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HIGH COURT OF JUSTICIARY
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Lord Osborne
Lord Mackay of Drumadoon
Lord Brailsford
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[2007] HCJ 17
IN219/06
OPINION OF THE COURT
delivered by LORD OSBORNE
following a hearing
constituted in terms of section 1(5) of the Criminal Procedure (Scotland) Act 1995
in the devolution issue
minute by
RAYMOND COIA
Minuter;
against
HER MAJESTY'S ADVOCATE
Respondent:
_______
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Act: Thomson, Q.C., Devaney,
Cahill; Beltrami & Co., Glasgow
Alt: P. Ferguson, Q.C., A.D.; Heather
Carmichael, Crown Agent
18 December
2007
The background
circumstances
[1] The minuter in this devolution issue
minute is currently the accused person in a criminal trial under solemn
procedure in the High Court of Justiciary at Glasgow.
The indictment against him contains three charges. These charges, as regards their essentials,
are in the following terms:
"(1) having
formed a fraudulent scheme to obtain money by fraud you did, in pursuance of
said scheme, between 1 January 1996 and 16 May 2001, both dates
inclusive at (various locations in
Scotland),
(a) falsely represent to the persons named in
Column 1 of the attached Schedule that you had invented an algorithm capable of
predicting movements in foreign exchange markets, claim that money invested by
them would be invested in said markets for short periods of time only thereby
minimising the risks associated with such investments,
(b) adopt the trading styles - Scotia, Scotia
International, Scotia International Derivities (sic), Scotia International Group, Scotia International Capital
Markets, Scotia Debentures and Pacific Eagle,
(c) incorporate or cause to be incorporated
the following companies, namely (there
follows a list of six companies),
(d) induce said persons to invest the sums
shown in Column 2 of said Schedule in shares of the companies named at the
top of Column 2 of said Schedule amounting in cumulo for the amounts shown in Column 3 of said Schedule,
and
(e) issue share certificates to said persons
for shares in said companies,
(f) issue receipts to said persons which
stated that their money would be invested in the marketplace within a specified
number of days from the date on the receipt,
(g) issue monthly statements to said persons
purporting to show the value of their holdings,
(h) produce and circulated to said persons a
monthly newsletter purporting to show the daily value of shares in said companies,
and by said means obtain money amounting in
cumulo to £13,256,765 and $5,787,210,
(i) pay out the sums shown in Column 4
of said Schedule amounting in cumulo
to £2,646,830 and $1,511,118 by way of returns of capital or payments of
interest earned in the pretence that you were running a legitimate business,
the truth being that of said cumulo sums of £13,256,765 and
$5,787,210 you only invested £861,029 and $2,241,255 in Foreign Exchange
Markets and made a cumulo loss
amounting to £96,000 and $439,000, that the profits indicated in said monthly
newsletters were false and did not exist;
and you did thereby appropriate said money amounting to £13,256,765 and
$5,787,210 for your own use which sums you obtained by fraud;
(2) between
1 January 1996 and 16 May 2001, both dates inclusive, at (various locations in Scotland) you did
carry on investment business without being an authorised person in terms of
Chapter III of the aftermentioned Act or being an exempted person in terms
of Chapter IV of said Act: Contrary
to the Financial Services Act 1986, sections 3 and 4; and
(3) between
1 January 1996 and 16 May 2001, both dates inclusive, at (various locations in Scotland) you did
produce and distribute to the persons named in Column 1 of the Schedule
attached hereto, monthly newsletters entitled Newswire and Market Watch which
created a false or misleading impression as to the value or price of shares in
the Companies named at the top of Column 2 of said Schedule and thereby
induce said persons to invest further sums in said companies whereby you are
guilty of an offence: Contrary to the
Financial Services Act 1986, section 47(2)."
[2] The trial to
which the foregoing indictment relates commenced in Glasgow on
3 September 2007.
Subsequently there was tendered to the court a Minute of Notice of
Intention to raise a Devolution Issue, in terms of Rule 40.2(1) of the Act
of Adjournal (Criminal Procedure Rules) 1996.
The minute was not timeously lodged in terms of Rule 40.2(1); however, in the terms of Rule 40.5(1)
the court, on cause shown, allowed it to be received.
[3] An
investigation of the matters that are now the subject of the current charges was
commenced by the Financial Services Authority, "the Authority", in March
2001. That investigation was ongoing
until at least November 2003.
[4] The Financial
Services Act 1986, under which the Authority's investigation was commenced and charges (2)
and (3) of the indictment have been brought, was repealed on 1 December
2001 by the Financial Services and Markets Act 2000 (Consequential Amendments
and Repeals) Order 2001 S.I. No.3649.
The 1986 Act was replaced by the Financial Services and Markets Act 2000
(the 2000 Act). The Authority was
established under section 1 of the 2000 Act as a body corporate having the
functions conferred on it under that Act.
The general objectives of the authority are defined in sections 2
to 6 of the 2000 Act. Section 2(2)
of that Act provides:
"The regulatory objectives are -
(a) market confidence;
(b) public awareness;
(c) protection of consumers; and
(d) the reduction of financial crime."
Section 4 of the 2000 Act provides, inter alia, as follows:
"(1) The
public awareness objective is: promoting
public understanding of the financial system.
(2) It
includes, in particular -
(a) promoting awareness of the benefits and
risks associated with different kinds of investment or other financial
dealing; and
(b) the provision of appropriate information
and advice.
...".
[5] The Authority
raised a civil action against the minuter in the Court of Session during 2001
in respect of various alleged breaches of the 1986 Act. On 16 May 2001 various interim orders were obtained by the Authority. An extra-judicial settlement was reached
between the parties on 30 July 2002.
Conduct of those civil proceedings and the ongoing investigations
relating to them involved the Authority contacting, or attempting to contact,
investors to obtain information and documentation in relation to the minuter
and the investments made by them in various companies with which he was
connected.
