We are often asked to act as an expert witness in litigation where tax is an important factor. In acting as an expert one must be familiar with the litigation process and be able to provide a clear exposition of the relevant taxation provisions, an explanation of how those issues affect the litigation and an objective view of the strengths and weaknesses of a client’s case. By doing so, we assist the advising solicitor in seeking a settlement which is acceptable to both parties.
Professional Negligence Litigation
Professional negligence litigation in respect of claims relating to tax advice is increasingly common. In such litigation it is essential to be able to identify and explain clearly the relevance of the tax issues to the key concepts of duty, damage, quantum and mitigation. Tax legislation often involves treating hypotheses as if they were real. Negligence litigation requires the consideration of hypotheses as to what would have occurred had the alleged negligent action not taken place. Where the two forms of hypotheses are combined there is the potential for a highly confusing interaction of competing hypotheses. The role of the tax expert in such litigation is to carefully unpick and explain those competing hypotheses.
the complex clearly explained
‘Simon McKie’s expert advice in respect of a professional negligence claim concerning taxation advice was invaluable. He clearly explained the extremely complex provisions which were relevant to the claim and identified the key tax issues in respect of duty, damage, quantum and mitigation. The quality of his advice and the clarity of his oral and written explanations were instrumental in assisting our client in their defence and resolution of this matter.’
~ Gavin Henderson, Partner, Clyde & Co, Solicitors ~
The expert can be particularly valuable in mediation. Mediation requires the ability to quickly evaluate complex arguments in respect of the effects of taxation provisions and to be mindful of any weaknesses in either side’s case so as to inform the client’s negotiating position. We aim to keep a clear head under pressure so that mediation provides the best possible result for the client. In respect of two separate cases concerning negligent advice given in respect of the Enterprise Investment Scheme, for example, we clarified the complex issues involved allowing the cases to be settled without recourse to the courts and with a better than expected outcome for our instructing solicitors’ client.
Comprehensive, Clear and Relevant Reports
We pride ourselves on the comprehensiveness, clarity and relevance of our reports. Gowling WLG, Solicitors commented:
‘Your expert witness report was thorough, clear, practical and to the point. In an area of great technical complexity it identified the key issues with objectivity and precision.’
In determining financial provision on the breakdown of a relationship tax can play a crucial part. Potential future tax liabilities on the disposal of assets to fund a settlement need to be determined. This often involves a comprehensive review of the assets of the parties, how they were acquired and how they are held so as to identify the potential assets available for realisation. Such matters are particularly important where there are trusts, assets situated in foreign jurisdictions or one or both of the parties are non-UK domiciled.
CaN we help you?
If you have a matter on which you require tax advice please contact us by completing the form opposite.