U.K. Regulator Wins Appeal Removing Threat to Libor, Other Cases

The U.K. markets regulator won a ruling allowing a fraud trial halted over public funding cuts to continue, removing a threat to the future of other high-profile criminal cases.

A London appeals court granted the Financial Conduct Authority the right to prosecute five defendants over a land-banking investment case today, overturning a lower court’s ruling that paused the proceedings after the men lost their trial lawyers due to legal aid cuts.

The government is cutting public funding for barristers in an effort to reduce the country’s deficit. A 30 percent fee reduction for lawyers in complex trials, known as very-high-cost cases, took effect in December. The land-banking investment case and prosecutions over insider trading and rate manipulation fall into that category.

“The appropriate level of remuneration for VHCC’s is not one in which we could or should become involved and we do not do so,” Judge Brian Leveson said in the ruling. It is essential that the government and judicial profession “continue to try to resolve the impasse that presently stands in the way,” he said.

Some defendants in other VHCC cases, like the FCA’s biggest insider trading case, dubbed Operation Tabernula, and the SFO’s probe into manipulation of the London interbank offered rate, or Libor, have also struggled to find representation because of the cuts.

The FCA said in an e-mailed statement that it welcomes the ruling and “is committed to pursuing criminal action in appropriate cases.”

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