The Attorney-General has proposed plea bargaining in fraud cases, hoping to avoid costly trials. But would it work as effectively here as in the US? Kate Hanley assesses the issues
The fate of David Bermingham, Gary Mulgrew and Giles Darby, more commonly tagged the NatWest Three, may hang on the result of a plea bargain. The core evidence against the UK bankers, charged with Enron-related fraud in the US, is the testimony of senior Enron executives, Andrew Fastow and Michael Kopper, both of whom have received less harsh prison sentences in exchange for guilty pleas and assistance in implicating others. Doubtless their sworn statements will be dangled in front of the trio?s legal team as both a carrot and a stick to admit guilt.
In 2004, media giant TimeWarner negotiated a fine of $510 million (?270 million) and a promise of good behaviour ? without any admission of liability ? in relation to allegations of securities fraud. In the same year, WorldCom?s chief financial officer, Scott Sullivan, received five years? imprisonment after pleading guilty to charges of conspiracy, securities fraud and filing false documentation. He also co-operated with prosecutors in the hope of a reduced sentence.
Plea bargaining is as integral to the US legal system as fast-talking, sharp-suited attorneys. Unlike in other jurisdictions to have adopted the process, of which there are very few, it is utilised across the board, from petty crime to major federal regulatory offences.
?Plea bargaining is so deeply ingrained into the US system that it?s difficult to imagine life without it,? confirms Chicago-based Jeff Stone, head of the trial department at top US firm McDermott Will & Emery. ?If you look at fraud alone, you will see some form of plea bargain in approximately two-thirds to three-quarters of cases.?
White-collar crime has now been targeted by the UK government as an appropriate candidate for a splash of Americanism in the hallowed courtrooms of England and Wales. The Attorney-General?s report on fraud, published in July following a ten-month review, has recommended the introduction of formalised plea bargaining into fraud cases as an alternative to costly trials, which often collapse at huge expense to the taxpayer.
Consider the Jubilee Line tube extension. The two-year Old Bailey trial for alleged fraud and corruption spectacularly imploded in March at a cost of ?60 million. Its problems of complexity, delays and ailing jurors are typical of Britain?s miserable track record in tackling major fraud, which is now estimated to cost the country ?14 billion a year. Indeed, the Attorney-General even hinted that plea bargaining could be extended to other areas of criminal law (see (2006) Gazette, 27 July, 6).
Essentially, plea bargaining means a guilty plea in exchange for one or more concession, be it a shorter sentence, a lesser charge, or simplification of the facts. In particular, plea bargains could persuade lesser defendants to provide information to implicate the main players behind organised crime.
?The main benefits of bargaining are that it avoids the cost and uncertainty of trial and encourages co-operation from individuals involved in multi-party cases to give evidence against those who are more culpable,? continues Mr Stone. In addition, admission of guilt dispenses with the need for victims and witnesses to give stressful evidence during trial.
It would appear that the government is attracted by the US philosophy that some form of conviction is better than none. The reaction of UK practitioners to the Attorney-General?s proposals are muted, however. ?Plea bargaining is a good idea in principle and will certainly save money,? says Jo Rickards, a partner at leading London white-collar crime firm Peters & Peters. ?But how they plan to deal with the logistics is another matter. It?s difficult to see how it will be done fairly to all parties.?
Ms Rickards considers that negotiations prior to arrest and charge, as in the US, can be beneficial all round. But once a client has been arrested and the custodial time-limits kick in, giving proper advice on a plea bargain at an early stage before complete disclosure would be difficult. Plea bargaining in the US takes place either before or after charge, but more commonly is pre-charge.
Jeremy Summers, a partner in the fraud and regulatory department at national firm Russell Jones & Walker, adds: ?Plea bargaining is reasonable as far as it goes, so long as it doesn?t bring in a hostile incentive and is not allowed to be an excuse for the government not adequately funding the investigative agencies, because otherwise it becomes a means of justice on the cheap.?
Mr Summers points out that the measures recommended by the fraud review, which also include raising the maximum sentence from ten to 14 years, focus on fraud once a defendant is already before the courts. ?The problem is that there are not enough people going before the courts in the first place,? he says. ?Of real concern and frustration is that the main investigative bodies are fighting a losing battle against resources. Plea bargaining works in the US because the prosecution is better resourced and therefore tends to be successful. Another reason why the US system works is because Americans can impose far more lengthy and Draconian sentences.?
How plea bargaining will dovetail with the existing reductions in sentence for a guilty plea as set down by the Sentencing Guidelines Council, which allow for a cut in a custodial sentence of between one-third and one-tenth depending on what stage in proceedings the plea was given, is another issue for consideration.
Penny Darbyshire, reader at Kingston University, London, has written extensively on the issue of plea bargaining and is a strong opponent of its introduction. ?The main point of principle is that it punishes people who exercise their right to trial, a cornerstone of our legal system, which is hypocritical. You are saying that they will get a 50% uplift in their sentence if they proceed and are later found guilty. Secondly, why should a person who is genuinely guilty be rewarded? It?s the ?just deserts? principle. It?s an argument that has come up recently in cases involving paedophiles or those caught red-handed.?
Ms Darbyshire also argues that plea bargaining is racially divisive, with research indicating that non-whites fare worse on plea bargains than whites; and that sentence discounts induce some innocent people to plead guilty to avoid trial and get the case finished.
However, Mr Stone, who has practical experience of plea bargaining, dismisses the latter argument. ?I tend to believe that people don?t generally plead guilty to crimes they haven?t committed. That?s my personal experience,? he says.
Closer to home, France introduced plea bargaining into its criminal justice system in October 2004. ?Like the UK, we had a lot of debate prior to its implementation, because on the face of it, plea bargaining is completely at odds with the traditional French legal system,? explains Thomas Rouhette, a dispute resolution partner at City firm Lovells? Paris office. ?But two years on, and although no statistics are available, our experience is that overall, it is working.?
In stark contrast to the proposals for England and Wales, plea bargaining in France is limited to petty crimes that require minimum legal preparation, such as drink driving. ?It?s not considered appropriate in France for serious offences to be dealt with by a plea bargain because a proper investigation and trial is required,? says Mr Rouhette. ?Plea bargaining here is only about penalty, and even then, just for fines, never prison sentences. It is not about co-operation, or giving names of other offenders.?
Disclosing information on your co-defendant appears to be the UK government?s key motivation in introducing plea bargaining into fraud cases. Experience in the US shows there is more to be gained from chasing the ?Mr Bigs? of organised crime. But in a crim
inal justice system that prides itself on fairness, why is a defendant who is not to be believed in relation to his own charges, suddenly accepted as providing gospel truth when implicating others?
?That?s the whole essence of the defence case,? explains Mr Stone. ?The ?flipper witness? has entered into a deal with the devil to save his own skin and jurors are confronted with the decision whether or not they are to be believed.?
Things could get tricky then, if the government is to succeed in another initiative for fraud cases ? the scrapping of trial by jury. If negotiating with the prosecution is doing a deal with the devil, what does that make a judge in a non-jury trial ? God?
Kate Hanley is a freelance journalist