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Tax Tribunal allows third party access to skeleton arguments

Documents submitted to the tax chamber of the UK's First-tier tribunal (FTT) can be made available to parties not involved in the litigation on the basis of the common law principle of open justice, a judge has confirmed.12 Sep 2018

The ruling allows accounting firm KPMG access to skeleton arguments and the statement of case of HM Revenue & Customs (HMRC).

KPMG was not involved in the case, which concerned the VAT position of Hastings Insurance. KPMG applied to the tribunal for copies of the documents after the publication of the FTT decision in the Hastings case. It sought the documents in order better to understand HMRC’s arguments in the case which, it said were relevant to arguments in a different case in which KPMG were instructed.

Earlier this year, the same judge, Greg Sinfield, who is president of the tax chamber of the FTT, made a similar ruling in the Upper Tribunal, allowing a journalist access to documents lodged with the tribunal as part of the appeal process in a case involving a company called Aria Technology.

"The Hastings decision is important as it clarifies the position across the tax tribunals and should mean that tribunals take a more consistent line in future," said Steven Porter, a tax disputes expert at Pinsent Masons, the law firm behind

"In tax disputes you can have the issue that your opponent, HMRC, knows more than you do about the arguments raised in other cases which may involve similar points to the ones you are arguing. Access to statements of case and skeleton arguments could level the playing field slightly for taxpayers and to a limited degree, provide some deterrent from HMRC taking inconsistent positions across different cases," he said.

"Although for taxpayers involved in high profile cases, perhaps with a tax avoidance element, it means that more information could potentially be obtained by investigative journalists or perhaps tax campaign groups," Porter said.

"An important point to note is that this case involved an application to access documents after the tribunal had published its decision. It is unlikely that the FTT would grant access to documents before an FTT decision has been published unless the request is from a journalist, as although FTT hearings take place in public, very little is generally known about such cases until the FTT decision is published," he said.

In contrast, the Aria case related to an Upper Tribunal hearing and the journalist was granted access to the documents before the hearing had taken place. In that case information was already in the public domain because the FTT decision had been published.

Judge Sinfield said that although the FTT Rules do not expressly allow the tribunal to allow a non-party to inspect or have access to documents relating to proceedings, they do not prevent it and he considered that the FTT had an inherent jurisdiction in relation to documents in its records that are the equivalent of the documents in Rule 5.4C of the Civil Procedure Rules (CPR).

The CPR govern how civil cases are conducted in England and Wales in the High Court, the Court of Appeal and the Supreme Court. They do not apply to the tax tribunals which have their own rules of procedure.

"The right to obtain a copy of the statement of case or judgment is an expression of the principle of open justice which applies to the First-tier Tribunal as it does to the courts," Judge Sinfield said.

In a recent decision involving the Asbestos Victims Support Group, the Court of Appeal confirmed that access to trial documents by those that are not parties to a particular case is limited to 'records of the court', and does not include the likes of trial bundles nor, in general, other trial documents.

Referring to that decision, Judge Sinfield said that in his view the documents a third party could access in relation to tax tribunal proceedings would include the notice of appeal, the statement of case by HMRC and any reply, any list of documents, but not normally the documents themselves, and any judgment or order given or made in public. He said this was subject to the right of a party or a person identified in the document concerned to ask for a non-disclosure order under the FTT Rules.

The judge said that access would not extend to documents, such as HMRC correspondence, which was referred to in the statement of case or skeleton arguments but where there was no indication that the tribunal had read them. KPMG could also not access an earlier version of the statement of case which consolidated another appeal which was settled with HMRC before the hearing.

A third party can only gain access to the documents if they have "a legitimate interest in the documents". The judge said this was not confined to journalistic purposes and included "an entirely private or commercial interest, such as an interest in related litigation". He pointed out that the public interest of a pressure group involved in lobbying and promoting knowledge could also qualify as a legitimate interest as in the case of the Asbestos Victims Support Group.

"I consider that a legitimate interest does not require a direct personal or professional interest in the outcome of proceedings. In my view, an interest in other related litigation, whether actual or in contemplation, is sufficient," the judge said.

He dismissed arguments from Hastings that the skeleton arguments should not be disclosed because they did not reflect the oral submissions made by counsel in the hearing.  He also dismissed a submission that the amount of tax assessed should be redacted because it was not mentioned in the FTT's decision.

"It is, in my view, important for a proper understanding of the legal process, consistent with the principle of open justice, that members of the public should understand what submissions were made in the skeleton arguments even if they were modified or withdrawn during the hearing. The point is that they were submissions that were made, however briefly, at some stage of the hearing," the judge said.