Wild Boys: BSB should act…?

lebon

This tax scheme is completely within the law, or you can tie me to a windmill blade

It’s quite a rarity for a practising lawyer to suggest serious unethicality on the part of his or her colleagues, so when it happens it’s worth taking notice.  Often too the allegations need to be carefully circumscribed with the ifs and buts of unadjudicated facts and speculation.  Not so this blog by Jolyon Maugham, where he has spoken out with clarity and I suspect not a little courage.  He speaks, for instance, of, “a prominent QC at the Tax Bar” who “expresses a view on the law that is so far removed from legal reality that I do not believe he can genuinely hold the view he says he has. At best he is incompetent. But at worst, he is criminally fraudulent.” And this gentleman is part of a posse of, “slightly under half a dozen names…  the Boys Who Won’t Say No”.  The existence of this group is apparently well known within the tax fraternity.

Part of Jolyon’s beef is that these barristers are unlikely to be sued by their lay clients and, if they do get sued, they are shielded from their responsibility by the Bar Mutual Fund.  The ‘boys’ pick up, “large cheques for giving advice he cannot believe to be right – and his insurance premiums rise no more than mine…. They grow rich saying yes when no one is better placed than them to know they should say no.”  He suggests consideration be given to importing US rules requiring that, “Written tax advice must not be based on unreasonable factual or legal assumptions or unreasonably rely upon representations of the client or others, and it must consider all relevant facts and law. Where written advice does not meet those standards, the practitioner would face direct financial penalties.”  It’s the type of rule which might be properly applied to any situation in which a barrister or solicitor is giving an opinion.   Enron, Lehman, the News of the World’s hacking saga all involved opinions which might have benefited from more circumspection or risk sharing between adviser and client.  Opinions are not well policed by relying on the lawyer’s obligations to the clients or current ethical rules.  David Kershaw and I argued the point in detail using Lehman as a case study.  Opinions are supposed to be neutral documents but lawyers and sophisticated clients can easily turn them towards being advocacy documents with varying degrees of subtlety and risk.  Sometimes this has disastrous results.

The Bar’s Code of Conduct is not as well set up as the SRA’s Code for transactional work (not a great race to come second in), but there cannot be much doubt that a barrister giving opinion of the sort outlined above would be breaching their core duties to act with honesty and integrity, to maintain their independence and to not behave in a way likely to diminish trust and confidence the public places in the profession.   Duties to the court, in so far as Opinions are given in the shadow of the court, and duties to act in the interests of each client may also be in doubt.  It might pretty much constitute a full set of core duty violations.  It may of course be the case that the Bar Standards Board are already investigating such complaints.  Any barrister coming across serious misconduct is obliged to report it.  We can only speculate on whether that has occurred and the Bar Standards Board will decline to tell us on the basis that such complaints must be treated as confidential. It’s not the kind of approach that fosters public confidence.  They should tell us whether the allegations are being investigated and can do so without naming names.

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About Richard Moorhead

Director of the Centre for Ethics and Law and Professor of Law and Professional Ethics at the Faculty of Laws, University College London with an interest in teaching and research on the legal ethics, the professions, legal aid, access to justice and the courts.
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4 Responses to Wild Boys: BSB should act…?

  1. Vanessa Davies, Bar Standards Board says:

    The BSB Handbook, which came into force on 6 January 2014, contains a new requirement for barristers to report serious misconduct by themselves or others. Any barrister who genuinely believes that they have evidence of colleagues breaching the Code should report it to the Bar Standards Board so we can consider whether enforcement action is necessary.

  2. Simon Jeffreys says:

    More power to Maugham’s elbow, it’s this sort of thing that drags both the Bar and solicitors down. I think that sometimes a similar effect applies to high risk activities by high earning partners in firms structured as LLPs – they take the money they get for bringing in big deals, on the back of steady income earned by the other partners, and then depart for pastures new before the s~~~ hits the fan.

  3. Justin Bryant says:

    Yes, we all know who “the Boys” are (as does Margaret Hodge I’m sure), but I disagree with most of his comments, mainly because there are many arguably hopeless yet perfectly legal tax schemes that have succeeded in Court, so you cannot really generalise by saying all the positive legal advice re such arguably hopeless schemes is rubbish etc. For example, I remember one respectable tax barrister saying on taxationweb that the first instance decision in Mayes was bonkers as it was clearly an artificial scheme and caught by Ramsay and the judge didn’t know what she was talking about etc. and HMRC were bound to win on appeal, but he had to eat his words when the CoA agreed with her that the scheme worked. There are many similar examples. I don’t know any tax barristers that would approve of anything illegal. It is true that there have been more rubbish schemes that have lost, but you cannot blame the tax barristers for that, especially as their opinions are always heavily caveated re the risk of tax avoidance. Also, these comments are largely based on the benefit of hindsight. It could just as easily have been the case that some of these arguably hopeless schemes were successful in Court, given the right judge etc. Unfortunately you rarely see balanced comments when debating tax avoidance schemes!

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