A judge has halted a high-profile fraud trial after the defendants were left unrepresented because of legal aid cuts.

The unprecedented ruling, in one of the first prosecutions brought by the Financial Conduct Authority, has raised concerns about impending white-collar trials where defendants are without barristers because of a reduction in the rates they are paid.

Barristers are currently refusing to take on so-called “very high cost cases” (VHCCs) at the new legal aid rates – their fees have been cut by 30 per cent. This has left some defendants unrepresented.

Defendants in at least six other forthcoming complex white-collar cases – including the FCA’s biggest-ever prosecution of alleged insider trading codenamed Tabernula – are affected.

In the case of Tabernula, which is the result of a complex and costly four-year investigation by the regulator, four of the six defendants are without representation from barristers.

The FCA, which is prosecuting the insider trading case, has already said it is loath to bring its case against individuals who are unrepresented.

In Thursday’s ruling, Judge Anthony Leonard said five defendants in an alleged land banking fraud should have their cases stayed – in effect thrown out – because they were unable to find barristers to represent them at the new legal aid rates.

Their trial was due to begin at Southwark Crown Court next week.

Its demise will be seen as significant for the Ministry of Justice, which has pushed through legal aid reforms in the face of opposition from barristers.

The ruling, which could face an appeal, is a victory for Alex Cameron QC, a high profile barrister and the prime minister’s brother.

He acted free of charge for the five defendants, arguing earlier this week to Judge Leonard that the men could not receive a fair trial because they have been unable to find legal representation.

Judge Leonard refused to adjourn the case, known as Operation Cotton, saying the state should not “benefit from its own failure” to provide representation for the defendants.

He noted that there are eight other trials, arising from six prosecutions, which are due to begin between September 2014 and September 2015. These will require about 21 defendants to be represented, in addition to the defendants in the land banking prosecutions.

The legal aid stand-off continues. Nigel Lithman QC, chairman of the Criminal Bar Association, said: “Each advocate who had signed a contract to undertake a VHCC case was presented by the government with a choice: either to accept a 30 per cent cut in their fees or to terminate their contract. They chose to terminate their contracts.

“Since then, we understand that no barrister has signed a new contract to undertake a VHCC at the reduced rates.” he added.

Nicola Hill, president of the London Criminal Courts Solicitors’ Association, said she was also worried that more cases could be abandoned.

“We’re particularly concerned about the increasing number of defendants who are appearing in court without representation at all because they can’t get a solicitor.

“They face serious criminal charges without being able to defend themselves properly. Courts are disrupted and the taxpayer ends up paying the extra costs of delays,” she said.

The MoJ said: “Barristers have refused to work on this case – and a number of other very high-cost court cases – because they do not agree with savings the government is making to legal aid.”

It said that, even after the fee cuts, a QC could receive £100,000 on this sort of case and a junior barrister £60,000.

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