Only a Martian could be unaware after Jackson that strict adherence to the CPR procedural rules is absolute, unless they give the Court discretion. All litigants take valid objections to procedural time limit non-compliance and defective service of process (and advance substantive limitation defences) even if the Claimant thus loses a formidable and just case. HMRC are fully entitled to do so. But in London Fluid [2023] EWHC 2206 (Admin) they acted shamelessly. Reading the judgment is a must to enjoy the blatant skullduggery.
Like everyone I’m sure, I advised my clients on the perils of litigation against HMRC. Cost, uncertainty of outcome, hassle, unwelcome publicity, threat of appeals to the SC if need be, and prospective bad loser’s retribution. All weaponized by them to induce early capitulation. I joked comme d’habitude that they have an insatiable appetite for litigation and a blank cheque to finance it and that the Litigation and Settlement Strategy was duplicitous, self-righteous, virtue-signalling propaganda. Mad Jack the conspiracy theorist? Here in this case is the vindication of the prophet.
In 1984 I represented a Rossminster “henchman” before the General Commissioners (today’s FTT). He was a former police officer, so a star witness. No need for me to lead him; he led himself admirably during cross-examination. It was brutal. HMRC‘s solicitor was graceful in defeat but the Goon instructing him was literally apoplectic and on the verge of a seizure, refusing to shake hands. Such over-investment in the outcome seems to be the correct inference here.
I get it that HMRC are furious about tax avoidance “schemes” generally and about disguised remuneration in particular. I advised those contemplating them about prospective litigation generally as above, including “punk” litigation tactics. I also advised them that a loan whose repayment was totally unlikely could well be taxable (Williams v IRC 54 TC 257 in 1980, even before Ramsay or Burmah Oil). If not in fact intended to ever be repaid, that it was close to if not actually fraudulent.
Litigants who cannot control their emotions are a menace. Consider the ex-spouses, angry neighbours, and Will disputants prepared to exhaust their financial resources by pursuing their vendettas in court. It is wholly unacceptable for HMG (or one of its main agencies) to do this too. I resent that we are forced to indulge them to so waste taxpayers’ money.
First, as state actors, they can make and change the law to their advantage, including draconian enforcement measures. Secondly, they possess overwhelming litigation funding. Thirdly, it behoves them to act differently from commercial litigants; with a soupcon of noblesse oblige or in accordance with “high-minded” principles (Dictionary:“principled, moral, worthy, noble, good, fair, pure, ethical, upright, elevated, honorable, righteous, idealistic, virtuous, magnanimous“). They are as discreditable as the extreme tax avoiders they so abhor.
Jack Harper