Hayes, R. & Palombo, R.

Factual and Procedural Background

Appellant 1 and Appellant 2 were each tried and convicted of conspiracy to defraud for seeking to influence interest-rate benchmark submissions. Appellant 1’s conviction followed a 47-day trial in 2015 concerning the London Inter-bank Offered Rate (LIBOR); Appellant 2’s conviction followed a re-trial in 2019 concerning the Euro Inter-bank Offered Rate (EURIBOR). The Court of Appeal dismissed their first appeals.

In 2023 the Criminal Cases Review Commission referred both convictions back to the Court of Appeal, principally in light of a United States appellate decision that had taken a different view of benchmark submissions. The Court of Appeal again dismissed the appeals but certified a point of law of general public importance. The Supreme Court granted permission to appeal and, after full argument, delivered the judgment summarised below.

Legal Issues Presented

1. Whether, as a matter of law, a benchmark submission that is influenced by trading advantage is automatically not a genuine or honest answer to the LIBOR or EURIBOR question.
2. Whether the benchmark definitions require a contributor to submit the single cheapest rate at which funds could be borrowed, as opposed to any rate within a reasonable range.

Arguments of the Parties

Appellants’ Arguments

• The truth or falsity of a benchmark submission is a question of fact—namely whether the submitter genuinely held the stated opinion—not a matter of law derived from construing the benchmark definition.
• Taking trading advantage into account may be evidence of falsity but cannot legally compel a finding of falsity; that issue was wrongly removed from the jury by the trial judges’ directions.
• The Court of Appeal’s “cheapest-rate” analysis was a misunderstanding of market reality; benchmark methodology regularly required judgement within a legitimate range.

Prosecution Arguments

• The LIBOR document and EURIBOR Code created obligations that, as a matter of construction, excluded consideration of trading advantage; any submission influenced by such advantage was therefore necessarily false.
• Trial directions that equated a submission influenced by trading advantage with falsity merely reflected that legal position and did not usurp the jury’s role.
• Even if the directions were infelicitous, overwhelming evidence of dishonesty rendered the convictions safe.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Leggatt, giving the unanimous judgment, held that:

• The genuineness of a benchmark submission hinges on the submitter’s actual belief; that is a factual matter exclusively for the jury. Construction of the LIBOR document or EURIBOR Code cannot pre-determine that factual issue.
• Trial judges mistakenly conflated legal interpretation with factual truth, directing juries that any rate influenced by trading advantage was legally incapable of being genuine. This usurped the jury’s function and withdrew legitimate defences from consideration.
• The “cheapest-rate” approach adopted by the Court of Appeal in 2024 misunderstood market practice; realistic assessment often yielded a range of defensible figures.
• Errors were material: although substantial evidence could have supported convictions, proper directions might have led a reasonable jury to acquit.
• Accordingly, both limbs of the certified question were answered “no”.

Holding and Implications

Convictions QUASHED; appeals ALLOWED.

Direct Consequences: Appellant 1 and Appellant 2’s convictions are unsafe and are set aside.

Broader Implications: The judgment clarifies that in criminal cases involving opinion-based statements, the jury—not the judge—decides whether the statement was genuinely held. Benchmark-manipulation prosecutions must therefore leave the issue of falsity to the fact-finders; legal construction of industry documents cannot short-circuit that enquiry. The decision may affect other prosecutions or convictions that relied on similar jury directions but does not create a new substantive defence.