[6] The minuter
avers in the minute that, between 2001 and September 2003, the Authority
distributed six documents to the investors referred to in charge (1) in
the indictment, termed information sheets.
Those information sheets were lodged on 2 October
2007 as
defence production No. 41. The
court has heard evidence in the course of the trial from a witness employed by
the Authority, Dermot Lynch, to the effect that the information sheets were
sent to all known relevant investors and shareholders in the companies
incorporated by the minuter. These
persons have subsequently been cited as witnesses for the Crown in the present
criminal proceedings. According to the
evidence of Mr Lynch, the purpose of the information sheets was to inform investors
and shareholders as to the progress of the investigations by the Authority, and
the distribution of funds held in bank accounts operated by the minuter. The minuter goes on to make averments as to
the circumstances in which he came to be aware of the existence and terms of
these information sheets. He also avers
that the information sheets, contain statements that are prejudicial to him. It is said that, in particular, they contain
details of the proceedings by the Authority in the Court of Session, alleging
that the minuter has conducted unauthorised investment business contrary to
section 3 of the 1986 Act. From the
tone and style of the presentation of those details, it is submitted in
averment that a reasonable reader would be entitled to draw an adverse
inference in relation to the minuter. It
is averred that the information sheets disclose that the Authority's view is
that the minuter has committed certain breaches of the 1986 Act and also,
potentially, crimes of dishonesty. In
his averments, the minuter relies upon several quotations from information
sheets Nos.2, 5 and 6, to which we refer.
[7] The minuter finally
claims in his minute that, having regard to the information sheets as a whole
and, in particular, to the extracts referred to, they contain expressions of
opinion by the Authority which are prejudicial to the minuter. Such statements of opinion, it is said,
relate directly to matters which are the subject of, have arisen, or are likely
to arise in the course of the current trial.
The language and tone used in the information sheets are prejudicial to
the minuter. The nature and content of
the information sheets, individually and cumulatively, are such as may create
in the mind of the reader an impression which could seriously prejudice his
opinion of the minuter. The court has
heard evidence, in the course of the trial, from a number of witnesses who
received and read them. When the
information sheets were disseminated, it is averred that the Authority was
aware that criminal proceedings were under consideration in Scotland.
The nature and content of the information sheets, individually and
cumulatively, are said to be such as might create in the minds of Crown
witnesses an impression which could seriously prejudice their consideration of
matters that they have been, or will be, called to give evidence
concerning.
[8] A further and
separate complaint by the minuter in his minute relates to internet publicity
by the Authority. The minuter avers that
certain information in relation to him has been published on the website www.fsa.gov.uk/register and that such
information can easily be accessed by entering his name into the internet
search engine at www.google.co.uk. It is said that the home-page of the website in
question is entitled "Welcome to the FSA Register". It is said to state that the register is a
public record of financial services firms, individuals and other bodies which
fall under the jurisdiction of the Authority.
There are included a number of sections.
These include "Prohibited Individuals" and "Searches". When the minuter's name is entered into the "Searches"
section, details of three individuals are said to appear, including those of the
minuter. His name appears as a live
link. That leads to a page headed "Basic
Details for: RXC01462-Raymond
Coia". His status is listed as "Banned". A further live link on that page is headed
"Disciplinary History". That link opens
a page relating to the minuter, information from which is quoted in the minuter's
averments.
[9] It is further
averred that the "Prohibited Individuals" section of the same website indicates
that certain prohibition orders have been made pursuant to section 56 of
the 2000 Act, or arise from the exercise of powers under section 59 of the
1986 Act. That section contains a list
of names, each of which is a live link.
The minuter's name appears as a live link. That link opens a page headed "Prohibited
Individual details for Mr Raymond Coia", hereinafter referred to as "the
Statement". The effective date is stated
to be 17 November 2003.
Beside a heading "Details of Prohibition" the Statement sets out (i) details
of the order that has been made;
(ii) the effective date of the order; and (iii) the basis upon which the
Authority is satisfied that the minuter is not a fit and proper person to
perform any function in relation to any regulated activity carried on by any
authorised person, namely his conduct between 1996 and 2001, followed by a
detailed statement of the Authority's reasons for being satisfied of that
matter. A copy of the Statement is
defence production 47 in the present proceedings.
[10] The minuter
goes on to aver that further details in relation to him have been published on
the Authority's website http://www.fsa.gov.uk/Pages/Library/Communication/Notices/Final/2003/Index.Shtml.
If a search is carried out for the minuter's name on www.google.co.uk, it is said that a link to
this site now appears second on the list of search results. The page is headed "Final Notices -
2003". There follows a list of names
including that of the minuter. All of
the names appear as live links except the minuter's name. In relation to the minuter it is stated:
"Mr Raymond Coia - this Final
Notice has been temporarily removed from the FSA's website because Mr Coia
is currently the subject of criminal proceedings being brought by the Crown
Office in Scotland.
The FSA will be unable to comment further on the matter until the
criminal proceedings are concluded."
The minuter avers that publication of the Statement would
appear to be at odds with this comment.
[11] It is averred
that the reasoning set out in the Statement by the Authority comprises an
unequivocal expression of a concluded view that the minuter has carried on or
purported to carry on unauthorised investment business in breach of
section 3 of the 1986 Act. He has
been charged with a breach of that section of that Act in terms of
charge 2 in the indictment. It will
be a matter for the jury in the present proceedings to determine whether any
such breach has occurred. It is also
claimed that the reasoning in the Statement further comprises an unequivocal
expression of a concluded view that the minuter has systematically misled
investors and potential investors as to the use to which their invested funds
would be put, and as to the profits which were being generated on those
invested funds. The minuter has been
charged with operating a fraudulent scheme in essentially the same terms. It will be a matter for the jury in the
present proceedings to determine whether any crime of fraud has been
committed.
