Appeal ruling rocks direct access

The future of the bar’s direct access scheme has been thrown into uncertainty by a Court of Appeal ruling handed down on Friday (2 December).

The court found that HM Revenue & Customs (HMRC) does not have to pay costs incurred by André Agassi’s accountant Tenon Media during litigation between the tennis star and HMRC because Tenon was not providing “legal services”.

Tenon instructed Gray’s Inn Tax Chambers barrister Patrick Way directly, bypassing a solicitor in order to keep costs down. The court said Agassi may be able to recover some of Tenon’s fees if a costs judge allows them as a disbursement, similar to that incurred by an expert witness.

Agassi originally appealed a decision of the Special Commissioners over the amount of income tax payable on his sponsorship earnings. He lost in the High Court, but won a Court of Appeal hearing in November 2004.

HMRC argued, supported by a Law Society intervention, that the court did not have jurisdiction to order the payment of Tenon’s costs.

The Bar Council, which supported Agassi, said that the rules on costs need “urgent re-examination” to encourage cost-effective litigation.

The Law Society instructed Anthony Speaight QC of 4 Pump Court. Landmark Chambers’ Richard Drabble QC acted for the Bar Council. Devereux Chambers’ Bruce Carr appeared for HMRC.