THE TIMES recently reported that Icebreaker Management Limited has instructed solicitors to take action "if necessary" against Deloitte who had acted for them on Her Majesty's Revenue & Customs' tax tribunal challenge to tax saving schemes.
The potential claim arises from Deloitte's head of tax policy, Bill Dodwell's, article on the case for Tax Adviser. At the end of the piece he congratulated the tax tribunal on their "abundance of insight and plain speaking which makes it quite clear there cannot possibly be a successful appeal. Hopefully all the members will settle up quickly".
It is reported that Icebreaker's founder Caroline Hamilton believes Dodwell's comments appeared to be in clear breach of Deloitte's duties as instructing solicitors including to act at all times in their best interests and not to allow Deloitte's interests to conflict with Icebreaker.
Claims for professional negligence are normally made for breach of a contract or for negligence. A person bringing a claim has to show a) an obligation or duty of care b) that was breached and c) loss.
While Dodwell's comments were perhaps unfortunate it is not clear that Deloitte, or he, is in breach of duty and even if they are, that Icebreaker can show any loss.
The tax tribunal's decision is well known and was extensively covered in the media with numerous commentators expressing their views on it. Dodwell is one such commentator and is a regular contributor of articles to journals. His comments are but a few of the many in print. The everyday nature of the words used indicates they are just comment as opposed to formal analysis.
Tribunals and courts that hear appeals are well used to commentary on cases prior to their dealing with them. It is unlikely that Icebreaker is suggesting there be a press embargo following a decision, as that could be said to amount to commercial censorship. Its complaint is that Dodwell's comments come from someone from their representatives and prejudices them.
A duty owed?
It is not clear what duties were and are owed by Dodwell. Hamilton says the duties were owed by Deloitte as "Icebreaker's instructing solicitors". Dodwell is not a solicitor and was, it seems, not part of the team acting for Icebreaker. This raises a query as to whether he is subject to the same rules. Indeed in a report Hamilton comments that the legal team at Deloitte have confirmed his article in no way reflects their views of the tribunal decision. This indicates a distinction between Icebreaker's "legal team" and Dodwell.
Also, solicitors' duties are not as absolute and do not go as far as is said. They can be subject to qualification. For example, they are subject to public policy (e.g. reporting on proceeds of crime) and professional conduct rules (e.g. ceasing to act where there is a conflict of interest). In addition the duties may be subject to any agreed terms of business. For example both solicitors and accountants commonly reserve the right to act for other clients whose interests may be commercially adverse to the client and some terms have provisions allowing for publicity.
In a case such as this, it may be difficult show how comments such as Dodwell's would prejudice and affect an appeal and cause loss. It will be interesting to see if and how this case develops, if this breaks new ground in claims against professionals and how this will affect large professional services firms going forward.
Jeremy Lederman is a partner and head of the commercial litigation team at Wedlake Bell
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