Looks like a resounding win for AndrewThornhill QC

https://www.bailii.org/ew/cases/EWHC/Ch/2022/457.html

Didn't find your answer?

Per paras 91 & 157 (and the claims were time barred in any event per para 382):

https://www.bailii.org/ew/cases/EWHC/Ch/2022/457.html

Para 97 is interesting re disclaimers, as is para 338 re risk warnings (it seems to be a non-sequitur).

See also: https://www.lawgazette.co.uk/news/tax-silk-fights-off-negligence-claim-o...

Replies (26)

Please login or register to join the discussion.

avatar
By Justin Bryant
08th Mar 2022 13:36

The stupid edit block blocks multiple edits. Anyway, I meant to add that para 338 looks like a non-sequitur, so even that one (academic) point that went against him per para 411(2)(b) was arguably wrong.

I assume this has been litigation funded against ART QC's insurers, so those funders will now be licking their wounds as the costs are bound to be >£1m.

Thanks (0)
paddle steamer
By DJKL
08th Mar 2022 15:41

And ironically possibly a resounding loss for those who market tax schemes, anyone shouting from the sidelines "woe, do not touch", can now point to this decision and undercut the perceived safety net of any tax opinion previously sought by the marketers, pointing out, "you cannot rely upon Counsel's opinion, they owe you no duty of care"

Thanks (1)
Replying to DJKL:
avatar
By Justin Bryant
08th Mar 2022 16:26

All else being equal, it's always been the case that the best thing in terms of a safety net from the client's point of view is a counsel opinion addressed to the specific client (and if the client wants to avoid that cost by relying instead on a generic counsel opinion then that's their problem) and the case more or less spells that out.

Is anyone else confused by the apparent contradiction in para 338 i.e. the more confident you are of the tax law applied to the facts the more emphatic should be your client tax risk warning that you could be wrong? Surely it's the other way around, as no-one makes a tax risk warning (let alone an empathic one) when recommending a client to invest in an ISA etc. to save tax.

As an aside, the judge’s dismissal of HMRC’s manuals at para 218 et seq was spot on. I’ve read tribunal cases (with negligent judges sitting!) that treat HMRC
manuals as akin to law. As the judge correctly said the law is to be found in statutes and cases.

Thanks (0)
Replying to Justin Bryant:
paddle steamer
By DJKL
08th Mar 2022 16:12

The catch is in reality individuals rarely took personal counsel's opinion re the glossy magazine tax schemes unless they were really going to town rethe sums invested, most further down the food chain just read the blurb and forgot the "no free lunch maxim"

Thanks (0)
Replying to Justin Bryant:
paddle steamer
By DJKL
08th Mar 2022 16:26

"Nevertheless, the greater degree of firmness in the way the opinion was expressed, the greater the need for it to be caveated by reference to a clear risk warning."

Justin

I sort of get that, where one gives a very firm steer one should probably remind the listener that said steer, when all is said and done, is only an opinion not the word of an all seeing deity. (However as I am often a "on the one hand on the other hand" sort of person so maybe that is just me)

Thanks (0)
Replying to DJKL:
avatar
By Justin Bryant
08th Mar 2022 16:40

I still don't get it. For example, there are cases where a tax barrister specifically says a tax scheme is "aggressive" and that word of itself should be good enough as a risk warning that it could go pear-shaped for the taxpayer. In other words, surely the less risky he thinks it is, the less risk warning is needed so that if he describes tax planning as non-aggressive, plain vanilla and OK no risk warning is needed at all?

I sort of see what the judge means*, but he explains it poorly.

* I think he means that if a tax barrister is very confident about being right that tax mitigation works on an obviously complex bit of law/facts, then he needs to say there's a risk he could be wrong.

Thanks (0)
Replying to Justin Bryant:
paddle steamer
By DJKL
08th Mar 2022 16:41

I still think warnings need done.

E.g. I could make a pretty powerful case that if you invested £500 per month into a low cost ISA, and every time you had £1,000 you bought £1,000 of an different investment trust yielding 3% or above, and once you had 15 different holdings you continued topping up the purchases, you never sold, and you did this over and over for 50 years, you would be really hard pressed to have lost money, you might not have made as much as another approach, but losing would need some really frightful world events-notwithstanding investment wise this is likely pretty safe (pound cost levelling timing errors) anyone marketing it still ought to give a warning.

Thanks (0)
Replying to Justin Bryant:
avatar
By Justin Bryant
29th Apr 2022 13:04

Yes; I'm right. See para 121 here: https://www.bailii.org/ew/cases/EWHC/Comm/2022/935.html

Thanks (0)
Replying to DJKL:
By ireallyshouldknowthisbut
08th Mar 2022 16:51

DJKL wrote:

"you cannot rely upon Counsel's opinion, they owe you no duty of care"

In my experience any off the shelf planning scheme with Counsels opinion, or at least claims to have it (often its about something else similar) is bent as 9 bob note and will fall over with the first puff of wind from HMRC. But I don't play with the big boys like Justin. Who I should point out agreed with me yesterday on a different thread. We must both be going soft.

