The SFO face a £6m bill for “cataclysmic” changes causing Celtic Energy prosecution to collapse

Published: 13/02/2015 | News

The High Court has today ordered the SFO to pay the Defendants’ costs of the failed Celtic Energy prosecution. The costs exceed £6 million. They will be assessed by the High Court.

The Defendants, a retired consultant solicitor, Eric Evans, his professional partner, Alan Whiteley, and assistant solicitor, Frances Bodman, had set up a complex commercial transaction involving opencast mining sites and restoration obligations. A fifth defendant, Stephen Davies QC, had advised on the legality of the scheme. Central to the scheme was Celtic Energy Ltd, South Wales’ most successful mining company, whose 100% shareholder, Richard Walters, and their finance director, Leighton Humphreys, were also charged.

Mr Evans and Mr Humphreys had always vehemently denied having done anything wrong and were indeed keen to show that their conduct was commercially adept.

The case was dismissed by a High Court Judge, Mr Justice Hickinbottom, in December 2013. The SFO’s attempt to resurrect the prosecution through an application for a voluntary bill of indictment failed in September 2014 when a Court of Appeal Judge, Lord Justice Fulford, dismissed their application.

The High Court (Mr Justice Hickinbottom) has today ordered the SFO to pay the Defendants’ costs which total £6 million. The costs will be assessed.

The Court described the SFO’s legal analysis of the case, as being subject to “regular, cataclysmic change”.

The commercial scheme was devised by highly respected commercial solicitor, Eric Evans. The Court found that the SFO had first pegged its case upon a legal opinion of Stephen Davies QC, a leading insolvency barrister. He was alleged to have been paid £250,000 to change his mind about the state of the law; so that his views coincided with Evans’. The SFO later conceded that Messrs Evans and Davies were correct in their analysis of the law and that the SFO had been wrong. The SFO proceeded repeatedly to change their case to circumvent complex arguments of the Defence.

The Court found that the changes were “fundamental”. Each version of the SFO’s case was “destined to fail in any event”. “The case presented … changed with the wind, most iterations in turn collapsing under the slightest breeze, to the real prejudice of the [Defendants]”. “[The initial] case … had no realistic prospect of success, as the SFO belatedly accepted. The other iterations were attempts to save a fatally-holed ship, that presented as a sequence of different cases that stood no real prospect of success or were in essence too late”.

The Court found in, wholly exceptionally, awarding criminal costs and in awarding civil costs on an indemnity basis that “…the SFO never approached this case with the requisite degree of legal analytical care or precision”.

Eric Evans, was represented by Patrick Harrington QC, John de Waal QC and Ben Douglas-Jones. They were instructed by Phil Williams, Blackfords Solicitors, South Wales’ leading fraud specialists.

Author: Patrick Harrington 1993 Farrars (