Appearing as an advocate for your client before the Commissioners or the VAT and Duties Tribunal is a challenging responsibility for a Chartered Tax Adviser. You should not accept such instructions lightly and it will be appropriate in many situations to engage the support of legal counsel to serve the best interests of your client.Advocacy for the tax adviser
From time to time a member of the Institute may represent a client in a tax appeal heard by the General or Special Commissioners or the VAT and Duties Tribunal (see footnote). Our Professional Rules and Practice Guidelines (appendices 6 and 7) include guidance on representation before these bodies including some of the important ethical principles.
Appearing as an advocate for your client before the Commissioners or the VAT and Duties Tribunal is a challenging responsibility for a Chartered Tax Adviser. You should not accept such instructions lightly and it will be appropriate in many situations to engage the support of legal counsel to serve the best interests of your client. For those who have the confidence to represent their clients in this capacity, I commend the following article by Penny Harper, Director of Professional Development Programmes for Clients, Inns of Court School of Law. It outlines the key factors to be taken into account in preparing your client’s case.
In recent meetings of the Institute’s Standards Committee, we have concluded that it is essential that those of our members who may represent their clients before the commissioners or VAT and Duties and Tribunal should be aware of relevant training. The Inns of Court School of Law runs programmes including advocacy, evidence, procedure, drafting witness statements, expert report writing and giving evidence in court. Please make sure that you are competent to represent your client’s best interests when you next appear at a hearing.
The number of contested hearings before VAT and duties tribunals, Special and General Commissioners is increasing. Tax advisers are increasingly called upon to represent their clients at these hearings. Here are some tips on developing the skills of an advocate and successfully presenting your client’s case.
- Prepare by identifying relevant law, issues, fact, and evidence.
- Make effective use of documentary and oral evidence.
- Make use of statements of agreed fact.
- Do not forget your overriding duty is to the tribunal.
- Speak slowly and clearly and make eye contact with the decision maker.
- Use questions to control your own and the other side’s witness/es.
- Be persuasive, clear and memorable.
The golden rule is preparation, preparation, preparation. Effective advocacy is underpinned by careful case analysis. This includes:
- Identifying the issues in the case e.g. have the Revenue quantified the taxpayer’s liability correctly
- Identifying, analysing and evaluating the facts. Obtain all of the facts and review them critically. If new facts emerge at the hearing, perhaps from the other side, the whole basis of the client’s case may be undermined. The facts that support your client’s case (strengths) and the facts that undermine your client’s case (weaknesses) should be identified. The facts should be evaluated to reveal gaps or inconsistencies in your own case and the other side’s case. This is useful for cross-examination. It would be tempting, but wholly wrong, to attempt to devise facts to assist the client’s case. The tax adviser advocate has a primary duty, which overrides any duty he owes to his client, not to deceive or knowingly or recklessly mislead the tribunal: para. 2 of Appendix 7 to The Professional Rules and Practice Guidelines for the Chartered Institute of Taxation [‘PR&PG’]
- Identifying the best sources of evidence to prove the facts relied upon. This may be documentary (e.g. invoices or accounts) or oral witness evidence
- Identifying relevant law (e.g. statutes or decided cases)
- Identifying a case theory on which your client’s case will hang. For instance, this can be used to persuade a tribunal why an assessment is excessive and
- Checking to see that there are no conflicts of interest.
Knowledge of procedure, evidence and best practice
You must be familiar with procedure, evidence and the use of statements of fact: Appendix 6 PR&PG.
Use of documentary evidence
A party cannot simply turn up at a hearing and expect to put in evidence (without notice) any document he cares to choose. A list of documentary evidence should be compiled, and sent to the other side so they can agree to admit it as authentic (though not necessarily agreeing that its contents are true). If they do not agree that the listed documents are authentic, a ‘notice to inspect and admit’ must be served. If the other side’s list contains a document that you doubt the authenticity of, or if they have an original document which you wish to inspect, you must serve a ‘notice to produce’.
An agreed indexed and paginated bundle of documents should be produced for the hearing.
There are two types of witnesses who give oral evidence, experts and witnesses of fact. Witnesses of fact give evidence of what they have seen or heard (not what other people have told them occurred, this is hearsay). They should avoid drawing inferences, giving opinions or forming conclusions. Expert witnesses give evidence of both fact and opinion.
You should draft witness statements for your witnesses of fact. They must be in the words of the witness and signed by the witness as being true, see PR & PG Appendix 7, paras 3.3.1 & 3.3.3. The commissioner/tribunals may allow a witness of fact to refer to his statement, or let it stand as the examination-in-chief, but generally the evidence must be given by the witness without looking at the statement prepared for the purpose of the hearing. The witness statement assists you to ask the witness questions at the hearing. All witnesses are entitled to refer to contemporaneous notes, that were made at, or near, the time the event took place. These can include notes of meetings, accounting records and so on. An expert witness will write his own report (complying with Part 35 of the Civil Procedure Rules 1998). Witness statements and expert reports should be exchanged well before the hearing. An expert witness can refer to his report while he is giving his evidence.
You should prepare (not coach) witnesses so they understand their role, familiarise themselves with the notes, statements and documents and understand their weaknesses and strengths for cross-examination; see PR & PG Appendix 7 para 3.3.3.
