The commissioners' decision could lead to the quashing of the former Guinness chairman's convictions for false accounting and theft for his part in the illegal multi-million pound operation to prop up Guinness shares while the company battled for control of Distillers, the drinks company.
The ruling that Saunders was denied a fair trial because he was 'compelled to incriminate himself' underlines Europe's determination to protect a defendent's or suspect's right to silence. The ruling will almost certainly be upheld by the European Court of Human Rights.
Next month the Criminal Justice Bill returns to the Commons with its proposals to allow magistrates and judges to draw inferences of guilt from a suspect's decision to refuse to answer police questions, thus sweeping away the 300-year-old right of silence and the presumption of innocence.
But yesterday, in the wake of the Saunders ruling and another involving the French government, Dr Stefan Frommel, a European law professor, said the proposal is doomed to fall foul of Strasbourg, breaching Article 6 of the Convention on Human Rights, which guarantees the right to a fair trial. 'Instead of restricting the right to silence, the Government should introduce it into English law,' Dr Frommel said.
'The Government squanders untold millions of pounds by defending every year in Strasbourg, cases that a first year law student knows it will lose.'
Anthony Scrivener QC, former chairman of the Bar, warned: 'Michael Howard seems to have forgotten that Britain is in Europe. The right of silence will be upheld by Strasbourg and, once that happens, Mr Howard will not have done much good for crime. His legislation will simply have ensured that someone gets off.'
But yesterday a Home Office spokeswoman said there were no plans to change proposals in the Criminal Justice Bill.
The right to silence has already been eroded in this country in areas relating to white-collar crime. Rooted in civil insolvency cases, now no less than five statutes give fraud investigators widespead powers to compel a witness to give evidence or face two years imprisonment. They are the Companies Act 1985, the Financial Services Act 1986, the Insolvency Act 1986, the Banking Act 1987 and the Criminal Justice Act 1987.
British courts have in the past allowed the evidence gained in this way to form the basis of a prosecution - such as in the Guinness case, where information gathered by Department of Trade and Industry investigators formed the basis of a prosecution by the Serious Fraud Office.
Most recently the House of Lords stretched the law further by granting SFO investigators the right to continue to compel a suspect to give evidence, even after he or she had been charged.
Tomorrow the Government may be dealt its second blow in relation to DTI investigations, when the court in Strasbourg delivers its judgement in the case of the Fayed brothers, owners of the House of Fraser group, which includes Harrods in London. Following a critical DTI report into the House of Fraser takeover, the brothers argued that the UK was alone among European Council countries in denying its citizens an effective remedy if the state labels them dishonest without the right to a fair trial.
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