Instruction of counsel by tax firm on behalf of appellant — Whether appellant still litigant in person — Whether breach of statutory provisions as to conduct of litigation — Whether costs recoverable for work of tax firm
The appellant was a professional tennis player, resident in the United States. A question arose as to whether he could be assessed for income tax under the Income and Corporation Taxes Act 1988 in respect of payments in connection with his sporting activities in the United Kingdom. The Special Commissioners found that he could, and that decision was upheld on appeal, although the appellant’s further appeal was allowed.
The appellant was represented by counsel for the court proceedings. Counsel had been instructed by a member of the Chartered Institute of Taxation, who was employed by a firm of tax experts that had acted for the appellant for many years. Under the Bar’s Licensed Access scheme, members of the Institute are permitted to instruct counsel on an appeal in a tax matter.
On the costs assessment, the Revenue questioned whether the appellant was entitled to the costs he had incurred in retaining the tax firm’s services. Issues of principle arose as to whether; (i) the appellant was a litigant in person for the purposes of CPR 48.6; (ii) the tax firm’s fees were irrecoverable as being supplied in breach of various statutory provisions; and whether; (iii) the fees were recoverable in principle either as costs under section 51 of the Supreme Court Act 1981 and CPR 44.3(1) or as a disbursement under CPR 48.6.
The statutory provisions alleged to be breached were; (a) sections 20 or 22 of the Solicitors Act 1974, prohibiting unqualified persons from, respectively, acting as a solicitor or preparing any instrument relating to legal proceedings; and (b) section 70(1) of the Courts and Legal Services Act 1990, which makes it an offence for any person to act in purported exercise of a right to conduct litigation when not entitled to exercise that right.
Held:
1. The appellant was a litigant in person for the purposes of the Courts and Legal Services Act 1990. That was the only available basis for the proceedings, since section 28 of the 1990 Act, which governs the right to conduct litigation, did not recognise the tax firm as a person with the right to conduct litigation. For the purposes of the 1990 Act, there was no reason why a party could not be a litigant in person even if rights of audience on his behalf were exercised by an authorised advocate under section 27: Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 distinguished.
2. A person who was not an authorised litigator for the purposes of the 1990 Act could not conduct litigation within the meaning of that Act, and would be unable to recover the costs so incurred. Such a person would be acting as a solicitor in breach of section 20 if he or she issued proceedings, performed any functions ancillary to proceedings, or drew or prepared an instrument relating to legal proceedings contrary to section 22 of the 1974 Act. “Acting as a solicitor” involved undertaking acts that only a solicitor was entitled to perform whether or not that person was representing himself or herself as a solicitor: Piper Double Glazing Ltd v DC Contracts (1992) Ltd [1994] 1 WLR 777 and R (on the application of Factortame) v Secretary of State for Transport, Local Government and the Regions (No 2) [2002] EWCA Civ 932; [2003] QB 381 applied. The giving of legal advice did not amount to acting as a solicitor, nor did it amount to “conducting litigation” for the purposes of section 70 of the 1990 Act. The words “conducting litigation” were to be construed narrowly, given their obscurity and their potential penal implications.
3. The appellant’s right to recover costs from the opposing party was governed by the CPR 48.6 provisions applicable to litigants in person. CPR 48.6 contemplated allowing as costs only those categories of disbursements that a legal representative might have made, and did not cover expenditure for work that the legal representative would normally have done itself: Uhbi (t/a United Building & Plumbing Contractors) v Kajla [2002] EWCA Civ 628 applied. Accordingly, the appellant was not entitled to recover the cost of having the tax firm provide general assistance to counsel in the conduct of the appeals. He might, however, be able to argue that costs were recoverable in respect of ancillary assistance provided by the firm, such as the cost of discussing the issues with counsel and assisting with the preparation of the skeleton arguments. The provision of such assistance in a specialist, esoteric area was not the kind of work that would normally be done by a solicitor instructed to conduct the appeals, and, accordingly, such specialist services might be characterised as those of an expert and recoverable as a disbursement on that basis.
Patrick Way and Nicola Shaw (instructed by Christopher Mills, of Tenon Media) appeared for the appellant; Bruce Carr (instructed by the solicitor to the Revenue) appeared for the respondent; Anthony Speaight QC and Ron Chatterjee appeared for the Bar Council as intervenor; Richard Drabble QC and David Holland appeared for the Law Society as intervenor.
Sally Dobson, barrister
