Pabon v R: Court of Appeal says it has no power to award interest on refunds after LIBOR convictions quashed

The Court of Appeal (Criminal Division) has ruled that it has no jurisdiction to award interest on confiscation and prosecution costs sums repaid to traders whose LIBOR and EURIBOR convictions were quashed. It nonetheless said that fairness requires the Serious Fraud Office and HM Courts and Tribunals Service to pay the interest they had previously agreed to pay.

In Pabon & Ors v R [2026] EWCA Crim 1457, Edis LJ, Vice-President of the Criminal Division, gave the judgement of the court, sitting with Goose J and Moody J. The decision follows the court's ruling of 7 October 2026 quashing the conspiracy to defraud convictions of five appellants on references from the Criminal Cases Review Commission. Those appeals followed the Supreme Court's decision in R v Hayes; R v Palombo [2025] UKSC 29.

The Supreme Court's precedent

Statute provides for interest on refunded legal aid contributions, but not on costs or confiscation sums. As far as the court was aware, no such interest had been awarded since 1907 until the Supreme Court did so in Hayes and Palombo. That order set rates of 2 per cent to the end of 2021 and 5 per cent thereafter, compounded annually, in order to reverse the financial effects of the quashed orders. It gave no further reasons.

The parties and HMCTS, which intervened as paying party on the confiscation refunds, put forward an agreed order replicating those terms. The court questioned its power to make it.

A statutory court with limited powers

The appellants relied on the residual jurisdiction of an appellate court to avoid real injustice in exceptional circumstances, as recognised in Taylor v Lawrence [2002] EWCA Civ 90 and applied to the Criminal Division in R v Yasain [2015] EWCA Crim 1277.

The court rejected that argument. It is a creature of statute and has no express power to compensate those whose convictions are quashed, a function Parliament has reserved to the Secretary of State under section 133 of the Criminal Justice Act 1988. Refunds follow from quashing as a matter of law rather than by order of the court. Section 11A of the Criminal Appeal Act 1968 preserves a right to recover confiscated sums as a debt but does not give the Criminal Division jurisdiction over such claims.

A civil court could probably award interest under the restitutionary authorities, including Nykredit v Edward Erman [1997] 1 WLR 1627 and Delta Petroleum [2020] UKPC 23. That jurisdiction is more generous than an exceptional circumstances test, so leaving the issue to the civil courts caused no real injustice. Nor could the Criminal Division hold an implicit power to award interest on a debt it cannot itself award.

The court added that its stretched resources were a further reason to observe the limits of its jurisdiction scrupulously.

Not bound by Hayes and Palombo

The court held that it was not bound by the Supreme Court's order. Rule 29(1)(d) of the Supreme Court Rules 2009 expressly allows that court to award interest, and the Criminal Division has no equivalent rule. The argument before the Supreme Court had also been materially different.

Fairness

The court acknowledged that it would be obviously unfair to deny Colin Bermingham interest when Carlo Palombo, convicted in the same trial on the same evidence, had received it. The paying agencies had withdrawn from the agreed position only because the court raised the jurisdictional question. Although it declined to make an order, the court said fairness required the SFO and HMCTS to honour their commitment. It hoped further litigation would not be needed.