Jolyon Maugham

Third

One exhibit

02.01.19

IN THE HIGH COURT OF JUSTICE CLAIM NO. HC-2017-001496

BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES

BUSINESS LIST (ChD)

BETWEEN:

JOLYON TOBY DENNIS MAUGHAM QC

Claimant

-and-

UBER LONDON LIMITED

Defendant

______________________________________________

WITNESS STATEMENT

OF JOLYON TOBY DENIS MAUGHAM

_________________________________________________

1. I make this witness statement further to my earlier statements of 15 June 2017 and

3 November 2017 and a statement made by David Greene of Edwin Coe LLP dated 9

October 2017. I make it to summarise the evidence already given to the Court in

relation to matters relevant to the application but also to supplement that evidence.

2. I make this statement from my own knowledge, information and belief. Where the

contents of this statement are not within my own knowledge they are true to the

best of my information and belief and I refer to the source of the facts stated. There

is now produced and shown to me a paginated bundle of documents marked “JM 3”

to which I will refer in this statement. The references to page numbers are

references to the page numbers in the exhibit.

My First Witness Statement

3. In my witness statement of 15 June 2017 , I addressed the following matters:

(1) I introduce the Good Law Project Limited (“GLP”) – its objectives and legal status.

It is not, of course, the claimant in this action but the crowdfunded sums were

raised by it;

(2) my longstanding and demonstrable interest in better tax policy and better

governance in the tax sphere; my work advising Ed Miliband’s Labour Party on

tax policy and, during that period, my constructive relationship with the then

Financial Secretary to the Treasury responsible for tax policy (now Lord

Chancellor) David Gauke and my direct impact on legislation introduced whilst he

held that Ministerial post;

(3) my objectives in seeking to assert my statutory right to a VAT invoice – which are

to improve governance in the tax system with the ultimate intention that HMRC

and Parliament address questions around public trust in the administration of

our tax system;

(4) how the case was crowdfunded. I estimate that “well above 50%” of the

donations – both by number and by value – originate with the Black Cab trade.

However, I also say that I was clear and consistent in public and private

statements that my purpose in bringing the action was not what I imagine to be

their primary purposes in funding it, which will not be general concern for tax

governance. And I observed that I had and have (and indeed today I still have) no

connection with the black cab trade. I should add that the 3,394 donors have no

influence, direct or ‘soft’, on my conduct of the litigation;

(5) the rates that I am paying to my own legal team – they will work at Government

rates;

(6) my own personal financial resources. I can now add that (as is set out following) I

(or GLP) have now been Claimant or Petitioner in a number of pieces of litigation;

that in each of the three cases where either the Government, the High Court or

the Inner House of the Court of Session have agreed or granted (respectively) an

order protecting me (or GLP) against adverse costs they have accepted the

proposition (as can be seen from the amount of the “cap”) that I (or GLP) cannot

sensibly be asked to take existential financial risk on litigation brought in the

public interest;

(7) why I brought these proceedings rather than judicial review proceedings. I

mention that permission has been given to bring judicial review proceedings in

the past. However, I say Parliament has given me a statutory remedy for non-

delivery of a VAT invoice and judicial review proceedings are narrowly focused on

whether a public law irrationality test has been met and the public interest in tax

justice being seen to be done is not met by an answer to the question whether I

can show that HMRC’s actions are irrational; and

(8) the fact that without a cap I would not be able to proceed with the litigation.

4. In my witness statement of 3 November 2017 I:

(1) state that, if my personal resources are decisive of the question whether to grant

a protective costs order, there is another potential claimant;

(2) respond to a witness statement given by the Defendant;

(3) discuss the public interest in the case. I should add that issues raised by the case

were discussed in the Public Accounts Committee, a member of which put

questions about the case to senior HMRC civil servants;

(4) address the contention advanced by the Defendant that I have an alternative

remedy in the form of pursuing a VAT reclaim against HMRC. However, it is now

clear (see paragraph 5 below) that this is not so;

(5) respectfully invite the Court to make a protective costs order in my favour

capping my liability to £20,000. It will be seen from paragraph 6 below that this

figure is the median sum of the three protective costs awards that have since

been made in my favour in other litigation.

5. In the witness statement of David Greene he sets out how it is that all parties – me,

the Defendant and HMRC – came to agree that I do not have an alternative remedy

in the form of pursuing a VAT reclaim against HMRC. This emerged after I spent a

number of months pursuing what the Defendant insisted its Skeleton Argument of 8

November 2017 was my alternative remedy, namely a statutory appeal against

HMRC’s refusal to confirm my entitlement to deduct input tax in respect of the

amount shown on the VAT invoice.

