Contractors who receive unfair treatment from the Revenue could win the right to monetary compensation, if the Law Commission review allows it.
What Is The Law Commission
The Law Commission is an independent agency whose purpose is to review UK laws and to make broad changes where practices are either outdated or unfair. Law in the UK goes back to the Anglo-Saxons in the 8th and 9th centuries, and while a great part of it has been updated over the years, there are still laws on the books that belong to a different time and social context.
Updating old laws is part of the Law Commission's job. The other part is to ensure that the law is as fair, modern, simple and as cost-effective as possible. The Commission also conducts research and consultations in order to make systematic recommendations for consideration by Parliament. The Commission also tries to streamline the law to reduce the number of separate statutes.
Duty of Care
One of the broad areas of law under consideration by the Law Commission is "Remedies against Public Bodies.' That means redress for those who have been wronged by a government agency or organisation.
Contractors have suffered some rather serious wrongs from the Revenue in recent years, but there has been no right of redress. One contractor actually brought suit against the Revenue when HMRC's failure to process forms on time cost that contractor £500,000. The contractor lost: the courts pointed out that the Revenue has no 'duty of care' in law, meaning that the Revenue is not responsible for fixing any mistakes it may make.
The Law Commission is doing important work which could institute duty of care for the Revenue
John Kell-PCG
And we have all seen in the Arctic Systems case that the Revenue wrongly attempted to tax income that was shared in dividends between husband and wife. That case cost thousands in legal fees to Geoff and Diana Jones of Arctic Systems, as well as to the London-based Professional Contractors Group which helped support them.
Says John Kell, policy director of PCG: ''the Law Commission is doing important work which could institute duty of care for the Revenue.''
Work To Be Done
According to the Law Commission's discussion of the subject, there is clearly work to be done here. Says the Commission: ''...the general rule remains. Set against the backdrop of the current availability of a private negligence action, this means that there remains the key gap in the law that we identified in the discussion paper: where a public authority has acted unlawfully in a public law sense (but not in breach of Convention rights or European Union law) and thereby caused economic loss to the individual, the individual has no claim against the authority.''
The problem, of course, is that the Law Commission simply provides recommendations to the Government which the Government may or may not accept. But in the case of such a popular cause as obtaining redress from government agencies when they do wrong, would the Government be able to ignore the Law Commission's work?
There remains a key gap in the law
Law Commission
We don't think so. And we await with great anticipation the conclusion of the Law Commission's report at the end of this year, and look forward to supporting it. Surely a government agency above all should be responsible in law when it makes a mistake!