A leading city lawyer has had charges against him dropped as the CPS admits to yet another 'disclosure' failure.
A former leading Sidley Austin London finance partner, Matthew Cahill, who was accused of tax offences, has had all charges against him dropped after the Crown Prosecution Service (CPS) admitted to ‘wholesale failures’ in its disclosure process and to bringing charges against him before it had completed its investigation. Mr Cahill had been accused by the CPS of conspiring to cheat the public revenue following an investigation by HMRC into transactions arranged and promoted by Zeus Partners. Zeus was alleged to have sold high-risk investment schemes that generated tax relief for investors. Over 400 city professionals and other high earners invested in the schemes but Mr Cahill, along with a KMPG partner and a JPMorgan banker, were the only three investors selected for prosecution. Mr Cahill was not involved in any of the transactions in a professional capacity. Commenting, Sidley Austin London managing partner Matthew Dening said: 'The firm was very pleased to learn of this outcome and, in particular, to learn that this ordeal is over for Matthew.' David Corker of Corker Binning, the law firm representing Mr Cahill said: 'The admission of the CPS that they brought charges before the investigation was complete was contrary to the rule of law and led to unnecessary suffering and personal losses for Matthew and his family.'
Capital markets star
Mr Cahill joined Sidley Austin’s London office in 2012 from Clifford Chance, where he had worked for two decades. He was one of the youngest equity partners of his generation at Clifford Chance and led Clifford Chance’s capital markets practice in Tokyo for eight years. He practiced as a structured finance lawyer in London and also spent time as a capital markets partner with Clifford Chance in Abu Dhabi. One major deal was the bailout of the Bank of Cyprus with EUR 10bn funding from the Troika in 2013, becoming the first bank in Europe to bail-in depositors. Mr Cahill acted for the Bank of Cyprus as well on a later instruction to act on the bank’s EUR1bn equity raise which saw his team and him win Sidley Finance Team of the Year at the Lawyer Awards in 2015.
CPS and HMRC launch investigations
The CPS has now commissioned an internal investigation into the issues raised whilst HMRC’s internal governance team is also conducting a review relating to certain aspects of the case. The Code for Crown Prosecutors provides that charges should only be brought after an investigation has been completed. The prosecution submitted a written Statement of Position to Birmingham Crown Court in which it admitted “wholesale failures” in the disclosure process and a “clear and stark” failure to follow some lines of inquiry relating to the alleged role played by HSBC which provided structuring advice to Zeus Partners and arranged a tax opinion from a leading tax QC, which was made available to investors. Following the dismissal of charges, the prosecution replaced its counsel, Mr Andrew Wheeler QC and Mr Stuart Trimmer QC, with a new legal team led by Ms Helen Malcolm QC. The new legal team submitted the Statement of Position to Birmingham Crown Court in which the prosecution failures were admitted.
Wasted costs application
The failure of the CPS to comply with its obligation to disclose all material information which could undermine the prosecution case or assist the defence case has recently led to the collapse of a number of recent well-publicised rape cases. Following the dropping of all charges, Mr Cahill has made an application for costs against the prosecution. The prosecution has accepted that the high threshold for making a "wasted costs" application has been met as it made "clear and stark" errors. The prosecution had originally charged 11 persons, including three individuals from the promoters, Zeus Partners, two financial advisers, two from a film production company and a tax adviser to Zeus Partners.