Tuesday, December 20th, 2022
As we approach the end of the year, we wanted to take this opportunity to give everyone an update on the progress of the business and the claims we are undertaking on our clients behalf.
Before we embark upon this, I wish to apologise in advance for the length of this newsletter but, we took the view that we wanted to cover all bases and leave no stone unturned. I would also like to add that the Board of C4J have decided it would be beneficial for all to give out quarterly updates, this we shall start in 2023 with the first one coming in April.
Since our last update on the 22nd March where we set out some of our objectives and goals for the business during 2022, we are happy to report that we have not only achieved those objectives and goals but, we have indeed surpassed them all.
The only disappointment from our perspective is we would have hoped by now, that a lot of the claims we have been working on would have progressed further and in some cases, had a successful outcome.
We would also like to inform you that we have now dropped our association with CP Law and are in the final stages of obtaining SRA accreditation in our own name, under the SRA’s ABS scheme. We expect to get this accreditation sometime during January/February 2023.
Now turning to the various claims, we will deal with each of these separately.
WORKERS RIGHTS CLAIMS
We had hoped to report some good news in relation to these claims as, on the 5th December, we had our first case being brought to trial. Unfortunately, on that day, the judge postponed the hearing to 29th and 30th March 2023. The reason being, the defendant had not furnished us nor the Court with certain disclosure documents as required under the pre-action protocol. This is most frustrating for us as we hoped to have a successful outcome to this case, which ourselves and Counsel fully expected.
Regarding Counsel, we have retained the services of Simon Cheetham KC and Michael Ford KC both are eminent counsel in the field of Employment Law. Simon, as well as being a Barrister, is an Employment Tribunal Judge and indeed a trainer of Employment Judges in the London area. Michael on the other hand, has won some notable cases this year such as Smith v Pimlico (Employment Appeal Tribunal) and Harpur Trust v Brazel (Employment Appeal Tribunal) to name just a few. Both cases are very pertinent to our claim and the Courts re-affirmed that our cases should succeed.
Lastly, we took the decision based upon Counsels advice to hold back litigating other cases pending the outcome of the case on the 5th December. As this was a high profile case and would have attracted a lot of media attention, it was Counsels view that had we been successful, which he expected, it could have assisted us greatly in potentially being able to reach out of court settlements with other defendants.
However, in view of the delay to this case, we have taken the decision to put in place After the Event Insurance (ATE). Once that is secured, which we anticipate will be early in the New Year, we can then start the litigation process on others.
Whilst on the subject of ATE Insurance, we would like to clarify that as a responsible law practice we will not pursue a claim in the High Court without having this in place beforehand, as this protects you from any adverse claims costs in the event we should lose a case.
UNLAWFUL DEDUCTION CLAIMS
It is our intention to commence litigation of these cases in the New Year once we have our ATE Insurance in place.
Whilst we have been ready to start proceedings against numerous defendants for some months now, the litigation of these was put on ice pending the outcome of the Workers Rights (holiday pay) claim case which was mentioned above. The reason for this is solely due to the defendants being common in both claims.
LOAN CHARGE CLAIMS
When we first embarked upon pursuing these claims, we initially had two options, the first option was to pursue HMRC for a Tax Credit and the second, to pursue the Agencies or End Clients under s44 ITEPA 2003.
Unfortunately, following the outcome of some major tax cases this year which challenged the Loan Charge, such as the likes of Hoey, Lancashire and Finucane for example, it was deemed that our chances of success in pursuing the Tax Credit had diminished somewhat. With regards to pursuing Agencies under s44, whilst this was still an option, the difficulty we were facing in pursuing such a claim was in proving what your physical loss was. Given the fact that every worker in the UK must pay tax of some kind on the emoluments they receive.
So, we started exploring other angles and identified in conjunction with both Leading Tax, Employment and Civil Law KC’s, another angle to mitigate the tax liabilities being imposed by HMRC under the Loan Charge.
In cases where a contractor has settled with HMRC, a physical loss can be proven. For those individuals, we are able to make a claim against the Agency for the loss they have suffered as a result of being a participator in a Tax Avoidance Scheme. You may say that the Agency had no knowledge of your participation in such Schemes and whilst that may well be true, it does not detract from the fact that under the Law of Principal & Agent, The Principal i.e. The Agency is liable for the actions of their Agent i.e. The Intermediary. If you suffer loss as a result of the Intermediary’s actions, then the Principal is responsible under Law for the loss you suffered.
Our pleadings will be very simple, the Intermediary more often than not was a Scheme Promoter. They would have told you that all Taxes and NIC’s that were due were being paid and now as a result of the Loan Charge, a further liability has arisen, which amounts to the sum of your loss.
Yes, it could be argued that we should pursue those promoters for the losses you have suffered but, there is a strong likelihood than many of them have vanished into thin air and those still remaining would become insolvent as a result of such an action. So, it would be a fruitless and futile exercise in pursuing those promoters and fortunately, for all of you, whether or not you think its morally right to pursue the Agency or not, under the Law of Principle and Agent, they are liable.
We also, would counter any argument regarding pursuing the Agency and say that they should be pursued for your losses because, under s44 ITEPA 2003 they had a duty to apply PAYE to all those contractors who provided personal service and accordingly, under those rules, those parties are liable.
For those of you who have not settled yet with HMRC, all we would say is that the heat has been turned up in recent months by HMRC and we are informed there is a mandate to bring the loan charge to a conclusion by the end of March 2023. It may follow you are forced to settle as a natural conclusion to this matter.
You may also ask whether you will still be in time to bring about a claim and to answer that question, under normal circumstances, the limitation period will start to run at the time that the cause of action arises i.e., from the earliest time that the legal proceedings could first have been brought. This means that every fact which is required to commence an action must be in existence before the limitation period will start to run. In some cases, this may be some time, even years, after the event in question because, an individual may not know they have a potential legal claim until certain issue such as settlement with HMRC comes to light.
We would like to add that regardless of whether you have settled your liabilities with HMRC or not, we are still able to pursue, in the vast majority of cases, a claim for you for unpaid holiday entitlement.
Lastly, we would also like to stress that whilst we are working as hard and as fast as we can, delays are sometimes unavoidable and can, on occasion, be caused by clients themselves in the speed of supplying evidence. Like any Legal Claim, evidence is required and a lack of sufficient evidence to formulate a claim would result in us being unable to process the claim any further, leaving us no option but to close the case for that individual client. With this being a Legal case it is important for each case file to be compiled to the same detail and complexity to avoid any question or doubt which I am sure you can all appreciate.
We would also like to take this opportunity in wishing you a very Happy Christmas and a Prosperous New Year.
Our office will be closing down over the Christmas period at 4pm on Friday 23rd December 2022 and will re-open for business at 9am on Tuesday the 3rd of January.
