Rarely can the Supreme Court have made such trenchant criticism of a legal ruling by a trial Judge, as that directed at Mr Justice Cooke in R v Hayes 2025 UKSC 29.
The case concerned Mr Justice Cooke’s direction to the jury that, as a matter of law, a submission of a London Interbank Offered Rate (LIBOR) could not be genuine, or honest, if the trader took into account his own bank’s commercial interests. The defence had contended that this was a matter of fact that should have been left to the jury to consider. LJ Legatt, delivering the Judgment of the whole court agreed with the defence submission.
Mr Justice Cooke had conflated law and fact in his directions to the jury, by essentially treating the proposition that submissions should comply with the LIBOR definition as inter-changeable, with the question of whether it represented the “genuine” opinion of the submitter. In doing so, he had “usurped the function of the jury” by requiring them to accept that any submission where the trade took into account the interests of his own bank could not be construed as “honest” or “genuine”.
It should be noted, that the defence submission that Mr Justice Cooke’s ruling had been defective, was emphatically rejected by the Court of Appeal both at an interlocutory hearing and following a referral by the Criminal Cases Review Commission. In the latter appeal, they stated they saw no arguable merit in the point and even if they had, they would have rejected it given the fact that the Court of Appeal had previously rejected it as a bad point. Nevertheless, they certified the point as being of general public importance for determination by the Supreme Court.
In his Judgment, LJ Legatt criticises the Court of Appeal for its conclusion that previous case law supported the proposition, that where the truth or falsity of a statement turns on the meaning of an instrument, it is a matter for the court to determine falsity as a matter of law, not fact. This, as LJ Legatt observed, “…is on any view an obvious mistake…it is no part of the court’s role at a trial with a jury to determine whether a statement of fact (including that a person genuinely holds an opinion) is true or false.”
Questions have rightly been asked about the process whereby such a transparently questionable ruling could have been upheld by successive panels at the Court of Appeal, thereby compromising the fairness of subsequent trials. Consequent convictions have destroyed the lives and careers of the defendants affected. No doubt their respective legal teams will be examining the recent Judgment with great care. Further appeals can be anticipated.
Equally, there have been a number of regulatory findings based upon similar reasoning to that applied by Mr Justice Cooke. No doubt these will also be the subject of review.
Author: Stephen Sharp, Partner at Bivonas
Note: Bivonas represented Stylianos Contogoulas, a former Barclays trader prosecuted by the Serious Fraud Office for conspiracy to defraud by rigging the LIBOR. He was acquitted following a re-trial. Bivonas Law LLP also represented a number of former traders who were the subject of regulatory findings as a result of the LIBOR scandal.