Protective Costs Orders

6. Since making those statements, GLP has come to benefit from three protective costs

orders:

(1) a protective costs order was made by Mr Justice Ouseley in a judicial review

claim brought by GLP against the Electoral Commission. The order is asymmetric

– in the sense that it caps the Claimant’s liability to £20,000 and the Defendant’s

liability to £40,000 – recognising the differing resources of the parties. A copy of

the Order can be provided to the court;

(2) a protective expenses order was made by Lord Drummond Young in an appeal in

the Inner House of the Court of Session in a case seeking to establish whether

the Article 50 notice is capable of being withdrawn. I was one of the petitioners

in that case – the others are all MPs, MEPs or MSPs. I gave a personal indemnity

in the case against all costs liability – both our own legal costs and any adverse

legal costs – to the other petitioners in order to secure that they were able to be

parties to the litigation. Again the order was asymmetric recognising the different

resources available to the parties. It initially capped the Petitioners’ liability at

£5,000 and the Defendant’s liability at £30,000;

(3) the third was agreed by the Government – without prejudice save as to costs – in

judicial review proceedings brought by GLP and Molly Scott Cato MEP, to whom

again I gave an identical personal indemnity. This was reciprocal in the sum of

£30,000.

As with this case, in each of those cases it would simply not be possible for the case

to have proceeded in the absence of a protective costs order.

Successes and failures

7. It may also be useful to update the Court about GLP’s successes and failures to date.

8. The GLP has brought or been the principal promoter of six cases since it started in

early 2017.

(1) the present case;

(2) a case against DExEU to seek to compel production of certain studies into the

effects of Brexit on different regions and sectors of the economy. This is the case

mentioned at paragraph 6(3) above. We failed to obtain permission on paper or

at the conclusion of an oral permission hearing. We had decided to appeal but

the Government decided to release the studies anyway following a vote in

Parliament and so we discontinued the appeal;

(3) a case against the Government to seek a reference to the Court of Justice of the

European Union (“CJEU”) on the question whether Article 50 can be unilaterally

revoked (which became Case C-621/18 Wightman & Others v Secretary of State

for Exiting the European Union). This is the case mentioned at paragraph 6(2)

above. Following a number of hearings, including a failed attempt by the

Secretary of State for Exiting the European Union to persuade the Supreme Court

to grant permission to appeal, a reference was made to the CJEU then

determined the reference deciding the underlying question in our favour;

(4) a judicial review of the Electoral Commission’s failure (a) adequately to

investigate links between Vote Leave and Darren Grimes and (b) application of

the law governing donations. This is the case mentioned at paragraph 6(1) above.

After we issued proceedings, on (a) the Electoral Commission agreed to reopen

the investigation and on (b) the High Court found in our favour and refused

permission to appeal (R (The Good Law Project Limited) v Electoral Commission

[2018] EWHC 2414 (Admin). Permission to appeal has subsequently been granted

by the Court of Appeal;

(5) a case to overturn a Home Office decision to deport two academics. The Home

Office reversed its decision shortly after the appeal was lodged;

(6) a further judicial review of the Electoral Commission’s failure (1) to investigate

whether the DUP acted lawfully in accepting reportedly the largest donation in

Northern Ireland’s political history and (2) to investigate whether the donor

committed a criminal offence in failing to register. Proceedings have been lodged

and GLP has applied for a costs capping order in that case although no date has

yet been fixed for a hearing of that application.

The purpose of this litigation

9. Although I addressed it carefully and at length in my first witness statement, and

there is a risk in me oversimplifying if I attempt to summarise it here, it might be

helpful if I briefly recap the purpose of this litigation. I have a longstanding interest in

the governance of HMRC and in good tax policy; it is a subject I have written about

dozens of times and in which I am a recognised expert. That is my sole interest in the

litigation. My interests are well aligned with taxpayers as a class – and with those

who believe society’s interests are served by the population at large believing that

HMRC seeks to uphold the law against weak and powerful alike and without fear or

favour.

10. To repeat, I have no meaningful private interest in this litigation. I have at most only

£1.06 at stake. Uber seems to be suggesting, although it is not entirely clear (see

paragraph 27 of its Skeleton Argument of 8 November 2017), that I am motivated by

a desire to advance the interests of the black cab trade. If that is what Uber does

mean I am afraid it is absolutely wrong to do so and I regret that it should be

suggested, without any proper basis for doing so, that my clear evidence to the

contrary is false.