[12] The minuter
claims that, taken as a whole, the Statement purports to be, and has the
appearance of, a determination on the same matters of fact that are the subject
of the present indictment, namely charges (1) and (2). It is further said to comprise various
conclusions and statements that are prejudicial to the minuter. It is believed that, at the time of
publication of the Statement, the Authority knew or ought to have known that
criminal proceedings were pending and, accordingly, that its publication would
be prejudicial to the minuter's right to a fair trial before an independent and
impartial tribunal. The minuter claims
that the nature and content of the Statement is so prejudicial that the
objective impartiality of the jury is seriously at risk. He also claims that the prejudicial nature of
the Statement is enhanced by its source, the Authority, which has a statutory
duty in terms of section 2 of the 2000 Act to promote market confidence,
public awareness and consumer protection.
It is said that the source of the Statement tends to lend it a
particular authority or weight that it would not otherwise have had. Reference is also made to the evidence heard
by the jury in the present proceedings from Mr Dermot Lynch, covering
questions regarding the powers of the Authority, its size, its role, its
investigatory powers and the content of the information sheets. It is averred that evidence has also been led
from other Crown witnesses regarding the content and impact of the information
sheets and information provided generally by the authority. It is contended that there is a serious risk
that such evidence further enhances the authority of the Statement. The focus of the trial over a period of some
five weeks is said to have been the Authority.
In these circumstances, it is claimed that there is a serious risk that
the focusing effect of listening to such evidence would be to crystallise any
prejudice created by the Statement itself.
This, it is said, further undermines and jeopardises the objective
impartiality of the jury.
[13] The minuter
founds finally in his minute on certain other publicity. He avers that it has come to his attention
that further material relating to him has been published on the internet. An internet blog site, www.fraudandtheft.blogspot.com,
has been set up by one Larry Cook of Kansas, United States of America, who bears to be a former agent of
the Kansas Bureau of Investigation, an investigator with the Kansas Securities
Office and has been appointed receiver of certain companies allegedly
associated with the minuter. It is
averred that the site includes an entry dated 9 September
2007
detailing an interview between the author and the minuter. It refers to preparation for legal action, and
the co-operation of Strathclyde Police and solicitors in Glasgow.
A further entry, dated 10 July 2007, is entitled "Raymond Coia and
Quantum Worldwide". In particular, it
alleges that people have been victimised by the minuter and that trading
investments operated by the minuter are fictional. Taken as a whole, it is averred that the site
contains material that is prejudicial to the minuter and relates to matters
which are the subject of or analogous to the present proceedings. This internet site is said to be current and
easily accessible when the minuter's name is entered into the internet search
engine at www.google.co.uk. The minuter finally avers that the nature and
content of this material, which bears to be from an official source in the United States, is so prejudicial that the
objective impartiality of the jury is seriously at risk.
[14] Turning to the
devolution issue itself, the minuter contends that, in the foregoing
circumstances, both individually and cumulatively, the Crown's insistence on
the present prosecution is incompatible with the minuter's rights under
Article 6 of the European Convention on Human Rights and Fundamental
Freedoms, "the Convention", and, in particular, (i) amounts to a derogation
from the right to a fair and public hearing within a reasonable time before an
independent and impartial tribunal in terms of Article 6.1 of the
Convention; and (ii) amounts to a
derogation from the right to be presumed innocent until proved guilty according
to law in terms of Article 6.2 of the Convention. Reference is made to section 57(2) of
the Scotland Act 1998.
[15] The Crown have
lodged answers to the minuter's minute, in which they give several explanations
concerning the factual background to the case, to which we refer. They deny that any breach of the minuter's
rights under Article 6 of the Convention has occurred.
Submissions of the
minuter
[16] When the minute came before us
for a hearing, senior counsel for the minuter supported and elaborated its
terms. He explained that some 400
individuals were listed in the Crown list of witnesses, who were investors or
shareholders in the minuter's enterprises.
All shareholder witnesses had been contacted by the Authority by means
of the information sheets. They had also
received a covering letter which bore the Authority's website address. The first complaint advanced on behalf of the
minuter related to the content of the information sheets, which contained
expressions of the Authority's opinion concerning the minuter's affairs couched
in prejudicial language. Examples of
this could be seen in information sheet No.3 dated January 2002. It was explained that one of the purposes of
the Court of Session action at the instance of the Authority had been to obtain
"freezing orders" and to stop the minuter trading. In information sheet No.3, the Authority
contended that the respondents in the Court of Session action, including the minuter,
had not complied with a court order made on 16 May
2001,
concerning the swearing of affidavits.
That was highly prejudicial. The
receiving of the information sheets by investors would inevitably lead to those
persons being prejudiced towards the minuter.
Many, if not all, of them would be witnesses in the present proceedings. They had lost confidence in the minuter. The perception of investors was that the
Authority was a government body and that, accordingly, its pronouncements must
be true. It was contended that what
might be called the "witness pool" had been polluted by the actions of the
Authority at the earlier stage of their enquiries. The Authority had worked in close
co-operation with the prosecutor. Senior
counsel did however accept that the factual evidence which had been and would
be given by investor witnesses was not likely to be controversial, in so far as
it was confined to testimony concerning their investments and any returns
thereon.
[17] Senior counsel
turned next to the Statement, defence production 47. That Statement had been available on the Authority's
website since 17 November 2003 when the order by the Authority
prohibiting the minuter from performing any function in relation to any
regulated activity carried on by any authorised person had become
effective. It had been removed by the
Authority on 8 December 2007 and replaced by the notice referred
to above, which made reference to the present criminal proceedings.
