The decision to drop the misconduct charges was taken after profound "corporate failures" within Sussex Police emerged, the court heard today.
Nigel Sweeney QC, prosecuting, said the Crown had decided to offer no evidence against French, Burton and Siggs amid mounting evidence of poor practice relating to firearms operations conducted by the force.
He said that to prove misconduct, proof of good practice within the force and knowledge of it by the defendants were important prerequisites.
Mr Sweeney told the packed courtroom: "While accepting to a greater or lesser extent that mistakes were made, these defendants have always maintained that they did their honest best throughout.
"In order to prove the crime of misconduct as alleged, it is necessary to prove beyond reasonable doubt an intentional failure."
Other circumstances, such as incompetence or "doing one's honest but mistaken best" were not sufficient to prove a misconduct charge.
Mr Sweeney said the principal cause of the Crown's "change of view" and subsequent decision to offer no evidence was "corporate failures" within the Sussex force.
Asking the judge for leave to offer no evidence, he said: "In this case, proof of an intentional failure has always depended on inferences to be drawn from the evidence as a whole, including particularly the depth of departure from otherwise standard good police practice.
"It is against that background that what in this case have been called 'corporate failures' by the Sussex Police have an obvious relevance.
"Obviously, the possibility that the failures of the three defendants were merely symptomatic of a wider organisational failure was considered at the time of the decision to prosecute.
"At that time, the depth of the failures was not appreciated to be as profound as has now become apparent."
The court heard that an inquiry by Kent Police had recognised that such failures existed, uncovering little evidence of "vigorous practice" governing firearms within the Sussex force.
The decision to mount the fatal raid was taken after intelligence suggested that Ashley and his close associates received a "high value" consignment of drugs on Wednesdays, the court heard.
But Mr Sweeney told the court that the true "intelligence and information picture" did not justify the assertions and that the armed raid should not have taken place.
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