Court of Appeal ruling in case brought by LIBOR scandal traders

On 27 March 2024, the Court of Appeal (CoA) gave judgment in the latest appeals against conviction by Tom Hayes and Carlo Palombo, two disgraced former traders found guilty of conspiring with others to dishonestly manipulate LIBOR and EURIBOR.

The latest appeal follows the finding by a US appeals court in the case of Connelly and Black (in which an appeal ruling had the effect of overturning LIBOR-related convictions obtained in a US trial) and a referral by the Criminal Cases Review Commission (CCRC). It is clear that the CCRC accepted the interpretation of Hayes’ legal team as to the meaning and importance of Connelly and Black - that the US court had ruled upon the definition and operation of LIBOR as a matter of law in a way that was in conflict with the English courts.

The CoA, in its sixth assessment of this set of cases, denied the appeals. The CoA judgment was met by much commentary suggesting injustice based on the US case findings. Other narratives that appeared in the days after include that the two defendants were scapegoats whilst the relevant senior executives were not prosecuted and that the CoA was blocking Hayes from getting to the Supreme Court by refusing to certify a point of law of general public importance (which in fact they have been content to do).

What then is the answer to all of this?

Unsurprisingly, the answer is found in the detail of the judgment by the CoA, R v Tom Hayes and Carlo Palombo [2024] EWCA Crim 304. Paragraph 4 sets the scene on what LIBOR is. Paragraphs 5 - 7, 33-34 and 37 show how the original trial judge approached the legal issues (using key documents in the case). Paragraphs 98 to 116 deal with Connelly and Black. The CoA found that the CCRC and Hayes’ team were incorrect in describing the import of Connelly and Black in the way that they had. The CoA judgment explains why in detail, but in essence the point is that the US court was focussed on the question of evidential sufficiency in the original US trial (per Rule 29, US Federal Rules of Criminal Procedure), its judgment did not rest upon any conclusion of law or the construction of LIBOR as an issue of law.

If the answer is so straightforward, why the apparent controversy?

As to the two ancillary issues above: Hayes and Palombo are not junior members of staff, or scapegoats. They are senior bank traders in the inner core of complex criminal conspiracies. As to who else should have been prosecuted, only those cases which pass an evidential sufficiency test are charged. The criminal courts are no place for weak cases. Even if there is some evidence of complicity is there enough to charge all and sundry? If not, then there is no prosecution as it would otherwise be met by judicial dismissal before ever reaching a jury. This does not stop a charged defendant putting any evidence of complicity before the jury as part of his defence.

Also, given the CoA’s judgement what could be the point of law of general importance in this case? More generally why, in a case that has seen six CoA reviews, should the Supreme Court devote precious judicial time to it over other worthy cases?