Lord Justice Mann said the year-long Old Bailey trial - the second-longest criminal case in English legal history - was an ordeal for the jury and a daily 'punishment' for the accused.
Its length and complexity were directly attributable to the length and complexity of the indictment faced by the accused, he said. The prosecution had a heavy responsibility not to overload indictments.
The trial judge, Mr Justice McKinnon, did reduce the size of the case, but at a very late stage after prosecution and defence counsel had addressed the jury. He should have split the case into separate triable issues much earlier.
Lord Justice Mann, sitting with Mr Justice Ognall and Mr Justice Buckley, said: 'We think in this case, and with respect to him, the judge should much earlier have used his power of severance to achieve then what he sought too late to do.'
A robust and early use of the power of severance did have disadvantages - a second Blue Arrow trial was still pending. But it was the only power available to limit issues to secure a manageable and fair trial.
'Judges must not be reluctant to exercise their power in order to secure that end but - and importantly - they will seldom have occasion to do so if, when performing their difficult task, the prosecuting authorities frame indictments which have due regard to the limitations of a jury trial.'
The appeal judges were giving their reasons for quashing earlier this month convictions of conspiracy to defraud against four City advisers who stood trial in the Blue Arrow case. The clearing of the four and the earlier acquittal of other defendants means that no one now stands convicted as a result of the trial.
The judges had cleared Jonathan Cohen, 48, David Reed, 44, and Nicholas Wells, 37, all senior executives of County NatWest, the merchant banking arm of the National Westminster Bank, and set aside their 18-month suspended prison sentences.
Martin Gibbs, 62, a stockbroker and former director of UBS Phillips and Drew, also had his conviction and 12-month suspended sentence quashed.
Three other accused and three corporate defendants were acquitted during the trial. The four cleared on appeal were awarded their trial and appeal costs from public funds.
They had been convicted on 14 February this year of conspiring to mislead the markets over the result of the 1987 pounds 837m Blue Arrow rights issue - launched to finance the company's takeover of the larger American employment agency Manpower - by secretly buying shares themselves to raise the take-up level announced to other investors.
The trial judge decided, a month before the jury retired, to restrict the case to the 'late take-up' issue and tell the jurors to ignore 75 per cent of the evidence.
It was that decision that led the appeal judges to intervene. Lord Justice Mann said that the decision to sum up only in regard to late take-up constituted a 'material irregularity' in the course of the trial.
The accused were in no way to blame for the length of the case, Lord Justice Mann stressed. The trial judge himself had realised by 10 January this year that the trial had become unmanageable.
'This trial will rightly be regarded by the public as having been a costly disaster,' Lord Justice Mann said. The jury must have found the case an ordeal and the defendants must have regarded their daily experience of the trial as in itself a punishment.
The Court of Appeal had thought it 'appropriate to consider how the disaster, ordeal and punishment came about in order that a lesson can perhaps be learnt'.Reuse content