Paragraph 2 of Schedule 7 LSA states that the “appointed day” for that purpose was the day on which section 13 LSA came into force.

Article 2(b)(i) of the Legal Services Act 2007 (Commencement No. 6, Transitory, Transitional and Savings Provisions) Order 2009 means that section 13 LSA came into force on 1 January 2010. At that point both the FTT and the Rules were operational and had been for some time.

The Courts and Legal Services Act 1990 (“CLSA”) was the predecessor to the LSA and insofar as relevant provided for an exemption in:-

Section 22(1) of the Tribunals, Courts and Enforcement Act 2007 (“TCEA”) requires the Tribunal Procedure Committee to make rules inter alia governing the “practice and procedure to be followed” in the FTT. The power to make those rules is to be exercised with a view to securing that “justice is done”, the “tribunal system is accessible and fair”, proceedings are “handled quickly and efficiently” and the rules are simple and simply expressed (section 22(4)(a) – (d)).

Section 22(3) states that Schedule 5 TCEA makes further provision about the content of the Rules and Schedule 5 expressly states that “The generality of section 22(1) is not to be taken to be prejudiced” by that Schedule or any of the provisions of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (as amended) ("the Rules"). At paragraph 9 under the heading “Representation” It reads:- “Rules may make provision conferring additional rights of audience before the First-tier Tribunal….”.

Rule 11 of the Rules reads:-

If a party appoints a representative, that party (or the representative if the representative is a legal representative) must send or deliver to the Tribunal and to each other party to the proceedings written notice of the representative’s name and address.

A person who receives due notice of the appointment of a representative—

Previously, and specifically immediately prior to 1 January 2010, sub-section (7) read:-

In the response to the Application in TC/2022/02199, HMRC pointed out that LSA did not apply in Scotland whereupon, having previously requested that the appeals be heard in Scotland, the appellant sought to have both appeals transferred to London. By Directions dated 20 October 2022, Judge Cannan directed that the Applications and the appeal be heard together in Edinburgh.

Mr Hackett concedes that it is not suggested that attendance at the hearing of the Applications, nor any other activity undertaken in Scotland, infringes the LSA or indeed that the LSA has any application in Scotland.

It does not and yet, as Mr Simpson pointed out, ironically both Counsel for the appellant were appearing in Scotland but were English qualified barristers.

Although Mr Hackett advanced various arguments about what amounted to “conduct of litigation”, Mr Simpson does not dispute, and he is entirely correct not to do so, that the officers’ role is to litigate; the clue is in their job description!

The issue is whether what they do falls within the meaning of “conduct of litigation” in paragraph 4, of Schedule 2 LSA.

The starting point is whether the litigator’s activities fall within the provisions of paragraph 4(1), that is whether they are defending proceedings and performing any ancillary functions in relation thereto before a “court in England and Wales”.

Mr Simpson’s argument is that what is important is the location of the court and not the location of the litigators. Mr Hackett disagrees entirely and says that what matters is where the individual is physically present when working.

I heard lengthy argument on where the “conduct of litigation” occurs.

Both Counsel canvassed the issues around this Tribunal being a UK Tribunal with jurisdiction in all parts of the UK with a central administration in England but courts in all parts of the UK. Furthermore the Tribunal conducts many hearings by video.

Obviously, the appellant argued that if the HMRC officer charged with conduct of an appeal was sitting in an office in England, then the LSA applied. Mr Hackett had some difficulty in dealing with the concept of an officer “hot desking”, as we know happens, in offices in Scotland or Northern Ireland where the LSA has no jurisdiction.

He also had some difficulty with the issue where cases which are initially processed in England are then listed to be heard in Scotland or Northern Ireland. That is a regular occurrence and these appeals are a good example. His only answer was that it depended where the person drafting the Statement of Case was based.

Given home working with Covid, and I raised that spectre, that is simply a lottery.

The Tribunal regularly sees Scottish litigants, as was the case with these cases, where the registered office is in Scotland and the appellant was seeking hearings in Scotland but the preliminary conduct of the litigation is handled by litigators based elsewhere in the UK. The conduct of the litigation in terms of physical presence could be anywhere until the final hearing.

Mr Simpson argued that once an appeal is listed for hearing then it should be the law of the location of the hearing that applies. Mr Hackett disagrees as that would leave the period before listing in limbo and it might be a case where the litigators were based in Scotland but the hearing was listed for England or Wales.

