Blackstone Chambers’ James Eadie QC has defeated a judicial review bid by lobbying group UK Uncut over HM Revenue & Customs’ multi-million pound “sweetheart” deal with Goldman Sachs.
Mr Justice Nicol refused to brand the settlement between the revenue and bank as illegal but conceded that it was “not a glorious episode in the history of the Revenue”. He said the senior official who negotiated the deal, Dave Hartnett, “had not been briefed by the lawyers who were litigating against Goldman Sachs”.
The court found that Hartnett, then permanent secretary to HMRC, “took into account the potential embarrassment to the Chancellor of the Exchequer if Goldman Sachs were to withdraw from the Tax Code” – a code of anti-tax avoidance practice which banks, including Goldman, had just signed up to.
Nicol J’s ruling stated that Hartnett had admitted as much and that HMRC agreed that it should not have been a factor when agreeing the deal.
Devereux Chambers’ Ingrid Simler QC was instructed to challenge the legality of the deal by Leigh Day & Co partner Richard Stein for tax avoidance campaign group UK Uncut. Eadie, the Treasury devil, was instructed directly by HMRC.
Simler argued that HMRC breached its public law duties when it failed to comply with its own collection and management duties after agreeing the settlement. The relationship between the two, UK Uncut claimed, was too close.
The deal in question was signed behind closed doors in 2010 following a meeting about national insurance contributions. At the end of the meeting the parties had “shaken hands” on an agreement that meant the bank would pay the outstanding sum, but no interest.
A statement from HMRC read: “The High Court’s judgment confirms what HMRC has always said: that while we made errors in settling the Goldman Sachs dispute, we made the right settlement in the circumstances, and that our decision was both proper and lawful.
“This issue has been rigorously and repeatedly scrutinised – by the Public Accounts Committee, by a retired High Court judge on behalf of the National Audit Office and now by the High Court itself.
“The public can have confidence in our governance processes, which we have strengthened, providing greater levels of scrutiny, transparency and role separation.”
Mr Justice Simon had given permission for the judicial review last June finding that the case was in the public interest (13 June 2012).
For the applicant UK Uncut:
Devereux Chambers’ Ingrid Simler QC leading Blackstone Chambers’ Ben Jaffey, instructed by Leigh Day & Co partner Richard Stein
For the respondent HMRC:
Blackstone Chambers’ James Eadie QC and Gemma White, instructed by the Treasury Solicitor
The case was listed as one to watch in January. For more see: The Lawyer Top 20 Cases 2013