Thanks (0)
avatar
By More unearned luck
08th Mar 2022 21:40

Jolyon Maugham (not then QC, Justin) discussed the matter of redress from counsel in the 2014 Hardman lecture.

https://waitingfortax.com/2014/11/12/tax-avoidance-game-over-the-hardman...

Thanks (0)
Replying to More unearned luck:
avatar
By Justin Bryant
09th Mar 2022 10:14

That speech could have been written by Richard Murphy. It's rather OTT and exaggerating the (mostly imagined) problem (possibly with any eye on a future career in politics).

I'd rather listen to someone complaining about Government and Civil Service incompetence causing much bigger (non-imagined, but real and quantified in the £10bns) taxpayer losses.

Thanks (0)
Replying to Justin Bryant:
avatar
By Justin Bryant
09th Mar 2022 19:37

Right on cue here's what I mean by Government & Civil Service incompetence causing (or at least risking) £10bns of taxpayer losses.

https://www.accountingweb.co.uk/business/finance-strategy/agnew-blames-d...

Thanks (0)
avatar
By Justin Bryant
09th Mar 2022 11:19

A good case summary is here and notably the judge did not address the damages/loss issue (which would have been very interesting):

https://www.brickcourt.co.uk/news/detail/court-rejects-investors-claims-...

Thanks (0)
Replying to Justin Bryant:
avatar
By Justin Bryant
09th Mar 2022 13:22

I note from the (rather hubristically written) claimant lawyer's website it was a £40m claim:
https://www.stewartslaw.com/news/stewarts-has-three-cases-listed-in-the-...

Thanks (0)
avatar
By Justin Bryant
28th Apr 2022 15:26

I don't think this TJ article is pointing out anything surprising re intermediary adviser negligence.

https://www.taxjournal.com/articles/who-to-blame-when-tax-schemes-go-wrong-

As the judge said, this was a nonsense point. See:

https://www.accountingweb.co.uk/tax/personal-tax/careless-accountant-did...

Thanks (0)
avatar
By Justin Bryant
12th May 2022 13:47

The litigation funders are trying to appeal this. I don't fancy their chances as there is nothing obviously wrong with the judgment.

https://www.lawgazette.co.uk/news/film-scheme-negligence-case-could-yet-...

Thanks (0)
Replying to Justin Bryant:
avatar
By Justin Bryant
02nd May 2023 11:11

I see JB is proved right yet again in his appeals predictions. https://caselaw.nationalarchives.gov.uk/ewca/civ/2023/466
https://www.accountingweb.co.uk/tax/business-tax/tax-qc-beats-claim-for-...

A rather pointless appeal (the simple reason the appellants lost is summed up in para 177 and even if ART KC had owed a duty of care his lack of risk warnings would not have been enough to get the appellants home per paras 167 & 170), but at least it helps pay down Government debt re VAT and IT etc. on huge lawyers' fees.

Para 116 is helpful re disclaimers, 167 re risk warnings and 175 re potential 3P liability.

Thanks (0)
Replying to Justin Bryant:
By Ruddles
02nd May 2023 13:12

Well done you.

Although I'd have been mightily surprised if anyone here would have predicted a different outcome.

Thanks (2)
Replying to Ruddles:
avatar
By Justin Bryant
02nd May 2023 13:27

I'm not sure about that. I thought this other case was ridiculous and would be overturned on appeal and was the only one in this thread saying that (and I was right).
https://www.accountingweb.co.uk/tax/hmrc-policy/mehjoo-v-harben-barker-l...

Thanks (0)
Replying to Justin Bryant:
By Ruddles
02nd May 2023 13:50

That you have to drag up a 9 year-old thread to try and prove a point speaks volumes. In any event, I don't see too many people disagreeing that it was a ridiculous decision and more to the point I don't see you actually predicting that the decision would be overturned on appeal (although I may have missed it - but I have too little time and desire to read every last line of the thread). I certainly don't see anyone predicting that it would not be overturned.

Bottom line is, I don't know what you are trying to achieve. The fact that no-one else chooses to express the same opinion as you doesn't make you the only one that is right.

Thanks (1)
Replying to Ruddles:
avatar
By Justin Bryant
02nd May 2023 15:19

Don't worry. You have proved something very adequately about yourself with that comment (not that it needed proving of course).

Thanks (0)
Replying to Justin Bryant:
By Ruddles
02nd May 2023 15:46

That's fine. I think that we all reveal a little something about our character when we post online. You are certainly no exception.

Thanks (3)
avatar
By Justin Bryant
17th Jan 2024 15:22

I must have missed this other related case (better late than never):
https://www.brickcourt.co.uk/news/detail/they-think-its-all-over-it-is-n...

Thanks (0)