Should the Court of Appeal be able to block appeals to the UK Supreme Court against legal rulings it has delivered in criminal cases? The question is of particular importance to two former bankers who lost their appeals against fraud convictions last week after they were found to have rigged benchmark interest rates.
In civil proceedings, an appeal to the Supreme Court requires permission from either the Court of Appeal or the Supreme Court itself. Court rules say you have to ask the lower court first. If permission is refused — as it usually is — you can then ask the Supreme Court for permission.
That means the Supreme Court can mostly choose its own cases — dining à la carte, as it is said.
In a criminal case, the law is different:
An appeal lies to the Supreme Court… only with the leave of the Court of Appeal or the Supreme Court; and leave shall not be granted unless it is certified by the Court of Appeal that a point of law of general public importance is involved in the decision and it appears to the Court of Appeal or the Supreme Court (as the case may be) that the point is one which ought to be considered by the Supreme Court.
So the Court of Appeal can stop the case reaching the Supreme Court by refusing to certify a point of law.
You can understand the thinking behind this. Criminal cases often turn on the evidence rather than the law. There are not usually many members of the Supreme Court with extensive criminal experience.1 Far better to let the Court of Appeal filter out cases that don’t stand a chance.
But there’s another side to the argument. Imagine you sit in the Court of Appeal. You and your colleagues have decided that a defendant was properly convicted. If you certify a point, there’s always a risk that the Supreme Court will find that the law has taken a wrong turn. Some might see that as an appalling vista, to be avoided at all costs.
Hayes and Palombo
Under the London Interbank Offered Rate (Libor) scheme, panel banks were required to submit a daily assessment of the rate at which money could be borrowed from other banks in specific currencies and for specific periods. The Libor rate was calculated from this information. A similar rate, called Euribor, was calculated for Euro loans.
The Court of Appeal has ruled at various times that panel banks were required to make an honest and genuine assessment of the lowest rate at which the relevant bank would be able to borrow. Judges have rejected the argument that a Libor submission could be chosen from within a range of permissible interest rates in order to give a legitimate trading advantage to a bank. But the Court of Appeal has never certified that this raises a point of general public importance on which the Supreme Court could rule.
In 2012, Tom Hayes, a British citizen who had been based in Tokyo, was accused by US investigators of manipulating the Japanese Yen Libor for the benefit of his employers.
Shortly afterwards, he was arrested at his home in Surrey at the request of the Serious Fraud Office. During subsequent interviews, he made admissions that he had acted dishonestly. As Andy Verity reports in his book Rigged, the trader says he made false confessions in order to avoid extradition to the US and the possibility of a much harsher sentence.
Hayes was tried alone; his alleged co-conspirators were acquitted in separate trials. Convicted of conspiracy to defraud, he was sentenced to 14 years, reduced on appeal to 11 years. He served about half that period in custody.
Carlo Palombo is a French citizen who worked in London and was involved in submissions on the Euribor rate. In 2019, after a retrial, he was convicted on a majority verdict of conspiracy to defraud and sentenced to four years’ imprisonment.
The scene then switches to the United States. In 2022, the US Court of Appeals for the second circuit, regarded as the leading appeal court in matters of financial crime, allowed appeals by Matthew Connolly and Gavin Black, two traders who had each been convicted of wire fraud and bank fraud in relation to US dollar Libor manipulation in New York.
In effect, the court rejected the notion that a submission which took account of a bank’s own interests was necessarily a fraud. Rates within a range could be acceptable.
That prompted the Criminal Cases Review Commission to refer the cases of Hayes and Palombo back to the Court of Appeal. If three highly experienced US judges had decided that what Connolly and Black had done was not fraud, shouldn’t the courts of England and Wales follow their lead and keep the law consistent with the rest of the world?
No, said the Court of Appeal. In accordance with US law, the court in Connolly and Black had treated the interpretation of the obligations under the Libor code as an issue of fact for the jury. This meant that the prosecution in each trial had to call sufficient evidence to satisfy the jury that Libor could not be reasonably interpreted as allowing commercial advantage.
By contrast, in English law it is well-established that the interpretation of commercial contracts or regulatory documents resembling legislation is an issue of law for a judge to determine. So the decision in Connolly and Black did not cast doubt on the correctness of the previous decisions of the Court of Appeal as a matter of English law.
The previous two paragraphs are taken from a helpful summary provided by the court. It goes on to explain why other arguments were dismissed.
Hayes said last week that the court’s decision was inconsistent with Libor court rulings in several other jurisdictions. It was “time to hear this at the highest level”, he added.
Palombo is also expected to seek permission to appeal. The court said if the two defendants want to apply for a point of law to be certified and for permission to appeal to the UK Supreme Court they must apply to the Court of Appeal by the middle of next week.
Running through the ruling by Lord Justice Bean, Lord Justice Popplewell and Mr Justice Bryan is the principle of stare decisis, —“to stand by things decided” — or precedent, as we would now call it if Lord Woolf had succeeded in abolishing legal Latin.
The court said:
We have addressed Mr Palombo’s first ground of appeal on its merits, because it was the ground for the reference. However, we would regard the doctrine of stare decisis as preventing us from allowing the appeal even if we had taken a different view.
The point has been addressed in five cases in this court, and in each decision the court has reached the same consistent conclusion. To depart from those decisions on the basis of one decision of the US court, which was not addressing the same issue, would not, in our view, engage the residual discretion for a court of the Court of Appeal Criminal Division to depart from one of its previous decisions, let alone five.
