Court of Appeal finds council conducted Crown Court litigation through individual who was neither authorised nor exempt

York City Council engaged in reserved legal activity by conducting consumer offences litigation in the Crown Court through its Head of Regional Investigations who was neither authorised nor exempt, the Court of Appeal has ruled.

However, the Lord Chief Justice, Lord Burnett of Maldon, ruled in City of York Council, R (On the Application Of) v AUH & Ors [2023] EWCA Crim 6 that this did not render the indictment a nullity or result in an abuse of process.

The issue arose among appeals related to cases brought by York and Birmingham city councils over alleged criminality which was said to comprise consumer offences.

York has used Colin Rumford, its head of regional investigations, to run its cases in both the magistrates and crown courts.

In the High Court, HHJ Burn had found that Mr Rumford was neither a solicitor nor a barrister nor otherwise an ‘exempt person’ but refused to find that proceedings in the Crown Court were therefore a nullity and should be stayed as an abuse of process.

Mr Rumford leads a trading standards investigation and enforcement team which handles complex cases of consumer fraud perpetrated on a regional and national basis.

Hearing an appeal by an unnamed defendant against this, the Lord Chief Justice noted the conduct of litigation is a reserved legal activity.

York argued Mr Rumford could act for it as Section 223(1) of the Local Government Act 1972 provides "any member or officer of a local authority who is authorised by that authority to prosecute or defend on their behalf, or to appear on their behalf in, proceedings before a magistrates' court shall be entitled to prosecute or defend or to appear in any such proceedings, and, to conduct any such proceedings”.

Mr Rumford conducted initial proceedings in the Magistrates' Court, which were sent in October 2020 for trial in the Crown Court.

York argued it had authorised Mr Rumford to conduct the criminal proceedings and he was therefore a party to them in the Crown Court and so would have a right to conduct those proceedings personally.

The council said Mr Rumford was not acting on its behalf, but rather was the council’s legal embodiment for conducting the proceedings.

The Lord Chief Justice said this ‘embodiment’ argument, if correct, would have “far reaching consequences for the conduct of litigation and rights of audience across the spectrum of civil and criminal proceedings in which a corporation, statutory or otherwise, were a party”.

He added that in agreement with the judge, the Court of Appeal was unable to accept that paragraph 2(4)(a) of Schedule 3 of the Legal Services Act 2007 exempts an employee of a local authority from the provisions of the LSA 2007 relating to the conduct of litigation.

“Paragraph 2(4) is concerned to preserve pre-existing rights to conduct litigation (and its parallel provision in paragraph 1(6) the rights of audience) of parties to legal proceedings. At all times York was the party to the criminal proceedings. Its nomination and authorisation of Mr Rumford did not make him a party to the proceedings,” Lord Burnett said.

He added that the construction advanced by York “would drive a coach and horses through the regulatory regime of the Legal Services Act 2007. It would also impose onerous personal obligations and liabilities on the person authorised by the corporation in question in both civil and criminal proceedings.”

The Lord Chief Justice agreed s223 of the 1972 Act provided power to authorise individuals to prosecute or defend in Magistrates' Court proceedings, but “no equivalent power is given by statute for the Crown Court”.

Lord Burnett ruled though the proceedings so far were not a nullity because of York’s error.

He said it would be “a particularly capricious outcome to invalidate an indictment on the grounds that it was served by an unauthorised person when, under the rules, it might have been electronically generated automatically had the necessary arrangements been in place”.

This meant York’s draft indictment was valid. The Lord Chief Justice said there was no suggestion that the defendants could not have a fair trial on account of York failing to use an authorised litigator.

Lord Burnett said the claim for abuse of process failed as “it is difficult to envisage that a mistake of this nature could bring the administration of justice into disrepute to the extent necessary to bring the proceedings effectively to an end.

“In this case the mistake had no adverse impact on the defendants. There was no bad faith.”

The York case has six unnamed defendants and Birmingham two.

In addition to York’s litigation issue, they appealed over whether the indicted offences of money laundering and conspiracy to defraud qualified as consumer offences by virtue of “originating from an investigation into” a consumer breach and whether the councils therefore had powers to prosecute them.

York alleged conspiracy to defraud, contrary to common law, and of money laundering, contrary to sections 327(1) and/or 328(1) of the Proceeds of Crime Act 2002.

Birmingham’s indictment alleged the offences of operating an unlicensed consumer credit business, contrary to section 39(1) of the Consumer Credit Act 1974 ("the CCA 1974"), of unauthorised moneylending, contrary to section 23(2) of FSMA 2000, and of money laundering, contrary to section 327(1) and/or 329(1) of POCA 2002.

The Lord Chief Justice said the indicted offences were discovered by relevant investigations into consumer breaches and the defendants’ proposed a narrower construction was that only offences connected to the conduct of an investigation would suffice.

Having examined differing rulings from lower courts, Lord Burnett said he was unable to accept an interpretation that the offence must have its origins in the manner or conduct of the investigation, narrowly viewed, rather than anything that may be under investigation.

The narrow interpretation by defendants “achieves an absurd result. Moneylending is a listed offence, and capable of prosecution by a weights and measures authority but the money laundering which is undoubtedly designed and intended to siphon off and conceal the fruits of the primary offence is not.”

Mark Smulian