[18] Senior counsel
submitted that the minuter's right to a fair trial had been undermined by the
Authority's actions. The situation was
comparable to that in which pre-trial publicity made a fair trial
impossible. The test that had to be
applied was set forth in Montgomery and
Coulter v Her Majesty's Advocate 2001 SC (PC) 1. The impartiality of
the tribunal required to be objectively justified. The question for the court was whether the
risk of prejudice was so grave that no direction of the trial Judge, however
careful, could reasonably be expected to remove it, as appeared from the
observations of Lord Hope of Craighead at page 25. In determining whether the impartiality of
the tribunal could be objectively justified, the Court ought to have regard to
three factors (i) the time that had elapsed between publication and trial; (ii) the discipline of the trial process
itself, whereby the jury can be expected to focus on the evidence actually led
and make their own assessment of the witnesses;
and (iii) the obligation incumbent on the trial Judge to give
suitable directions to disregard extraneous material, under reference to Haney v Her Majesty's Advocate 2003 J.C. 46. It was submitted that, in the present case,
none of these factors could redress the prejudicial effect of the
Statement. The position was that that
Statement had been accessible on the authority's website until 8 December
2007. It would have become available to any
individual who conducted a web search related to the minuter's name. Furthermore, in the course of the trial so
far, the jury had heard lengthy evidence, over a period of some five weeks,
from Mr Dermot Lynch, a representative of the Authority. It was fair to say that the focus of the
trial in recent weeks had been the Authority itself, the same body as
promulgated the Statement. Thus the
focusing effect of listening to the evidence in the trial so far could be seen
as lending further authority to the Statement and thus crystallising potential
prejudice. It was unrealistic to suppose
that any direction given by the trial Judge could remove the prejudicial
effect. Had the minuter's advisors been
aware of the existence and contents of the Statement prior to the commencement
of the trial, its effect could have been raised at a preliminary hearing.
[19] For the
assistance of the court, senior counsel for the minuter drew our attention to
the Financial Services Authority v Rourke [2002] CP Rep 14 and
Financial Services Authority v Dobb Whyte & Company [2003] E.W.H.C. 3146 (Ch). In the former
case the court held that it was for the Authority
to take the risk of whether proceedings in which they sought declaratory relief
might prejudice the defendant's right to a fair trial in criminal
proceedings. The latter case supported
the view that, if the Authority had both civil and criminal proceedings in
contemplation, they should be circumspect.
[20] Senior counsel
then turned to consider the effect of the other publicity which had occurred in
relation to these proceedings, in particular the blog site of Mr Larry Cook. That site could readily be accessed by the
use of the Google search engine. The
material available on that site, in part, related specifically to the
allegations made against the minuter and the present proceedings. Mr Larry Cook had visited Glasgow and had conducted an interview with
the minuter. Senior counsel then
proceeded to examine in detail the material available on this site.
[21] Finally, he
turned to support his contention that, not only had the minuter's right to a
fair trial under Article 6.1 of the Convention been prejudiced, but his
enjoyment of the presumption of innocence under Article 6.2, had also been
damaged. In this connection he relied
upon Allenet de Ribemont v France (1995) 20 EHRR 557. In that case the
European Court of Human Rights had decided that the presumption of innocence
could be infringed by the actions of a public authority. In this case the public authority was the
Authority. There was no doubt that the
Authority was a public authority for the purposes of Section 6(3) of the
Human Rights Act 1998. It was
contended that the contents of the Statement, defence production 47,
amounted to a formal declaration of the guilt of the minuter. In all the circumstances, the continuance of
the present prosecution was ultra vires
of the Lord Advocate in terms of Section 57(2) of the Scotland Act 1988.
Submissions of the
Crown
[22] The Advocate depute moved the court to
refuse the minute in all respects. He
drew our attention to the statutory framework within which the Authority
operated. This included the power of the
Authority to seek interdicts prohibiting any threatened contravention of a
statutory requirement. That had been
done in the present case by means of the Court of Session proceedings. So-called freezing orders had been made,
following which the issues in controversy between the Authority and the minuter
had been the subject of an extra-judicial settlement, the details of which were
described in information sheet no. 6, part of defence
production 41. The civil
proceedings were now effectively at an end.
It was a matter of agreement that the Statement, defence
production 47, had been removed from the Authority's website on 8 December
2007.
[23] Turning to the
matter of information sheets generally, these had become available in
stages. Some had been associated with
records kept by certain of the investors involved in this case. The purpose of these sheets had been
indicated by Mr Dermot Lynch in evidence as being to keep investors
informed of the purpose and progress of the Court of Session action. They also related to the recovery of assets
that might be available for shareholders.
It had plainly been necessary for the Authority to communicate with
investors, and shareholders, all of whom had appeared on one or other of the
lists kept by the minuter. Before any
distribution of assets, or the proceeds of sale of assets, could be made, it
was necessary to identify the debts outstanding. Certain witnesses who had given evidence had
been examined concerning the information sheets by counsel for the defence. The Crown had not intended to make use of
them in evidence.
[24] It appeared
that the sole point raised on behalf of the minuter relating to the sheets was
that they disclosed what might be called a pre-judged view relating to the
accused. Thus, it had been said,
witnesses might have been led to hold a certain opinion by the time they gave
their evidence. If it were being
suggested that investors and shareholders, who had been called as Crown witnesses,
had altered their evidence on account of the contents of the information sheet,
that was a matter upon which they might have been, or could be
cross-examined. However, it did not
appear to be suggested that any such thing had occurred.
[25] It seemed that
the main basis of the minute was the material available on the Authority's
website. In considering the significance
of that material, the first question to be addressed was whether the Statement,
defence production 47, contained detail which, if known to the jury, would
create a serious risk of prejudicing a fair trial. However, apart from that, it had to be
emphasised that there was no material before the court to show that any member
of the jury was in fact aware of the contents of the Statement or, indeed any
other relevant material on the internet.
