Why try ADR/mediation?

Mediation requires skill, legal and commercial expertise and an understanding of each party’s state of mind and motivation.

The mediator’s role is to bring the parties to a settlement, whilst always remaining impartial and unbiased. He or she works for both parties equally. Commercial mediation will normally be completed within one session, which may last from a few hours to a whole day, possibly going into the evening.

As long ago as 2001, Lord Woolf LJ gave this guidance in R (Cowl) v Plymouth City Council [2001] EWCA Civ 1935 at [1]:

…. both sides must by now be acutely conscious of the contribution alternative dispute resolution can make to resolving disputes in a manner which both meets the needs of the parties and the public and saves time, expense and stress.

Recent tax cases offer a salutary reminder of the importance of using tax mediation service before litigating a dispute. The extra-ordinary irrecoverable costs bill run up in one of the cases considered in my Tax Journal article illustrates the risk of failing to have resort to tax mediation services. Read my article about those cases here.

Tax mediation gives the parties the freedom to put tax disputes and appeals with HMRC or professional negligence litigation against a tax adviser aside and to enter into a “without prejudice” commercial negotiation in an effort to find a settlement.

Tax mediation services if used effectively put the parties to a dispute in control and takes away the risk and unpredictability of a third party judge making their own decision and imposing costs awards.

Downloads: Sample Agreement to Mediate and Mediation Rules – 2019 Edition.

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Patrick helps people and firms caught up in legal and tax disputes to explore the use of mediation to settle their dispute instead of leaving it to a court to decide.

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Resolving tax disputes and avoiding litigation with mediation.

Mediation as a means of resolving commercial disputes involving tax has been around for ages but has only come to the fore in disputes with HMRC in the last six years or so.

In tax disputes, mediation is used in two separate contexts.

First, there are tax disputes that do not involve HMRC, at least not directly in the sense that HMRC is not a party to the dispute. Examples of such disputes include disputed tax liabilities arising out of the tax warranties and indemnities given by the parties to each other on the sale of a business or a company; and also disputes as to liability for negligent tax advice where a client is claiming against his tax adviser for bad tax advice.

The second context is where a taxpayer and HMRC are seeking to avoid litigating their dispute before the tax tribunals and the courts by relying on mediation to achieve an agreed outcome to the dispute. Here the parties may be in dispute because of a previous tax decision of the tax tribunal, an entry in a tax return, the conduct of a tax investigation where the taxpayers may be faced with a tax appeal or tax deadlock and these situations are where mediator skills can be essential in resolving disputes.

Each party needs to attend with a decision-maker who has authority to settle in the mediation. Ideally, this will be full authority. Legal advisers are welcome to attend with their clients or on their own as long as they have authority to settle.

Putting you first

Patrick Cannon

Patrick is a CMC accredited mediator.

He has over 35 years professional experience as a solicitor and barrister of tax disputes and appeals of all types ranging from civil and criminal tax enquiries and tax investigations by HMRC to claims against tax accountants and other professionals for negligence. Patrick is strictly neutral and in a tax mediation will not offer legal advice or opinions although he can advise on process.

Mediations normally take place here in Tax Chambers although he can travel to other locations in the UK and abroad to mediate where this is convenient or appropriate.

Patrick’s fees for tax mediation services are discussed and agreed by his Clerks with the parties involved on a bespoke basis and are based on a mediation lasting one day and are recorded in my standard mediation agreement which both parties sign. We normally ask to see the papers a few days in advance and these will be returned or destroyed as required at the end of the mediation.

If you have a dispute that is currently being litigated or is likely to be and you would like to explore the possibility of settling it through mediation instead of leaving it to the court to decide for you please get in touch with Patrick for a no obligation chat.

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Office Address

Old Square Tax Chambers
15 Old Square
Lincoln's Inn