Judgment handed down in HMRC v Labeikis & Ors [2024] EWHC 2009.

The High Court has just handed down judgment upholding HMRC’s appeal in the case of HMRC v Labeikis & Ors [2024] EWHC 2009 following a two-day hearing in March. Sam Chandler appeared as sole counsel for HMRC.

The appeal arose out of a challenge by a number of claimants to the validity of anti-avoidance legislation called the Loan Charge. That challenge was brought on grounds of alleged inconsistency with EU and ECHR law, and it took the form of private law proceedings under CPR Part 8 (in the KBD) rather than judicial review proceedings under CPR Part 54. HMRC applied to strike out the claims on the grounds of abuse of process. In his first instance decision of November 2021, Master Dagnall refused the application: see [2021] EWHC 3237.

The appeal, which was heard by Mr Justice Mould on 13 and 14 March 2024, concerned the question of forum – the circumstances in which it will be an abuse of process for public law challenges to be brought in private law proceedings, rather than by way of judicial review under Part 54. The judgment considers the interaction between this principle, known as the exclusivity principle under Mackman v O’Reilly, and the EU law principle of effectiveness.

Mr Justice Mould concluded (in agreement with HMRC) that the Master’s refusal to strike out the proceedings was an error of law, and that the claims ought to have been struck out.

The judgment can be found here.