Examination of the Statement showed that it was a succinct summary of
paragraphs 1 and 2 of the final notice given by the Authority to the
minuter in terms of section 390 of the 2000 Act. The Statement was simply a means whereby the
public had been informed regarding the making of the prohibition order against
the minuter, which order was contained in the final notice, dated 13 November
2003, taking effect on 17 November 2003, prohibiting the minuter from
performing any function in relation to any regulated activity carried on by any
authorised person. It was incorrect for
the minuter to suggest that the contents of the final notice and the Statement
were without foundation. Under the
procedure operated by the Authority, the first step was the issue of a warning
notice, after which a decision notice was served. It had been open to the minuter to challenge
the contents of the warning notice by making representations to the
Authority. After the issue of the
decision notice, its contents could have been formally challenged before the
requisite tribunal. These things the
minuter had not done.
[26] The Advocate
depute next drew our attention to the decision of Lord Wheatley in Sinclair v Her Majesty's Advocate (Unreported; 19 December
2007). That case had been concerned with allegedly
prejudicial publicity in the Press, in a published book and in internet
material. As was recognised by the court
in that case, there were insurmountable difficulties in connection with
controlling information accessible on the internet. The Advocate depute also drew attention to Stuurman v Her Majesty's Advocate 1980 J.C. 111 and Montgomery and Coulter v Her Majesty's Advocate, in which the
test which the court had to apply had been expressed. The only other case than Sinclair v Her Majesty's
Advocate that dealt with internet material was Her Majesty's Advocate v Beggs
(No. 2) 2001 S.C.C.R. 879, where it was held that the "time of
publication", in the context of section 2 of the Contempt of Court
Act 1981, referred to the period from when material first appeared on the
internet until it was withdrawn.
[27] The court
should bear in mind the context of the present trial. The jury had already been advised that they
would require to make a decision in the case based upon the evidence which they
heard alone. That direction would in due
course be repeated. The jurors would be
told that speculation should form no part of their decision making. As matters stood, the court had no
information as to whether any juror had in fact accessed the Authority's
website. It would not be appropriate for
any enquiry to be conducted into that matter, since that would create the risk
of alerting the jurors to the possibility that material of interest to them
might appear on the internet. It was relevant
to notice that, while reference had been made in evidence in the present
proceedings to the Court of Session action, its extra-judicial settlement and
the distribution of assets in terms thereof, there had been no reference to the
regulatory procedure followed by the Authority taking the form of the warning
notice, the decision notice and the final notice containing the prohibition
order. It was also pertinent to note
that the Authority had a statutory responsibility to maintain records
concerning, among other things, individuals to whom a prohibition related, in
terms of section 347(1)(g) of the 2000 Act and to publish such information
about the matter to which a final notice related as it considered appropriate,
in terms of section 391(4) of that Act.
[28] The Advocate
depute went on to deal with the authorities cited by senior counsel for the
minuter. Financial Services Authority v Rourke
had been concerned with the issue whether the court could make a particular
declaration. Nothing in the decision was
of assistance to the court in this case, particularly having regard to the fact
that the impact of civil court proceedings on the present criminal trial was
not in issue; furthermore, the Court of
Session was not empowered to pronounce a declarator concerning guilt or
innocence of a crime, as appeared from Law
Hospital NHS Trust v Lord Advocate 1996 SC 301. Turning to Financial Services Authority v Dobb Whyte & Company, the Advocate
depute submitted that it had no relevance to the circumstances of this
case. It related to the question of
whether certain discretionary orders in civil proceedings should be granted
having regard to the fact that there existed Serious Fraud Office
investigations in progress at the material time.
[29] The Advocate depute
then proceeded to submit that the Larry Cook blog site could not be seen as
creating any risk of prejudice to a fair trial in the present proceedings. The material on that site consisted in
discussion of several different proceedings, including the present criminal
proceedings, but nothing was said there of a prejudicial nature. In any event, it made reference to the fact
that the minuter had been interviewed by Mr Larry Cook. Once again, there was no indication that any
member of the jury had in fact accessed this site and, it might be thought,
that the chances of their doing so would be slender. Even if they were to have accessed that site,
having regard to its character, it was unlikely that any significant weight
would be given to its contents.
[30] Hitherto, the
Advocate depute had been dealing with the contentions related to
Article 6.1 of the Convention. He
then turned to deal with the contention related to Article 6.2 and to the
case relied upon by the minuter of Allenet
de Ribemont v France.
It was submitted that that decision was not of assistance to the court
in the present circumstances. It dealt
with nothing more than what, in this jurisdiction, would be a plea of
oppression. The principle expressed in Paragraph 37
of the decision was difficult to apply to the adversarial system of criminal
prosecution which existed in this jurisdiction.
The case was more readily comprehensible in the context of the
inquisitorial system operating in France.
Under our criminal procedure, the jury would be given directions in
which it would be emphasised that there existed in favour of the minuter the
presumption of innocence and that the onus of proof lay upon the Crown to rebut
that presumption. There was no reason to
think that anything that had been done by the Authority in the exercise of
their legitimate responsibilities would undermine the presumption of innocence
applying in the context of the present trial.
What had occurred in Allenet de
Ribemont v France was that police officers who had
been involved in the criminal investigation had made statements in the presence
of the Minister of the Interior asserting that the claimant was guilty of
murder. What had been published
concerning the minuter reflected the outcome of civil proceedings undertaken by
the Authority for the prohibition of the minuter. What the Authority had concluded did not
amount to an assertion of guilty of crime.
The Advocate depute concluded his submissions by drawing attention to
the date at which the minuter must have become aware of the prohibition
order. That order, contained in the
final notice dated 13 November 2003, came into effect on 17 November
2003. Inevitably the minuter would have become
aware of the prohibition at that time.
It would have been served upon him.
Thus, he was aware of the terms of the final notice, of which the
Statement was a part summary, long before the commencement of the present
criminal proceedings. Had he considered
that there was substance in the point now raised concerning the Statement, that
could and should have been raised as the basis of a plea in bar of trial, but
that had not been done.
