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  • Katherine Bullock

Does access to skeleton arguments risk exposing other skeletons too?

The First-tier Tax Tribunal (FTT) has confirmed in the case of Hastings Insurance Services Ltd, HMRC and KPMG LLP that litigation documents submitted to it can be made available to third parties not involved in the litigation but who have a 'legitimate interest' in it.

The ruling allowed KPMG access to HMRC's and the appellant's skeleton arguments and statement of case in a dispute about the VAT position of Hastings Insurance. KPMG was not involved in that case but felt that the arguments made there might have a bearing on a different case in which KPMG were instructed. KPMG applied to the tribunal for copies of the documents after the publication of the FTT decision in the Hastings case. HMRC argued against disclosure on the basis of the taxpayer confidentiality provisions in s.18 of the Revenue and Customs Act 2005. But this was rejected on the basis that that section bound only HMRC and not the tribunal.

"I consider that a legitimate interest does not require a direct personal or professional interest in the outcome of proceedings"

It was decided that KPMG had a legitimate interest, so the common-law principle of open justice argued in favour of disclosure to KPMG, even though there is no explicit statute granting the tribunal power to disclose court documents. A legitimate interest in the documents was not confined to journalistic purposes and included "an entirely private or commercial interest, such as an interest in related litigation". The public interest of a pressure group involved in lobbying and promoting knowledge could also qualify as a legitimate interest: "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."

This follows a similar ruling at the Upper Tax Tribunal earlier this year, in a case in which a journalist requested papers lodged by Aria Technology. The same requirements of open justice applied in that case applied to the FTT. They already apply to the England and Wales High Court and Court of Appeal, and the UK Supreme Court, although recently restricted only to formal documents filed at court, documents generated during the proceedings, and correspondence with the court.

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. 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. 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. It did not matter that the skeleton arguments did not reflect the oral submissions made by counsel in the hearing and the amount of tax assessed was not redacted even though it was not mentioned in the FTT's decision.

It is important to appreciate that this case involved an application to access documents after the tribunal had published its decision. So, it's unlikely that the FTT would grant access to documents before an FTT decision has been published unless the request is from a journalist, because, although FTT hearings take place in public, very little is generally known about such cases until the FTT decision is published. Whilst, in the Aria case the journalist was granted access to the documents before the hearing had taken place, the information they contained was already in the public domain because the FTT decision had been published.

On the plus side, the decision should provide some deterrent from HMRC taking inconsistent positions across different cases (if that were ever to occur) and thus that tribunals take a more consistent line in future. Access to these documents could also level the playing field for taxpayer and will certainly help those preparing for litigation.

However, 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 or other campaign groups, adding another consideration to have front of mind before deciding to take a matter before the Tribunal.


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