Nathan Skinner says the ‘Independent Three’ trial promises to be one of the most challenging court battles the SFO has faced

After years of preparation and preliminary hearings the scene is set for the long awaited drama to unfold in the ‘Independent Three’ trial. It promises to be one of the most challenging court battles the Serious Fraud Office (SFO) has yet faced.

Three former directors of collapsed Independent Insurance are accused of lying over the dismal state of the group’s finances, inflating the cost by as much as £250m.

Facing charges of conspiracy to defraud, and a maximum sentence of 10 years in prison, Michael Bright, Philip Condon and Dennis Lomas sat coolly in the defendants dock at Southwark Crown Court on Monday surrounded by a phalanx of specialist lawyers.

They deny the charges.

While the trial may not match for sheer impact the conviction of Al Capone on charges of tax fraud, it does promise to be historic in its own right, marking the culmination of one of the longest investigations ever undertaken by the SFO.

The stakes are high for prosecutors in the wake of the collapse of the BAE-Saudi arms trade investigation, which tarnished the SFO’s reputation.

In a press packed courtroom, chief prosecutor Andrew Baillie QC, nervously eyed by SFO officers sitting in the gallery, alleged that the defendants withheld claims information from the company’s actuary, Watson Wyatt.

“This deficiency caused one of the worst commercial disasters to have occurred in recent years in the UK,” he said.

Charges of corporate fraud are notoriously difficult to bring to court and once there, prosecutors are tasked with educating jurors on the complexities of each case.

In this instance, the prosecution has emphasised that the case is not about whether the executives were responsible for the collapse, but that they had covered up the problems.

Independent, which at its height was Britain’s fastest growing insurer, went bust in June 2001 after discovering it had insufficient funds to meet claims from policyholders.

So far the Financial Services Compensation Scheme has paid out £350m in settlement of claims made by Independent’s customers.

The trial continues.