Reply on behalf of the
minuter
[31] Senior counsel for the minuter accepted
that the minuter had had the final notice served upon him and was therefore
aware of its contents. However, none of
his advisers had examined the contents of the Authority's website until very
recently. Even if the minuter had failed
to make representations about the warning notice or challenge the decision
notice, his failure to do so could not lead to the loss of his Convention
rights. In reality, at the material
time, he had not been able to afford to attend in London to challenge these steps. There was nothing to indicate that the
material on the Larry Cook blog site had been contributed by the minuter himself.
The Decision
The statutory responsibilities of the Financial Services Authority
[32] At the outset, we consider it appropriate
to note the statutory position and responsibilities of the Authority. Since its commencement, these have been
defined by the 2000 Act. The
Authority, as regulator, has certain general duties. Its regulatory objectives, as defined in
section 2(2) of that Act are:
"(a) market
confidence;
(b) public
awareness;
(c) the
protection of consumers; and
(d) the
reduction of financial crime."
Its regulatory objectives are defined in several
sections. Section 3(1) provides:
"The market confidence objective
is: maintaining confidence in the
financial system."
Under section 3(2), "the financial system" includes
"(b) regulated activities". Under
section 4(1) of the Act: "The
public awareness objective is: promoting public understanding of the financial
system". Section 4(2)
provides: "It includes, in particular -
(a) promoting awareness of the benefits and risks associated with different
kinds of investment or other financial dealing; and (b) the provision of
appropriate information and advice". Under
section 5, it is provided:
"(1)
The protection of consumers objective is: securing the appropriate degree of protection
for consumers.
(2)
On considering what degree of protection may be appropriate, the
Authority must have regard to - ... (c)
the needs that consumers may have for advice and accurate information;
..."
Finally, under section 6(1), it is provided that:
"The reduction of financial crime
objective is: reducing the extent to
which it is possible for a business carried on - (a) by a regulated
person, or (b) in contravention of the general prohibition, to be used for
a purpose connected with financial crime."
Under sub-section (3), "financial crime" is defined as
including any offence involving "(a) fraud or dishonesty".
[33] Part V of
the 2000 Act contains provisions concerned with the Authority's handling
of regulated activities. The first
section in that part of the Act, section 56, authorises the Authority to
make a "prohibition order" where it considers that "an individual is not a fit
and proper person to perform functions in relation to a regulated activity
carried on by an authorised person." The
order prohibits "the individual from performing a specified function, any
function falling within a specified description or any function". It may relate to "a specified regulated
activity, any regulated activity falling within a specified description or all
regulated activities". Where an
individual performs a function in breach of a prohibition order, they are
guilty of an offence.
[34] Section 57
of the Act provides for the procedure that is to be followed before a
prohibition order is made. Under
section 57(1), if the Authority proposes to make a prohibition order, it
must give the individual concerned a "warning notice", which, under sub-section
(2), must set out the terms of the intended prohibition. Section 387 of the Act contains further
provisions concerning warning notices.
In particular, under sub-section (1), a warning notice must be in
writing, state the action which the Authority proposes to take; and give
reasons for the proposed action, in addition to other requirements. Furthermore, under sub-section (2) the
warning notice must specify a reasonable period of not less than 28 days
within which the person to whom the notice is given may make representations to
the Authority.
[35] Reverting to
the procedure leading up to prohibition, under section 57(3) of the Act,
if the Authority decides to make a prohibition order, it must give the
individual concerned a "decision notice".
Such a notice as that, under sub-section (4), must name the
individual to which the order is to apply, set out the terms of the order; and
the notice itself must be given to the individual named in the order. Section 388 of the Act contains further
detailed provisions regarding the contents of a decision notice. In particular, under sub-section (1) such a
notice must be in writing and must give the Authority's reasons for the
decision to take the action to which the notice relates, among other
requirements. Under section 57(5),
a person against whom a decision to make a prohibition order is made may refer
the matter to a tribunal. The tribunal
concerned is the Financial Services and Markets Tribunal established under
Part IX of the Act, in sections 132 and 133 of the Act. Under section 137, a party to a
reference to the tribunal may, with permission, appeal, in Scotland, to the Court of Session, on a point
of law arising from a decision of the Tribunal disposing of a reference.
[36] It is
necessary also to mention the provisions of section 390 of the Act, which
provides for "final notices".
Sub-section (1) enacts that, if the Authority has given a person a
decision notice and the matter has not been referred to the tribunal within the
requisite period, the Authority must, on taking the action to which the
decision notice relates, give the person concerned a "final notice". Such a notice, under sub-section (4), is
required to set out the terms of the order and state the date from which the
order has effect.
[37] It is also
appropriate to notice the statutory requirements for publication contained in
section 391 of the Act. Under
sub-section (4), the Authority must publish such information about the
matter to which a final notice relates as it considers appropriate. However, under sub-section (6), the
Authority may not publish information under this section if publication of it
would, in its opinion, be unfair to the person with respect to whom the action
was taken or prejudicial to the interests of consumers. Under sub-section (7), information is to
be published under this section in such manner as the Authority considers appropriate.
[38] Under
section 347 of the Act the Authority has a statutory duty to maintain
certain records. In particular, under
sub-section (1)(g), the Authority is required to maintain a record of
every individual to whom a prohibition order relates. Under sub-section (2), that record must
include such information as the Authority considers appropriate and at least,
in the case of an individual to whom a prohibition order relates - (i) his
name; and (ii) details of the effect of
the order. Under sub-section (5)
the Authority is required to make the record that it is required to keep
available for inspection by members of the public at such times and in such
places as the Authority may determine.
The Authority is also authorised to publish the record that it is
required to keep, or any part of it.
