Deborah Orr: How can you tell if witnesses are lying if they are allowed to remain anonymous?

David Blundell, the chief crown prosecutor for the West Midlands, spoke rather too soon: "The special measures used in this case set a precedent. The level of anonymity used and the lengths gone to maintain it were more stringent than anything used in this country. They have set a benchmark that will subsequently be applied to future trials where gang activity, terrorism and organised crime play a role."

His comments were made in 2005, in the wake of the prosecution of four men, Marcus Ellis, Michael Gregory, Rodrigo Simms and Nathan Martin, for the notorious murders of Charlene Ellis, 18, and Letisha Shakespeare, 17, outside the Uniseven hairdressing salon in Aston, Birmingham on New Year's Day, 2003.

The special measures he spoke of were stringent indeed. Witnesses gave evidence under pseudonyms, from behind screens protecting them from the gaze of all but the judge, jury and barristers, using voice distortion technology. Crucially, efforts to hide the identity of the witnesses led inexorably to restrictions on cross-examination. The defence counsel could not ask any questions which might lead the witnesses into identifying themselves. The four men did not know who their accusers were, and therefore could not explain why they might be offering false evidence against them.

These restrictions, said Nigel Rumfitt, QC, representing Marcus Ellis (the brother of one of the dead girls) in his closing speech, were "unique". Employing the pseudonym he was obliged to use in court, he declared that: "Mark Brown is a liar and the way he has been allowed to do it is repellent – 1,000 years of law have been tossed out of the window."

Both Rumfitt, and Blundell, were wrong in one significant particular. The special measures used in the trial of these four men were not unique, and did not set a precedent. Last week five law lords granted Iain Davis leave to appeal, after they ruled that the use of the same restrictions in his trial, a year before in May 2004, also for a double murder, were "contrary to the common law of England, inconsistent with article 6(3)(d) of the European Convention on Human Rights and rendered the appellant's trial unfair".

I remember the murders that Iain Davis was convicted of very well, because my good friend knew people who knew people who had been at the party where the crime was committed – this time on New Year's Day, 2002. She had been very shaken up by the shooting, largely because the two deaths had been notably gratuitous, even by today's standards. Hours after the crime, she knew many of the details.

Ashley Kenton, 22, had been murdered after what had seemed like a trivial argument. The same bullet had killed Wayne Mowatt, 29. It had passed through its intended target, then through a partition wall, before fatally injuring its unsuspecting second victim. Around 40 people were said, at first, to have been at the party when the shooting occurred. Yet the police had great difficulty in obtaining evidence. Even my friend's contact changed her story, and started to tell everyone she knew that she had made a mistake, and had no connection with the crime after all.

Just seven people eventually came forward, all of them insisting that they would be in fear of their lives if it was discovered that they had spoken to the police. Three of those people, the only witnesses in the case who identified Davis as the gunman, gave evidence at the trial, all of them provided with full anonymity. Without them, there would have been no case.

The law lords agree that "1,000 years of law have been tossed out of the window". In their decision they point out that Britain resisted anonymous evidence even when continental Europe embraced it, at the terrible time of the Inquisition. They point out also that the submission of such evidence gained a hold during the Star Chamber hearings that became an iconic example of state-sponsored terror and injustice in this country.

They point out that even during the Irish terror campaign, when intimidation was just as great a factor as it is now, the temptation to resort to full anonymity was resisted. They point out that in the US, where gang-related activity similar to that in Britain is an enduring problem, witness anonymity has been avoided, in line with the sixth amendment of the US constitution.

It is all stirring stuff, reminiscent of the gist of David Davis's resignation speech, in which he announced that he intended to trigger a by-election in order to highlight the dangers of the steady erosion of Britain's "ancient civil liberties". This latest crisis is just one such example of this erosion, although so far neither the Conservatives nor Davis himself have had much to say about the matter in hand.

The Iain Davis ruling prompted the Justice minister, Jack Straw, to announce last week that he is seeking to draw up "emergency legislation" that will protect the Government's plans to maintain and extend the use of anonymous witnesses. The law lords agree that if such evidence is to be made permissible in court, then it is Parliament's business to work out how it can be done.

This is a blow to the Government. These special protective measures have thus far been accepted so unquestioningly that Louise Casey, in her report to the Cabinet office last week, looking into reconnecting the public with the criminal justice system, suggested that such measures should be used not only in cases involving "gang activity, organised crime, and terrorism" but also those involving elderly or disabled witnesses.

Witness anonymity has for several years now been seen as a useful tool in the pursuit of justice. The police sometimes find it impossible to persuade witnesses to testify unless their anonymity can be assured. No one doubts that people, and entire communities, are truly frightened and may well have good reason for their fear.

Yet the decision of the law lords has detached the wheels from the bandwagon. The collapse yesterday of a £6m Old Bailey trial, involving two men accused of killing under contract the businessman Charles Butler, is only the first bleak illustration of how far-reaching this decision may prove. It is suggested that appeals will now be made in up to 40 cases. The four men who were found guilty of killing Ellis and Shakespeare are likely to be among the appellants.

Whatever Straw may say, and however abstract the law lords ruling may at first glance seem, it is very difficult to work out exactly how those wheels might be put back on. The issue of witness anonymity is one of those which seems impossibly high-flown and idealistic when it is looked at in relation to specific cases, and absolutely sound when it is examined dispassionately.

When I mentioned to my friend that the murders that had upset her so much more than six years ago were now causing upset on a grand scale, she was scathing, and railed about detached judges having no understanding of the real lives people led. When I pointed out to her that neither she and I, nor the accused, had any way of knowing whether the three witnesses in the trial were plucky innocent bystanders or people connected in some way to a rival gang, she changed her mind, and sighed that the whole thing was a complicated and troubling nightmare. Unfortunately, she's right.

d.orr@independent.co.uk