R v Pabon
Alex Pabon, a former Barclays trader, was convicted of conspiracy to defraud for rigging the Libor (London Interbank Offered Rate) interest rate in 2016 after a three month trial at Southwark Crown Court. A number of others were convicted at the same time, the evidence principally being the content of communications between those individuals and Mr. Pabon prior to the Libor submission. They chose the figure which most benefitted their own bank and themselves with a view to personal promotions and bonuses etc.
In bringing the case to trial the SFO (Serious Fraud Office) used two expert witnesses one of whom, Saul Haydon Rowe, proved to be ‘disastrous’, failing to comply with even the most basic duties of an expert witness. He had been instructed by the SFO to provide an expert report on ‘explaining the workings of an investment bank, inter-dealing brokerage and related financial instruments and trading terms used by individuals within these institutions.’ In fact, it emerged that he had not worked as a trader since 2000, he had never worked as an interest rate derivatives trader, a cash desk trader or a LIBOR submitter and appeared to have no knowledge of the LIBOR submitting process, making him no more than ‘an enthusiastic amateur.’ He had signed declarations of truth and understanding in his report stating that he had complied with all his duties without reading the applicable rules. He had disregarded the trial judge’s warning not to disclose or discuss any details of his evidence with others, particularly whilst it was in progress. It emerged during the Appeal (of which see below) when the Defence pushed for further disclosure, that Mr. Rowe had been secretly conferring with numerous unknown advisers by text and email. He had passed on criminal investigative material and evidence from the SFO in his efforts to understand it and asked for advice from others. He failed to report with any detail or accuracy how he had formed his opinions and knowingly gave evidence outside his area of competence.
Rather fail with honour than succeed by fraud.”
Mr. Pabon, with his solicitor’s advice, decided to appeal his conviction on the basis that it was unsafe because the evidence given by Mr. Rowe, and upon which the prosecution relied, was incomplete and inaccurate.
Unfortunately for Mr. Pabon although Mr. Rowe’s evidence had ‘significant failings’ it had ‘no impact on the outcome of the case’ and he lost his appeal. The key issue at trial was Mr. Pabon’s dishonesty and Mr. Rowe’s evidence and behavior did not alter that dishonesty or affect the safety of his conviction. The Judge went on to say that ‘The instruction of Rowe turned into an embarrassing debacle for the SFO, all the more so given the high-profile nature of these cases.’ The Court did note however that Mr. Rowe had given evidence in two previous LIBOR prosecutions, and that this was the first time that any questions of doubt about his expertise had been raised.
During the Court of Appeal hearing the three Judges made their criticisms of Mr. Rowe’s performance and what it revealed very clear. Their subsequent guidance on the role and purpose of expert evidence make this case interesting and instructive. Lord Justice Gross in his judgement states that ‘the duty resting on an expert witness is so fundamental that where it is abused, the entire process is affected.’
First and foremost, an expert must assist the Court, and should give clear and impartial evidence to help the Court reach a decision.
When instructing experts, lawyers should always be very careful to ascertain the extent of the witness’s expertise and engage an expert of a suitable calibre, however difficult that might be. There should be thorough research and continual assurance on those they seek to instruct. Both instructing party and expert have an equal role to play. They must ensure that the expert is fully aware of his obligations to the court under the Criminal Procedural Rules and not merely rely on his own assurance that he has signed the necessary declarations as to his conduct and duty. It is the expert’s duty, under Part 19 of those rules, to let the Court know if any questions (during cross examination or otherwise) would require answers which would be outside their area of expertise.
Experts should not ask others to write some of their report and then pass it off as their own. It emerged during the Appeal that a colleague of Mr. Rowe’s had drafted sections of his report, a fact which Mr. Rowe did not disclose.
It is understood that Mr. Rowe has resigned from acting as expert witness. After investigations by the Metropolitan Police, who took legal advice, it has been decided not to prosecute Mr. Rowe as there was insufficient evidence that an actual offence had been committed. Mr. Rowe denies any intention to mislead.
A postscript was added to the judgement:
“76. The instruction of Rowe turned into an embarrassing debacle for the SFO, all the more so, given the high-profile nature of these cases and notwithstanding that, in the event, it has had no impact on the outcome in this case. We pressed Mr Hines as to whether there was an internal report, dealing with lessons learnt. We subsequently received a helpful letter from the SFO’s General Counsel, dated 27th November 2017, stating that there was no such document but that there had been extensive internal discussions resulting in the conclusion “…that Rowe’s conduct resulted from a failure of integrity on his part rather than a failure of SFO policies or procedures”. The SFO undertook to look again at the matter to see whether there was any way in which it could reinforce expert witnesses’ awareness of their obligations under the Crim PR.
77. In fairness to the SFO, this was the third time that Rowe had given evidence in LIBOR trials and the first time any questions concerning his expertise had apparently arisen. Nonetheless, there is no room for complacency and this case stands as a stark reminder of the need for those instructing expert witnesses to satisfy themselves as to the witness’ expertise and to engage (difficult though it sometimes may be) an expert of a suitable calibre.”