The Serious Fraud Office has been ordered to pay the costs of five defendants arising out of the failed Celtric Energy prosecution.
The case collapsed in February 2014 when Mr Justice Hickinbottom dismissed a charge of conspiracy to defraud against six defendants. The Serious Fraud Office subsequently sought to resurrect the prosecution by applying to Lord Justice Fulford, sitting in the High Court, for a voluntary bill of indictment.
On 12th February 2015, Mr Justice Hickinbottom ruled that the Serious Fraud Office was liable for the the majority of the incurred in the proceedings before the Crown Court and all of the costs incurred by the defendants in resisitng the application for a volutnary bill of indictments. The costs, which the defendants' solicitors estimate to approach £7 million, will be assessed in due course.
The judge described the prosecution's legal analysis of the case as being subject to 'regular, cataclysmic change'.
The commercial scheme was devised by highly respected commercial solicitor, Eric Evans. The Court found that the SFO had first pegged its case upon a legal opinion of Stephen Davies QC, a leading insolvency barrister. He was alleged to have been paid £250,000 to change his mind about the state of the law; so that his views coincided with Evans’. The SFO later conceded that Messrs Evans and Davies were correct in their analysis of the law and that the SFO had been wrong. The SFO proceeded repeatedly to change their case to circumvent complex arguments of the Defence.
The Court found that the changes were “fundamental”. Each version of the SFO’s case was “destined to fail in any event”. “The case presented ... changed with the wind, most iterations in turn collapsing under the slightest breeze, to the real prejudice of the [Defendants]”. “[The initial] case ... had no realistic prospect of success, as the SFO belatedly accepted. The other iterations were attempts to save a fatally-holed ship, that presented as a sequence of different cases that stood no real prospect of success or were in essence too late.”
The Court found in, wholly exceptionally, awarding criminal costs and in awarding civil costs on an indemnity basis that “... the SFO never approached this case with the requisite degree of legal analytical care or precision.”
The first Defendant, Eric Evans, was represented by Ben Douglas-Jones, led by Patrick Harrington QC, of Farrar's Building and John de Waal QC, specialist Chancery Silk. They were instructed by Philip Williams and Emma Harris of Blackfords Solicitors.
The sixth defendant, Leighton Humphreys, was represented by Jonathan Elystan Rees, led by John Charles Rees QC. They were instructed by Simon Evenden of De Maids solicitors.
Jonathan Caplan QC advised Stephen Davies QC on abuse of process.
The original ruling of the Crown Court was reported by the BBC and The Lawyer. The Lawyer subsequently published an article on the case by Ben Douglas-Jones and Andrew Johnson, and an updated article by Ben and Andrew together with Patrick Harrington QC following Lord Justice Fulford's decision.