If you or your opponent (tax inspector) have a dual role as both expert witness and advocate, be sure to separate your role as an expert witness (giving factual evidence and opinion) from your role as an advocate, who advances arguments to persuade the tribunal: see PR & PG Appendix 7 para 6.3.
Statement of agreed facts
You should try to agree facts with the Revenue (see PR & PG Appendix 6 para 1.7). Statements of agreed fact are particularly useful where a point of law only is in dispute. The Revenue are reluctant to agree facts where the facts are in dispute.
Procedure at the hearing where the burden of proof is on the taxpayer
You, as the taxpayer’s adviser, will open the case. Your witnesses are examined-in-chief, cross-examined and re-examined. You sum up the case. Then the Revenue open their case. Their witnesses are examined, cross-examined and re-examined and their case is summed up. There is finally a right of reply for you, the taxpayer’s adviser. If the burden of proof is on the Revenue they open first and their witnesses are called first.
Preparation by case analysis to establish the issues, facts, evidence, law and a case theory is the key to effective advocacy. You should then prepare bullet points to act as an aide-memoir. Do not read out a script. Speak at a natural pace and make eye contact with the decision maker. Be calm, clear, professional and keep the evidence simple. Listen carefully and note down what witnesses and other advocates say. Aim to get across your best points and insulate your worst points.
This is the introduction to your client’s case. The decision-makers will not be familiar with it before the hearing. The opening should be like a guided tour. The travellers should know at the start of the journey where they are going and how they will get there. Do not state personal opinions, but make submissions ‘I submit’ not ‘I think’.
- Introduce yourself and your opponent
- Ensure the tribunal has all the documents
- State the nature of the case e.g. appeal against assessment
- Summarise the factual background to the case but without reference to disputed facts. E.g. ‘The applicant is appealing against an assessment made on 18 June 2000’
- Summarise the law (statute, regulations, case law) and state who has the burden of proof
- State the issues to be decided e.g. law and/or disputed fact
- Summarise your client’s contentions on each issue by reference to documentary and witness evidence. Avoid dealing with disputed facts where you open first
- Introduce your case theory to help persuade the tribunal of your client’s case
Examination-in-chief of your own witnesses
You must first ask your witness to give his name, address and occupation (with an expert witness get him to give details of his qualifications and experience). There are then three aims of examination-in-chief.
- Establishing your case by eliciting key facts in evidence from your witnesses.
- Presenting the evidence so it is clear, memorable and persuasive. Make a list of topics to cover and put them in a logical order. One way to do this is to take each sentence in the witness statement and compose a question to elicit those facts. This helps the witness tell the story and breaks it into small manageable chunks. You must not lead a witness during examination-in-chief. A leading question is one that suggests, or tends to suggest, its own answer, assumes facts not yet established or facts in dispute. Instead use open interrogative questions such as ‘where’, ‘what’, ‘which’, ‘who’, ‘why’, and invitations such as ‘how’, and ‘describe’ to avoid this
Do not ask witnesses to give hearsay evidence.
- Insulating the witness from cross-examination, by anticipating weaknesses and gaps in your own witness’s evidence and covering them in a favourable light during examination-in-chief.
Cross-examination of your opponent’s witnesses
The style of questioning in cross-examination is critical. You must control the witness, ask only leading, closed questions. Don’t ask open questions as you did in examination-in-chief. Give the answer in the question: ‘You went to the meeting on 14 April last year, but you left half an hour before the finish?’ Answer: ‘Yes’.
The aims of cross-examination are:
- To advance your client’s case (and put your own) by
- eliciting favourable testimony
Look for helpful evidence or similarities between your witnesses and their witnesses
- Developing your case theory, by putting your case to the other side’s witnesses. Even if they
disagree it still allows you to develop your case theory
‘The book keeper didn’t keep the books in order did she’
‘You can’t see the actual cash flow can you?’
- To undermine, limit and discredit evidence of the witness.
- Limit evidence, by showing how the witness did not see or record certain things. Witnesses.
often observe only a part of an event or play a part role
- Discredit evidence; uncover mistakes, misconceptions, selective recall, conjecture, assumptions and opinions. Aim to discredit the evidence by attacking the witness’s ability and opportunities to observe events (lapsed time, memory, similarity of events) or his record of what happened. Use documents to assist in this process.
- Discredit the witnesses himself by pointing out inconsistencies between his evidence and conduct, evidence in his statement and oral evidence and with other witnesses.
Re-examination of your own witness
- To repair damage done under cross-examination, clarify, and explain, matters arising under cross-examination
- You must not adduce fresh evidence or repeat examination-in-chief.
This is a formal submission setting out your arguments. Restate the law and the issues to be decided. Summarise your contentions on these issues with reference to the documentary and oral evidence adduced. Use key words/phrases from the evidence to illustrate your case theory and to assist the tribunal to find in your favour.
When the other side have summed up their witness evidence you can present counter-arguments, draw on the evidence their witnesses have given. Once again link your case theory to the issues, law and facts.
Footnote: rights of audience before the General and Special (tax) Commissioners may at the discretion of the Commissioners be confined to solicitors or barristers (regulation 14 of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994, SI 1994/1811 and regulation 12 of the General Commissioners (Jurisdiction and Procedure) Regulations 1994, SI 1994/1812.
This article appeared in Tax Adviser September 2000 edition