Expert View: What do we have to do to get a fraud-trial conviction?

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The Independent Online

Richard Scrushy, the former chief executive of Health South, stood trial for orchestrating an enormous accounting fraud at the company, estimated at $2.7bn (around £1.5bn). The prosecution appeared to have a strong case. The original 80 charges were whittled down to 35. No fewer than 15 former executives admitted the fraud, including the five former financial officers, each of whom testified against Scrushy. One was even wired to record evidence. And yet, Scrushy walked away a free man. The $2.7bn is still missing.

As in so many of the recent US fraud trials, the comic elements were to the fore. Mr Scrushy, a former petrol pump attendant/rock artist, decided to start a religious talk show during the trial, where he was joined by preachers for free prayer. His supporters in court kept up a veritable hallelujah chorus and chanted "God is great" on his acquittal. The defence lawyer managed to convince the jury that every one of those five financial officers was a "lying rat," and wore a tie decorated with rats for his summing-up speech.

On the other hand, there was real horror in the Hamptons at the comments made by jurors following their verdict. The reasons for acquittal ranged from the sublime to the ridiculous. One juror even commented that he would only have found Scrushy guilty of fraud if the police had found his fingerprints on documents.

This brought to mind the UK debate on complex fraud trials. Lord Goldsmith announced last month that from January 2006 prosecutors would be able to apply for a "judge-only hearing" where trials were likely to be complicated or lengthy. This followed the collapse of the notorious Jubilee Line fraud case in March after two years and some £60m of costs.

This proposal has led to uproar in the legal profession, suspicious guardians of our constitutional rights - in this case dating back to Magna Carta. What a dangerous principle it is if complexity is the argument. Consider the very difficult DNA evidence now common in murder trials. The Government seems to have been high-handed in its lack of consultation, and in acting so quickly - ahead of the report it commissioned from Lord Wolf on the Jubilee case.

One rumour is that it has found it necessary to act ahead of a particularly complicated trial coming up. The Serious Fraud Office has apparently been working on an extremely large case for three years alleging drug price-fixing in the NHS.

But it is wrong to argue that this is a new problem or that the Government is acting quickly. There has been a long history of failure to convict white-collar crime - consider Guinness, Wickes, Blue Arrow, Maxwell. Lord Runciman recommended changes in his Royal Commission report 12 years ago and independent studies of jury behaviour give worrying results. Middlesex University criminologists found that fewer than half of jurors understood everything that was going on in court.

Perhaps an alternative to judge-only trials would be trials with a specialist jury made up of financial professionals - groan. Thinking of acquittals like Scrushy, we must do something. In the words of Lord Goldsmith, "We can't have a situation of easy-to prosecute blue-collar crime and unprosecutable white-collar crime." Hallelujah.

christopher.walker@tiscali.co.uk

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