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Win for open justice as tax tribunal allows non-party access to HMRC pleadings

KPMG: Successful application

The First-tier Tribunal (FTT) has “inherent jurisdiction” to give non-parties access to documents, its tax chamber has ruled in allowing KPMG to see documents from another case involving HM Revenue & Customs (HMRC).

Judge Greg Sinfield, president of the chamber, said that having ruled in April this year that the Upper Tribunal had jurisdiction, it was clear that the “same requirements of open justice” applied to the FTT.

Judge Sinfield said that although the FTT rules did not “expressly allow” non-parties to inspect documents, rule 14, prohibiting disclosure of specified documents, did not suggest otherwise.

He said rule 32(1), which provided that tribunal hearings must be held in public, showed the “principle of open justice is engaged in the First-tier Tribunal as it is in other courts”.

The judge said the extent of the jurisdiction to allow non-parties access to documents was considered earlier this year by the Court of Appeal in Cape Intermediate Holdings v Dring [1].

In his ruling, Lord Justice Hamblen gave a list of documents to which non-parties should have access, such as witness statements, expert reports and skeleton arguments or written submissions by advocates.

The FTT heard in Hastings Insurance Services v Revenue & Customs (Procedure) [2018] UKFTT 478 (TC) [2] that KPMG applied for copies of HMRC’s statements of case and skeleton arguments in a tax appeal.

“KPMG was not a party to the appeal nor did it represent any party,” Judge Sinfield said. “KPMG seeks the documents requested in order better to understand HMRC’s arguments in the appeal which, KPMG state, are relevant to their arguments in a different case in which they are instructed.”

Judge Sinfeld rejected an objection from HMRC on the basis of taxpayer confidentiality under section 18 of the Revenue and Customs Act 2005. The judge said this placed no restrictions on disclosure by the FTT, as opposed to HMRC.

He said non-parties should have access where they had a “legitimate interest” in the documents, which was a “broad” one and “certainly not confined to journalistic purposes”.

Judge Sinfield said it was clear from the Court of Appeal’s ruling in Cape that an “entirely private and commercial interest, such as an interest in related litigation” could qualify as a legitimate interest.

He said it seemed to him that Hastings Insurance was “really arguing that its own skeleton argument should not be disclosed because its counsel ignored it in opening and HMRC’s skeleton is irrelevant because the arguments in it were largely abandoned by their own counsel”.

He went on: “Those submissions miss the point. The skeletons were deployed by the parties at an effective public hearing and read by the tribunal.

“There is no suggestion in Hamblen LJ’s judgment in Cape or in any of the authorities that he refers to that the court’s inherent jurisdiction to allow members of the public to have access to skeleton arguments that have been deployed at a hearing and read by the court is restricted to those parts which replicate oral submissions made in open court and which survive the hearing intact.

“Counsel’s submissions often expand on or even differ from the submissions in the skeleton, which is to be welcomed as nothing would be served by counsel simply reciting the contents of a skeleton.”

Given that skeleton arguments often also contained points or arguments not developed in oral submissions because they were conceded by the other party or accepted by the tribunal without needing to be developed, not providing access to them would mean that “the member of the public would not have a full and complete understanding of the arguments deployed by that party”.

Judge Sinfield accepted the argument put by Hastings Insurance that a “deconsolidated” version of HMRC’s statement of case should be used, to avoid giving access to documents relating to a different, settled, tax appeal.

The judge also agreed that documents annexed to HMRC’s statement of case should not be disclosed. However, he refused a request by Hastings that the amount of tax assessed should be redacted, along with references to parts of HMRC’s expert witness reports.

Judge Sinfield directed that KPMG be allowed to inspect the deconsolidated version of HMRC’s statement of case, without annexures, and both parties’ skeleton arguments in the appeal without any redactions.

The Ministry of Justice is currently considering the responses to a consultation that closed last month [3] on strengthening the rules supporting open justice.