By Kirstin Ridley
LONDON (Reuters) - The FCA will next week appeal a court decision to throw out a fraud case amid a row over government cuts to the legal aid budget that could delay or derail a raft of high-profile trials scheduled for this year and next.
Operation Cotton, an alleged land banking case brought by the Financial Conduct Authority (FCA), unravelled last week after five defendants failed to find senior lawyers prepared to represent them in court at new legal aid rates.
Prosecutors of financial crime cases worry that the dispute between the so-called Bar (barristers) and Ministry of Justice, which has sparked mass walkouts by lawyers, will leave some defendants unable to receive a fair trial if lawyers boycott so-called VHCCs (Very High Cost Cases) because of legal aid cuts.
The senior judges overseeing next Tuesday's closely-watched one-day hearing at London's Court of Appeal are not expected to reach a judgment on Tuesday.
But their decision, when it comes, could have ramifications for some of Britain's highest-profile white-collar cases, such as alleged insider dealing or even alleged Libor interest rate manipulation cases.
The FCA is hoping to bring to trial in September its largest and most sophisticated insider dealing case, dubbed Operation Tabernula, after arresting 10 men and charging nine over the last four years.
However, five of the defendants in that case have asked not to enter a plea because they have failed to find lawyers willing to represent them in court.
The Ministry of Justice has emphasised that even after cutting the taxpayer-funded legal aid bill by around 215 million pounds per year, it will still reach an annual 1.5 billion pounds in England and Wales.
But senior lawyers have voiced outrage at cuts that will see rates paid for the most complex, lengthy and costly cases slashed by 30 percent.
Judge Anthony Leonard last week threw out Operation Cotton, saying it was the responsibility of the government to provide adequate representation at public expense and that there was no "realistic prospect" of senior lawyers being available to try the case even if it were adjourned to next January.
The case was a victory for Alex Cameron, a senior lawyer and brother of British Prime Minister David Cameron, who represented the defendants free of charge and argued for the case to be dismissed, saying the defendants were unable to get a fair trial through no fault of their own.
The FCA alleges that between 2008 and 2011, the defendants were part of a scheme to buy, or pretend to buy, sites that were divided into sub-plots and then aggressively marketed to often vulnerable members of the public under a series of false pretences.
(Editing by Pravin Char)