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Court grants disclosure request in £650m tax dispute

The High Court has ordered the handing over of documents in a £650m tax dispute in a case that further widens the scope of the disclosure pilot scheme.

James Pickering QC, sitting as a deputy high court judge in Revenue And Customs v IGE USA Investments, said the court had the power to order specific disclosure even where there was no agreed or approved list of issues for disclosure.

His decision overturned a ruling of Deputy Master Nurse and further clarifies the boundaries of the disclosure pilot, which is in force in the business and property courts until the end of this year.

Pickering J agreed that issues for disclosure were not confined to issues that could be identified within the statements of case, and he ruled that the court did have jurisdiction to make an order under paragraph 18 of the pilot scheme rules.

The underlying case is a dispute between HMRC and a number of companies within the international GE group. HMRC has sought to rescind a previous settlement agreement based firstly on innocent misrepresentation and latterly on an allegation of fraud. GE denies fraud and resists the HMRC application to amend particulars of claim, and has asked for copies of documents from when the case was referred to HMRC’s fraud investigation service.

GE argued on appeal that the deputy master had wrongly treated issues for disclosure as being limited by the rules. HMRC submitted that the issues for disclosure should be identified within the statements of case as a whole.

Pickering J described litigation as a ‘war within which there can be a number of battles’, and said that along the way there will ‘often be various skirmishes which give rise to issues which fall outside the parameters of the statements of case’.

He added: ‘It is not necessary for the issue to be identifiable on the face of the statements of case – instead, it is enough for that issue to be something which will need to be determined by the court in order for there to be a fair resolution of the proceedings as a whole.’

The judge ordered disclosure based on the importance and value of the case and the fact that HMRC had already searched for and collated the documents sought, so the request was reasonable and proportionate.

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