That would be so even if the US decision contained reasoning which was relevant and persuasive, which it does not.
Precedent is an important principle. If the Court of Appeal is saying that the previous rulings were correct, it must be right to let them stand. But if the court is saying that they must stand whether they are right or not, it should not prevent the Supreme Court from looking at the issue afresh.
Updates: In addition to some very well-informed comments on this piece, other reports and comments have appeared since it was published:
Judge in Tom Hayes rate ‘rigging’ case accused of conflict of interest, The Times, 2 April.
Interest rate rigging appeal must go to top court, say politicians, BBC News, 3 April.
Libor ruling shines light on appeal court decisions, by Ken Macdonald KC, The Times, 4 April 2024
Though in response to a similar point made by Catherine Baksi in The Times on 11 April, Lord Reed of Allermuir, the court’s president, wrote:
The criminal expertise of our highest court is wide and deep: the 12 justices have, between them, about 180 years of experience in criminal law. In my case this includes prosecuting complex criminal cases before my appointment as a judge.
Lord Lloyd-Jones, Lord Hamblen, Lord Leggatt, Lord Stephens, Lady Simler and I have many years’ experience of presiding over serious criminal trials and of presiding over the criminal division of the Court of Appeal or the equivalent courts in Scotland and Northern Ireland.
Most other members of the court also have criminal experience as trial or appellate judges. Our knowledge of this area of law remains current; all of the justices have sat in criminal cases since joining the court, either in the Supreme Court or Privy Council.
In 2020 the High Court of Australia [their Supreme Court] sitting en banc allowed the appeal and quashed the conviction in the infamous case of Cardinal Pell. They concluded that there was “a significant possibility that an innocent person has been convicted because the evidence did not establish guilt to the requisite standard of proof”. In short the majority of the Court of Appeal had erred in its assessment of the evidence. In the not wholly implausible scenario of our Court of Appeal committing a similar error it is difficult to see how the case could ever reach the Supreme Court; the assessment of evidence is hardly a point of law of general public importance.
In truth the relationship between our top court and criminal law has not always been a happy one. Prior to the Criminal Appeal Act 1968 cases could effectively only reach the House of Lords with leave of the prosecution via the AG’s fiat! The need for a certificate from the CACD at least made it a judicial decision. But Viscount Dilhorne could hardly hide his disgust that the House was troubled by a not uninteresting point on the new Theft Act, which he concluded would never have attracted the AG’s consent [see DPP v Lawrence 1972 AC 262] Since when there has been a marked reluctance to engage with the Criminal law.
Criminal cases form the majority of the case load of the Canadian Supreme Court and a significant minority of the docket of the Australian, New Zealand and US Courts. In the UK, LLoyd-Jones, Hamblen, Leggatt and Simler all sat in the Criminal Division when they were in the Court of Appeal and High Court. Ben Stephens heard Criminal cases as a Judge in Northern Ireland. The Court does not lack for experience. Yet in 2023 it delivered Judgement in only one Criminal Case. [ie arising directly from a prosecution.] Ironically that gave rise to point of Company law and the Judgement was given by a Chancery Judge, David Richards. [See Palmer v North Derbyshire 2023 UKSC 23]
Unfortunately however when it does condescend to grapple with Crime its decisions have not always been well received. DPP v Smith 1961 AC 290. R v Moloney 1985 AC 905 [which had to be clarified in Hancock 1986 AC 445], Anderton v Ryan 1985 AC 560 [which it overruled in Shivpuri the following year] and the case mentioned by your contributor of Gnango 2011 UKSC 59, to select but a handful of examples.
Jogee was a rare success because with great respect it arose during Anthony Hughes' all to brief tenure on the Court
Your characteristically measured piece deserves repetition when the practising legal profession return from their Easter holidays.
I mention 3 cases in which, despite my long -retired status, I have been personally involved. First, following the Supreme Court decision in R v Jogee, in which it was accepted that juries had been misdirected for years by the law of joint enterprise, the Court of Appeal slammed the door, in R Johnson & Ors, on out of time appeals in historic convictions under the earlier discredited regime unless the prejudice was truly exceptional. My attempt to demonstrate this, as a member of Inside Justice, on behalf of the Johnson brothers fell flat. To my knowledge only John Crilly, the rehabilitated prisoner who was one of the heroes of the Fishmongers' Hall outrage (and my mentee) has surmounted this hurdle.
Second, Armel Gnango, acquitted by the Court of Appeal following his conviction for murder based on transferred malice, found his conviction restored by a majority decision of the Supreme Court, following a CPS appeal. Another of my mentees, he continues to serve a tariff sentence lengthier than his chronological age when he committed his index offence.
Third, in R v Kearney (another of my Inside Justice cases), following a decision of the Civil Division of the Court of Appeal that it lacked jurisdiction to consider his appeal against the refusal of his application for judicial review of the refusal by police to disclose forensic material which suggested a miscarriage of justice on the arcane ground that it related to 'a criminal cause or matter) the Supreme Court itself refused permission to appeal on the ground that that they had subsequently decided in R v McGuinness, an appeal from Northern Ireland, that such an application 'did not apply to a criminal cause or matter', and refused the application, with costs.
Do you need case references? they should be readily available.