I have highlighted some of the perceived problems with the argument that it is the location of the litigator or the hearing at any point that dictates whether the LSA has any application. However, the real question is the exception to paragraph 4(1) found in paragraph 4(2) (“the exemption”).

The exemption is available only where, prior to the appointed day when section 13 of, and Schedule 2 to, the LSA came into effect, namely 1 January 2010, “no restriction” was placed on those litigating. (For the avoidance of doubt, Mr Hackett correctly departed from the previous argument for the appellant that the appointed day had been 7 March 2008.) As can be seen from paragraphs 37 to 39 above, the CLSA had provided there was no restriction where the court in question had granted a right of audience and right to litigate. The TCEA has provided the Rules.

Mr Hackett argues that the Rules do not use the words “conduct litigation” or “right of audience” and Rule 11 is merely a mechanism to permit representation. Furthermore, it contains a restriction in that Rule 11(2) requires notification to be made of the appointment of a representative.

He argues that the Rules do not expressly remove all, and any, restrictions but merely allow a representative to do “anything permitted or required to be done by a party under these Rules” and that does not amount to no restrictions.

He relies on the fact that Schedule 5 TCEA sets out provision for the Rules and at paragraph 9 under the heading “Representation” refers to rights of audience but not the conduct of litigation.

If Rule 11 did amount to no restrictions, as HMRC argue, then it is ultra vires since a statutory offence in relation to conduct of litigation cannot be “swept away” by procedural rules.

Mr Simpson argues that the Rules contained no restriction. Although I am not bound by their decision, Judge Beare and Ms Shillaker in Porter v HMRC [2018] UKFTT 264 (TC) (“Porter”) also found that there were no restrictions. I adopt but do not repeat their reasoning here.

I agree with Mr Simpson for the following reasons:-

I simply do not accept Mr Hackett’s sweeping assertion that the Rules are merely procedural and the statutory offence in the LSA, which is a substantive primary statutory provision, cannot be “swept away” by secondary legislation.

That is to ignore the terms of the enabling legislation.

For all these reasons I find that the exemption does apply because immediately before the appointed day there was no applicable restriction.

There is therefore no need to address the alleged issues surrounding where litigation is conducted for the purposes of the LSA, but if I had to decide the matter I do not accept the argument that it is where the representative is based. That would certainly be open to extensive abuse.

Lastly, if I am wrong on the LSA, Mr Hackett advanced an oral argument that if the officers had acted contrary to the LSA that would be an abuse of process because technically any such breach carried criminal sanctions. That would be contrary to public policy if such a breach were to be implicitly sanctioned by the Tribunal taking no action.

He relied on Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (“Hunter”) where he explained the rationale for striking-out as being:-

Mr Hackett did not persuade me that the fact that the litigators were not legally qualified had caused any unfairness to the appellant let alone manifest unfairness. Indeed it was freely admitted that no aspersions were cast on the conduct of the litigation by the litigators.

I cannot accept that there is any question of bringing the administration of justice into disrepute. As Mr Simpson pointed out, on any given working day, there are non-lawyers conducting litigation in the many and varied Tribunals which operate in England and Wales.

Hunter was decided a long time ago and does not reference Article 6 of the European Convention on Human Rights (“EHCR.”).

The only basis on which HMRC could be barred from proceeding in this matter would be in terms of Rule 8(3)(b) which is where it “has failed to cooperate with the Tribunal to such an extent that the Tribunal cannot deal with the proceedings fairly and justly”.

I pointed out to Mr Hackett that the decision to strike-out proceedings or, in this case, bar HMRC, must be a proportionate response to the conduct that had prompted it.

Striking-out is often described as a draconian remedy and modern thinking is that it should only be used as a last resort. I take those principles from the judgment delivered by Lord Clarke in Fairclough Homes Limited v Summers [2012] UKSC 26 and particularly at paragraph 61 where he states that “The test in every case must be what is just and proportionate.”

Finally, as far as public policy is concerned, that is set out in section 24 TCEA (see paragraph 38 above).

In my view it is inimical to those principles, which are at the heart of the Tribunal system, to suggest that litigation in the FTT must only be conducted by solicitors if any aspect of the litigation takes place in England and Wales. Here we are dealing with HMRC which is an arm of the State and has resources, albeit limited, but if the appellant is correct then Welfare Rights, CAB, and numerous other organisations would be unable to conduct litigation before Tribunals.

I consider the argument on abuse of process to be entirely without merit.

For all these reasons the Applications are refused in their entirety.

This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.