During the first week of lockdown, as we were all suddenly launched into a world lacking human contact and increasing conversations with our screens, I represented a client at the Supreme Court’s first ever remote hearing – Fowler v HMRC https://www.supremecourt.uk/cases/uksc-2018-0226.html. It is a case I have been running for the best part of 10 years, together with Jonathan Schwarz of Temple Tax Chambers, and considered the interpretation of double tax treaties, and the impact of domestic law deeming provisions on treaty interpretation.
It was a privilege to be part of the solution to keep the Justice system moving in the midst of disruption. The Justices were very conscious that it was an unfamiliar and unusual situation and there was a real sense of humility and sensitivity. It was heartening to see how adaptable everyone was, and a great deal of care went into ensuring everyone felt they had a fair and proper hearing.
There are obvious procedural and practical challenges to remote hearings, of course. We have been thrust into an artificial world of communication where you can’t take in someone’s body language in the way in which we are used to. The biggest challenge for me was not being able to have the usual dialogue with my Barrister. There were no yellow sticky notes, and no taps on the shoulder. But thanks to the practice runs beforehand, I found that using 4G to text, and leaving the WiFi to stream the hearing was a simple workaround.
It was also clear who had decent WiFi. I did several practice runs beforehand and found that my WiFi would not support high-quality video streaming at the same time as having numerous other programs open. I also made sure to prepare for the worst – I had two laptops open in case one went down, and I’d recommend having a colleague on hand who could take over for you in another location.
A new normal?
I came away from the hearing feeling overwhelmingly positive about the process and the success of the hearing raises the question of whether a virtual Justice system could become standard practice for civil matters in future, and even be a preferred option in some cases. I believe it could have lasting positive implications for the legal sector and our clients. And from a personal perspective, it was liberating to be able to work from the comfort of my own home.
In my role at KPMG I act for financial institutions, corporates, funds and high net worth individuals on a broad range of tax disputes with a particular emphasis on international tax and structured finance dispute resolution. The speed and complexity of business change is increasing the risk of tax disputes and cases are becoming more time-consuming and lengthy, taking an ever-greater slice of management time and company resources. As authorities share more information and new regulations are enacted in many countries, the scope for challenges increases greatly. It goes without saying that this is all adding to the already significant backlog of the tax tribunal system. Of course, emergency cases should take precedence; but it seems unnecessary and unacceptable to push hearings back that are related to transactions executed a significant period of time ago when we can collaborate and use remote working technologies and practices to work through it.
Yes, remote hearings feel artificial, and several of my peers have commented to me that they don’t feel they will ever be able to get used to the remote environment when cross-examining a witness. However, I believe it is something we must get used to Tax Tribunals would (relatively) routinely take video link witness evidence even before Covid-19. Reading body language – whether that is of a witness, judge or opposing advocate is of course more difficult where one is watching on video link. However, we are faced with a pretty stark choice – between delay (and no-one knows how long that delay will be for) and accepting the deterioration of evidence which inevitably will occur during that delay – or trying to make a remote system work.
This way of working will clearly take some getting used to. But I feel there is a huge opportunity here for the system to become more accessible and agile. It is also a good time to reassess processes (how good is your electronic bundling? Time that would have been taken in copy checking a physical bundle needs to be reallocated to perfecting the electronic bundle) and to challenge whether the case can be run more efficiently. In tax cases, the vast majority of evidence, and particularly of witness evidence, is given by the taxpayer. It is in the interest of all parties to agree upfront as much as the evidence as can possibly be agreed, so that remote hearings can focus on the real areas of dispute – and I would hope that the tribunal would be unimpressed if witnesses are required to attend a remote hearing, only for HMRC to make the decision not to cross examine at the last moment – which happens surprisingly frequently at physical hearings.
From what we have seen across the judicial system already, the courts and tribunals are responding positively and flexibly to the challenges we are facing. When we get to the other side, everybody will be changed by what we’ve been through and greater use of remote hearings could be the way we can offer our clients a better, cheaper service.
Angela Savin, Solicitor and Partner in KPMG’s Legal Services Tax Disputes Practice