The government is facing a legal challenge to the nomination of CMC Markets’ founder Peter Cruddas for a peerage after it emerged he had donated £500,000 to the Conservative Party three days after his elevation to the House of Lords.
Ahead of taking legal action, the not-for-profit Good Law Project sent a letter to the government on 11 June, laying out its intentions to challenge Cruddas’s peerage appointment on the grounds it was unlawful.
The House of Lords’ appointment commission advised against Cruddas being given a peerage last year, but the government decided to ignore that advice.
The Good Law Project, which uses legal challenges to protect the public’s interests, said it thought the decision to appoint Cruddas to the House of Lords was “unlawful”.
“We think a fair-minded and informed observer, presented with the facts of the matter, would conclude that there was a real possibility or danger of bias in the defendant’s decision making. We also think that the Prime Minister took legally irrelevant considerations – past donations and the prospect of future donations – into account in making him a baron,” the Good Law Project said on its website.
CMC Markets was contacted for comment.
In the Good Law Project’s 11 June letter, it proposed a judicial review of the decision to nominate Cruddas for a peerage.
It also asked for any communications regarding the decision to be shared and gave the government seven days to respond.
Lord Cruddas was formerly the Conservative Party’s treasurer but resigned after TheSunday Times accused him in 2012 of offering access to key government ministers for cash.
Cruddas sued TheSunday Times for libel and won, but on appeal, his damages were reduced and a court found that much of what was alleged in the article was “substantially true”.
A Downing Street spokesperson said: “All individuals are nominated in recognition of their contribution to society and their public and political service.
“Lord Cruddas has a broad range of experiences and insights across the charitable, business and political sectors which allow him to make a hugely valuable contribution to the work of the Lords.”
Barrister Jolyon Maugham’s Good Law Project said it had instructed law firm Bindmans and barristers Dan Squires QC and Alice Irving to handle the claim.
Cruddas is one of the wealthiest people in the City, with TheSunday Times Rich List estimating his and his wife’s combined wealth at £1.3bn.
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