor old tramp in Bow Street. However, I suggest that the old tramp is hardly typical of the normal accused person in a modern complex fraud trial who comes to court typically armed with a battery of expensive lawyers,

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the mission of which is not to explain so much as to secure an acquittal. I do not think that I do my profession an injustice if I say that defence barristers are adept at obfuscating when it is in the interests of their clients so to do.

Had there been present at the Maxwell trial—as I am sure there were in the public gallery—poor old pensioners of the Mirror Group, they would have been appalled at the trial's outcome. It is perhaps a comment on our debate today that not a single person, I think, has referred to the public reaction to the Maxwell trial and other fraud trials that have gone wrong. It is worth reminding ourselves that one of the biggest, most longstanding, massive and premeditated frauds in modern business history has not resulted in a single conviction of a single one of the many players involved. I think that that says a great deal about the state of complex fraud trials.

That perception is reinforced by the extremely worrying failure of the prosecuting authorities to bring before the courts a steady and reasonable flow of fraud cases. In an Answer to a Written Question which I tabled recently, I discovered that, in a typical year, the Serious Fraud Office brings forward only 25 prosecutions for fraud. The Answer also indicated that, in the past five years, there has been only one prosecution for insider trading—which I am afraid to say is a daily—indeed, hourly—occurrence in the City of London. The principal reason why there is such a paucity of prosecutions of fraud, at a time when by all accounts it is burgeoning, is the difficulty of obtaining a conviction.

We all know the reaction in the press and on television to the failure of one of these great fraud trials. Those bringing the prosecution who have been seen to fail at vast public expense are excoriated. The effect of that upon the Serious Fraud Office and Crown Prosecution offices is the one to which I have just referred—an extremely small flow of cases through the courts.

The position was considerably complicated by the observations of the Court of Appeal in the Blue Arrow case where it in effect strongly advised both the Serious Fraud Office and future judges of fraud cases to unbundle or sever different charges rather than deal with them jointly. In preparing for the debate I had cause to speak both to the present chief officer of the Serious Fraud Office and to George Staple QC, who was a distinguished chief of the Serious Fraud Office for some years. His view of these matters was put in a letter to me which I received only a few days ago. He says:


    "On further reflection over the last few years"—

this comes from someone who believed in the traditional status quo method of dealing with fraud trials—


    "and in spite of the best efforts of counsel in the Serious Fraud Office, I am no longer convinced that the trial procedure, dominated as it is by the oral tradition in which the jury play an entirely passive role—a question from the jury is rare indeed—does enable the jury properly to understand the evidence in the most complex cases. When the time comes at the end of the process to reach a verdict, the juror is expected to recall with clarity evidence which may have been presented to him many months before and take it properly into account when reaching his verdict.

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    Subjecting lay people to this process is not to my mind best calculated to ensure that in the most complex and difficult cases the juror will be free from doubt and be sure of his verdict. He will receive a powerful summing up that if in doubt he must acquit and the responsible juror will be more comfortable in taking refuge in this formula".

George Staple, if left to a choice between my amendment which preserves the jury, but a special jury, or to follow the Roskill route, which was to have a judge with two expert assessors, would incline in favour of the Roskill route. But it is because I am profoundly reluctant to abandon juries that I commend this amendment to the Committee and solicit its views. I am aware that my proposals for Clause 42 are not comprehensive and do not, for example, deal with the reduced majority of five to one, but I believe that it would be possible to establish a list of special jurors with the necessary experience or expertise. Those are the words I use, not, if I may say so, the formula of the noble and learned Lord, Lord Cooke of Thorndon, of gentlemen, esquires and the rest of it. I am talking of those with experience and expertise.

That would not, of course, confine jurors to qualified professionals but could extend to people who have worked in the finance and accounting departments of businesses of all sorts. It would not be beyond the wit of man to devise such lists, especially as many in the financial services sector now retire before 55. It is not even as if special juries are a novelty. They were a major and widespread feature of jury trials, mainly civil but also criminal, for centuries and were only abolished finally by the Juries Act 1949, but were preserved for civil commercial cases in the City until the Courts Act 1971 was passed.

Since the Roskill report in 1986 the problem has become significantly worse both in terms of the complexity of law and trials and in terms of the amount of fraud, which is why George Staple significantly shifted against leaving such trials to ordinary juries, and presumably why the former Lord Chancellor was reported in the Financial Times a year ago, in relation to those who think that the status quo is adequate, as saying that it is very often a pious hope to get a satisfactory outcome from a traditional jury given the staggering complexity, as he rightly called it, of some trials.

As I say, there is a media profile of failure. This tiny trickle of cases is now working its way through the courts at the very time when the City of London's reputation is being seriously undermined by the amount of unchecked, unpunished fraud. If one wants a very recent example of the same problem across the water in Wall Street, one has only to consider the "laddering" fraud claims which recently resulted in fines by the SEC on just 10 investment banks of 1.35 billion, with a further 5 billion plus civil claims following up. That was a case of what I could call collective fraud among investment banks in Wall Street. We have not, I suggest, seen the last of it here.

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Finally, the idea of having special juries of people of expertise and experience is supported by the Fraud Advisory Panel, which is a group of professionals who are deeply engaged in that kind of trial. In an article in the New Law Journal in March 2000, the author said,


    "The Juries Act 1974 does not adequately allow for the selection of jurors who are by reason of level of numeracy and literacy capable of following the kind of evidence typically presented in serious fraud trials".

They go on to point out that questionnaires are used in trials at the moment and were used, for example, in the Maxwell trial. They are used, first, to establish whether there is conflict of interest and, secondly, to establish the personal circumstances of those who have been empanelled. For Maxwell, I understand that more than 700 were empanelled, which gives one some idea of the problem of getting down to 12. A Home Office report of 1998 on fraud trials stated:


    "It is clear from the transcripts of the Maxwell trial that the questionnaires were also used by the court to identify and excuse jurors with obvious and serious literacy problems".

That, it stated, was probably incidental.

My amendment would merely make what is incidental formally permissible and gather together a number of our fellow citizens who have the expertise and experience. That would achieve two things. First, it would speed the course of trials enormously, because, as is obvious, the case currently must proceed, like a convoy, at the pace of the slowest juror. It would therefore accelerate trials considerably. Secondly, it would enable those who are supposedly sitting in judgment to have some prospect of following the twists, turns and complexities.

Perhaps I may make a point from personal experience. Several noble Lords have spoken of their own experiences in these matters. Having spent a good number of my early years dealing with fraud trials as a solicitor, and as one who since tried to explain the complexities of the law to the great British public for 25 years as "Legal Eagle" on "The Jimmy Young Show"—


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