11. I have been entirely properly transparent about my belief – albeit speculative

because when people contribute to crowdfunding they do not generally specify their

trade or say why – that a very substantial part of the monies that I was able to

crowdfund came from the cab trade. However, as I have stated above, I have also

been clear in my conversations with the cab trade that I was not taking the litigation

to benefit the trade. The trade has no control over the litigation and I do not run it

with any regard to the priorities of the trade or indeed any individual donor or group

of donors.

12. If it assists the court I can add that the black cab trade is not “standing behind the

Claimant” (to pick up the phrase used at paragraph 13(2) of Uber’s Skeleton

Argument of 8 November 2017). I did not speak to any representative of the trade

about the litigation before deciding to bring it or to launch the crowdfunding. I have

no reason to believe that the ‘trade’ would be willing or able to indemnify me

against adverse costs – and to the best of my knowledge no one has ever suggested

that they might. Indeed given the very substantial sums Uber are likely to incur

instructing Herbert Smith Freehills and leading counsel at Blackstone Chambers I

think it is enormously unlikely the ‘trade’ – which of course is highly fragmented –

would or even could provide such an indemnity.

13. One might legitimately wonder why HMRC is not taking a greater interest in Uber’s

tax affairs. Inevitably absent a candid explanation from HMRC, there will be some

uncertainty on this subject, but there is evidence (which I find compelling) that:

(1) Uber has on occasion exerted a powerful hold over the regulatory actions of

Government and governmental agencies. A copy of a tranche of email

correspondence disclosed by Transport for London (“TFL”) pursuant to a

Freedom of Information Act request showing how it has lobbied Number 10 and

others during the course of proposed TFL enforcement action can be provided to

the court. I remember clearly the shock I felt when I first read this

correspondence;

(2) HM Treasury has on occasion sought to lean on HMRC not to be “too hard” on

Amazon. I attach to this end a blogpost

(https://waitingfortax.com/2018/01/23/dont-be-too-hard-on-us-multinational-

treasury-to-hmrc/) (the recording referred to can be found at that URL) [included

in Exhibit JM 3]; and

(3) HMRC’s public responses to this litigation are difficult to make sense of. I attach

to this end a blog post addressing the answers given by senior HMRC officials

when questioned by the Public Accounts Committee about why HMRC had not

sought to raise assessments to protect the position of the tax authority from the

consequence of the expiry of statutory limitation periods which would prevent

HMRC from recovering tens or hundreds of millions of pounds from Uber

(https://waitingfortax.com/2017/12/21/uber-hmrc-and-the-public-accounts-

committee/). HMRC’s stated position, as I understand it, is that it can only raise

an assessment where it believes a taxpayer has a liability and it cannot raise an

assessment to protect the tax authority against the possibility that its initial view

turns out to be wrong. This is a position which – in my opinion – is almost self-

evidently wrong; is contrary to what I know HMRC’s practice to be; and is

contrary to what I understand to be binding Court of Appeal authority (as I

discuss in the blog post) [included in Exhibit JM 3].

The terms of any protective costs order

14. In its Skeleton Argument of 8 November 2017 (at paragraph 30) Uber makes a

number of points about the quantum of any protective costs order. It may be helpful

if I respond to those points.

15. First, as a QC specialising in tax I am in a position to make an educated guess at the

costs Uber, having instructed Herbert Smith Freehills and Sam Grodzinski QC, might

incur should the matter proceed to a hearing at first instance and with, I believe,

around £1bn of VAT and statutory interest at stake (without taking into account

Uber’s prospective future liabilities). I would expect its costs at first instance to be at

least £500,000 and capable easily of approaching £1 million. There would then, of

course, be the possibility, if not the likelihood given the sums at stake, of three

further appeals.

16. As things now stand I would estimate I devote around 75% of my time to working

unpaid in the public interest and I have three young children and very substantial

mortgage debts. Although I am committed to serving the public interest I am simply

not in a position to bear material additional financial cost. The proportion of my life I

spend working unpaid in the public interest – a step I took very shortly after taking

Silk – already carries a very substantial opportunity cost for me and my family. If it

assists the court, by way of analogy, the Board of GLP has imposed a £20,000 cap on

the amount of uncovered financial exposure it has to any individual piece of

litigation. If it is unable to reduce its risk beyond that level the litigation must be

discontinued.