[39] Turning to the
documentation relating directly to the present case, it is to be observed that
the final notice relating to the minuter, dated 13 November 2003, contains
the terms of the prohibition order made against him, which had effect from
17 November 2003. Defence
production 47 is an extract from the register kept by the Authority
relating to the minuter which specifies the details of the prohibition made
against him. The terms of that entry in
the register reflect precisely the terms of paragraphs 1 and 2 of the
reasons given by the Authority for the prohibition order to be found in the
final notice applicable to the minuter.
The minuter's case
under Article 6.1 of the European Convention
[40] In the discussion of this part
of the minuter's contentions, we understood it to be accepted on the minuter's
behalf that the principles that are applied to consideration of the issue of
oppression, based upon pre-trial publicity, are to be treated as relevant to a
consideration of the issue of whether an ongoing trial can be treated as fair,
for the purposes of Article 6.1.
Upon that basis, the appropriate test was expressed in Stuurman v Her Majesty's Advocate, a case concerned with the nature of that
oppression which would justify the court in preventing the Lord Advocate from
proceeding upon a particular indictment.
At page 123, Lord Justice-General Emslie explained the test to be
applied thus:
"What matters is that the contents of
these publications, true or false, were such as might prejudice the prospects
of a fair trial of the persons described therein and the question for us is
whether on 25 January 1980 the risk of prejudice as a result of these
publications was then so grave that even the careful directions of the trial
judge could not reasonably be expected to remove it. In our opinion that question falls to be
answered in the negative."
The test was elaborated in Montgomery and Coulter v Her
Majesty's Advocate. That case was
directly concerned with the issue of pre-trial publicity in the context of a
devolution issue relating to the power of the Lord Advocate and the effect of
section 57(2) of the Scotland Act 1998.
At page 28, Lord Hope of Craighead, after referring to the test set
out in Stuurman v Her Majesty's Advocate, said this:
"This passage indicates that, when
the test is being applied in practice, all the circumstances of the case
require to be taken into account. It is
only by having regard to all the circumstances that it can be determined
whether the directions by the trial judge can reasonably be expected to remove
the prejudice. This point is illustrated
also by its application in McFadyen v
Annan. The three matters to which Schiemann L.J.
referred in paragraph (10) in Attorney
General v MGN Limited at
page 461B - the length of time since publication, the focusing effect of
listening to evidence over a prolonged period and the likely effect of the
directions by the trial judge - are all taken into account in practice in the
application of the Stuurman test in
cases of alleged oppression due to pre-trial publicity. Applied in this way the test is, in my
opinion, well suited for use in the context of a complaint which is made under
Article 6(1) of the Convention. It
fits in well with the approach which the Strasbourg court took to this matter in Pullar v The United Kingdom."
It is that test, as so expressed, which we consider must be
employed in the present case.
[41] Considering
first the submission that the minuter's right to a fair trial has been breached
as a consequence of the distribution of the information sheets to witnesses in
the present case, examination of the documents in defence production 41
shows clearly the purpose for which those information sheets were distributed. That purpose was the furtherance of proper communication
between the Authority and investors in connection with the civil proceedings in
the Court of Session initiated by the Authority against the minuter and certain
companies. The sheets deal with the
justification for those proceedings, the progress made in them, the steps which
investors might reasonably be expected to take in relation to them, and,
finally, the outcome of the proceedings.
While this factor is not determinative of the issue which arises out of
the information sheets, it must be recognised that the sending of that material
to investors represented a quite proper exercise of the Authority's functions,
as described above, and, in particular, its responsibility for the promotion of
public awareness relating to financial matters and the protection of consumers
of financial services. While it is
undoubtedly true that the six points made in the first section of information
sheet No.3 expressed criticism of the minuter, what was said simply reflected
the Authority's conclusions as at the time of the issue of that sheet in
relation to the position of the minuter.
[42] The
fundamental criticism made of this material was that, since it had been sent to
persons who had been, or would be, witnesses in the present proceedings, it
would have been likely to prejudice those persons against the minuter. However, in that connection, two points
require to be made. First, the scope of
the evidence of the investor witnesses is likely to be confined to the fact of
the making by them of particular investments and the returns which they may or
may not have received from those investments.
These essentially are matters of primary fact which, we understood, are
unlikely to be the subject of active controversy in the present trial. Secondly, if the evidence of any of these
witnesses demonstrated a prejudice held by them against the minuter, it must be
acknowledged and was acknowledged that they would be open to cross-examination
relating to the existence of that prejudice.
However, senior counsel for the minuter stated to us that he did not
think that there was any significant dispute relating to the making of
investments by these witnesses. He went
on to say, however, that certain of these witnesses had indicated in evidence that
they had lost confidence in the minuter.
We must say that we have some difficulty in understanding why evidence
such as that would have been thought relevant in the context of the trial of
this particular indictment. He also accepted
that he had not, so far, had to cross-examine such witnesses to the effect that
the evidence which they were giving was wrong or distorted on account any
prejudice on their part towards the minuter.
In these circumstances we are not persuaded that the distribution of the
information sheets to recipients has created any significant prejudice or
unfairness.
[43] We turn next
to consider the significance of the Statement, defence production 47. As we have already observed, that Statement
is a rehearsal of the contents of paragraphs 1 and 2 of the final notice
issued by the Authority pursuant to section 56 of the 2000 Act. It must be accepted that the contents of the
Statement, which have been available on the Authority's website until their
removal on 8 December 2007, are plainly critical of the conduct
of the minuter. The language of the
Statement amount to an explanation of the reasons why the Authority had made
the prohibition order against the minuter in the proper performance of its
duties and the proper exercise of its discretion. While, again, the soundness of those reasons
cannot be determinative of the validity of the contention made on the minuter's
behalf, based upon them, we consider that it is relevant to note that the final
notice and the prohibition order which it contained were made following upon
the warning notice and decision notice procedure which we have described. The minuter had every opportunity to make
representations to the Authority concerning the warning notice and, if so advised,
require the referral of the decision notice to the tribunal, neither of which
things he did. It is to be observed in
this connection that legal assistance is available before the tribunal under
sections 134 to 136 of the 2000 Act.