17. It follows that I reject Uber’s suggestion that the litigation could continue without a

costs cap or that I can reasonably be asked to commit more than my unpaid time to

litigation in which I have no financial stake.

18. Second, the suggested £20,000 cap is a rough and ready number representing what

is left after I have regard to a rough approximation of what it would cost me

(including VAT which I am unable to recover) to pay my own legal team on the

(already non-commercial) basis upon which they were instructed. Were the court to

agree a cap albeit of a higher amount I would ask my team whether they would be

prepared to accept a reduced entitlement and if they were not I would ask the Board

of Good Law Project whether it might properly make up the shortfall. My

expectation is that it might well agree to make up a small part of any shortfall – I

would be optimistic that it might pay £10,000 to keep the litigation afoot – however,

it is not in good financial health (I have said publicly that I do not know how much

longer I can keep it running given its limited funding and the enormous burden it

places on me personally) and so I do not think it would be reasonable to expect

more.

19. Third, I do not see how Uber can sensibly suggest, as it does, that litigation of this

nature should be fought by a single junior barrister. With respect, I say that is a self-

evidently nonsensical proposition given the sum at stake for Uber. I note that by

securing the agreement of Counsel to work at Crown rates I have already secured

the agreement of my team to work at a very substantial discount – I would estimate

approximately 75% – to their normal rates.

20. Fourth, Uber in its Skeleton Argument of 8 November 2017 seeks to suggest there is

some inconsistency in the suggestion that a costs management order might be an

alternative to a protective costs order. There is no inconsistency. Absent a cap to my

liability to adverse costs (and we have suggested £20,000 including VAT) the

litigation will not proceed. The machinery whereby that cap is imposed is mere

machinery. However, it seems to me that, given the public interest nature of this

litigation, a protective costs order is the appropriate machinery.

21. Finally, fifth, it is impossible to know for certain whether I could raise material

further monies by way of crowdfunding. However, I have to say I think it is very

unlikely. The money I raised was 23 months ago and I indicated that the sum I raised

was intended to cover my exposure on an anticipated protective costs order. Since

then, in large part because of the ill-fated attempt to pursue an alternative remedy, I

have made substantially no progress. I am relatively frequently subject to aggressive

calls on social media – the platform I used to raise the money I did – to refund

money to those who contributed to the crowdfunding and I have no doubt that

those calls would intensify were I to ask for more.

Academic literature

22. Crowdfunded public interest litigation is a relatively new feature of the litigation

landscape. To that end, and in case it assists the Court, I attach a paper written and

published by Joe Tomlinson [included in Exhibit JM 3], a Lecturer in Public Law at

King’s College London and Research Director of the Public Law Project and which I

understand to be shortly to be published in the journal Public Law.

The paper focuses on the prospective importance of crowdfunding in an

environment in which legal aid has fallen away. It is the only UK academic treatment

of crowdfunded public interest litigation of which I am aware (and see footnote 8

thereof). It observes that public interest litigation “does not necessarily have to take

the form of judicial review” (see footnote 6). It discusses both GLP and my activities

at some length, mentioning in passing the present case (at page 11). I confirm, for

the avoidance of doubt, that (to the best of my knowledge and recollection) I have

never met or spoken to Mr Tomlinson.

Statement of Truth

I, JOLYON TOBY DENNIS MAUGHAM QC, believe that the facts stated in this

statement are true.

Signed

Dated 2 January 2019

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF

ENGLAND & WALES

BUSINESS LIST (ChD)

B E T W E E N:

JOLYON TOBY DENNIS MAUGHAM

Claimant

- and -

UBER LONDON LIMITED

Defendants

__________________________________________

WITNESS STATEMENT

OF

JOLYON TOBY DENNIS MAUGHAM

________________________________________

Edwin Coe LLP

2 Stone Buildings

Lincolns Inn

London

WC2A 3TH

Claim No HC-2017-001496

IN THE HIGH COURT OF JUSTICEBUSINESS AND PROPERTY COURTS OF ENGLAND & WALESBUSINESS LIST (ChD)

B E T W E E N :

JOLYON TOBY DENIS MAUGHAM QC

Claimant- and -

UBER LONDON LIMITED

Defendant

_________________________________________

EXHIBIT “JM 3”_________________________________________

This is the Exhibit marked “JM 3” referred to in the Witness Statement of Jolyon Maugham

dated 2 January 2019.