[44] We accept the
submission made on the minuter's behalf that the material contained in the
Statement, defence production 47, continued to be available until the
moment of its withdrawal from the website of the Authority on the date
mentioned. Plainly that factor requires
to be taken into account in connection with the test which we require to
apply. We also accept that that material
was accessible on the Authority's website, in the sense that an individual
pursuing an interest in the minuter's relationship with the Authority could
have obtained access to it without difficulty.
However, nothing was said to us to suggest that any of the jurors in
this case had in fact done that. We
would wholly agree with the submission of the Advocate depute that it would be
imprudent to initiate enquiries into whether any such thing had been done by
any juror, for the reason which he gave.
In all the circumstances, the conclusion which we have reached in
relation to this particular part of the minuter's contentions is that any prejudice
which might potentially have been created by the Statement could reasonably be
expected to be eliminated by careful directions by the trial judge.
[45] Turning to the
material founded upon which was derived from the Larry Cook blog site, we have
no hesitation in reaching the same conclusion.
Examination of that material reveals several important features. First, the author of the material currently seems
to possess no official standing, despite the contention to the contrary. Secondly, to the extent that the material put
before us refers to the minuter, it is confined to an account of the
allegations made against him and to a description of the trial procedure which
has, so far, been followed. We do not therefore
consider that it contains any material which is significantly prejudicial to
the minuter.
[46] For these
several reasons, we reject the minuter's contention that his unqualified right
to a fair trial in terms of Article 6.1 of the Convention has been
undermined by the material concerned. In
our opinion, criminal trials in our jurisdiction are not and cannot be
conducted in a prophylactic vacuum. They
are, and must be, conducted in the real world, of which the Authority, properly
performing its statutory functions, and the internet are parts. That latter mechanism has, quite properly,
been used by the Authority for the dissemination of information to the public
at large. As regards the Larry Cook
blog site, like many others, it is, having regard to its origin, quite beyond
the control of this court. The fairness
of trials under our system must therefore heavily depend upon the assumption
that juries follow directions given to them by the presiding judge. That assumption, which has been validated by
years of practical experience, can legitimately be made, unless there are powerful
indications to the contrary, which are not present here. In this case, the jury will inevitably be
directed that their verdict must be based exclusively on the evidence led
before them in court and on any facts that may be agreed; not upon any
extraneous material that may have come to their attention. We should add that, having considered the
cases of Financial Services Authority
v Rourke and Financial Services Authority v Dobb,
Whyte & Company we do not find them to be of any assistance. The former, so far as it was relied upon,
deals with the significance of declaratory relief granted in England of such a nature that it has no
counterpart in Scotland.
In this connection we refer to Law
Hospital NHS Trust v Lord Advocate. So far as the second case is concerned, it
appears to us to deal with a situation far removed from that with which we are
concerned.
The minuter's case in
relation to Article 6.2 of the European Convention
[47] The minuter's contention in this regard
was based almost exclusively upon the decision of the European Court of Human
Rights in Allenet de Ribemont v France.
The decision in that case arose out of the following circumstances. During a press conference, the Minister of
the Interior of the French Government and senior police offices identified the
applicant, who had just been arrested, as one of the instigators of the murder
of a French MP. Their statements were
widely reported in France and abroad. Although the applicant was charged with
aiding and abetting murder, he was eventually released and discharged. Having failed to obtain compensation through
the domestic courts, he alleged violations of Articles 6.1 and 6.2 of the
European Convention and claimed just satisfaction under Article 50. It appears from paragraph 37 of the
judgment of the court that the two senior police officers involved in the
identification of the applicant as an instigator of murder were, in fact, among
those conducting the enquiries in the case under the French inquisitorial
system of criminal justice. In those
circumstances, we have little difficulty in understanding why the European Court equiparated the observations for
which the police officers were responsible with the judicial authorities. However, we have insuperable difficulty in
seeing how the principle which was there followed can be applied in the context
of the system of adversarial criminal justice which operates in this
jurisdiction. In this trial, as in any
trial under solemn procedure, the jury, as judges of the facts of the case,
will inevitably receive directions to the effect that they must accept that a
presumption of innocence operates in favour of the accused person, in this case
the minuter. They will also be directed
that, accordingly, the onus rests upon the Crown, as the prosecuting authority
of demonstrating the guilt of the accused beyond reasonable doubt upon the
basis of the evidence which is led in court before the jury. Standing that position, we fail to see how it
can be said that the presumption of innocence in favour of the accused has in
any way been undermined by anything which has taken place outside the court
proceedings. It will be obvious from
what we have already said that the Authority have certain responsibilities of a
regulatory nature towards persons involved in the provision of financial
services to the public. In certain
circumstances, as has happened in this case, the Authority may find it
necessary to make a prohibition order against such a person and furnish reasons
for so doing which appear sound to them, in the light of the investigations
which they, as a responsible statutory authority, will have undertaken. Furthermore, as we have explained, if the
Authority have issued a final notice in relation to a prohibition order, the
Authority must publish such information about the matter to which the final
notice relates as it considers appropriate (section 391(4) of the Act).
[48] However, at
least in Scotland, the Authority has no responsibility
for the prosecution of crime. While, no
doubt, the Authority has provided assistance to the Crown in the present case
in the preparation of the Crown's case in this trial, we do not consider that
the Authority can be equiparated with the Crown, far less with the independent
system of criminal justice which operates in our courts. For these reasons we cannot accept that the
presumption of innocence, to which the minuter is plainly entitled, has been
damaged in any way by what has occurred.
Accordingly we reject this contention also.
[49] In all of
these circumstances we reject the whole contentions advanced in the
minute.
