A tax silk who won a negligence claim over advice on film financing schemes is this week facing a Court of Appeal challenge.
Andrew Thornhill KC is said to have assisted in devising tax schemes, described as ‘high octane tax avoidance’ which were advertised as providing tax benefits. The schemes were later shut down by HM Revenue and Customs.
In the earlier claim, 10 claimants – who invested more than £3m between them – had their cases tried as sample claims as investors tried to recover their losses. Mr Justice Zacaroli dismissed the claim last year, ruling that Thornhill ‘owed no duty of care to the claimants’ and noted that investors were expressly advised to take independent advice about the purported benefits.
The appeal, which opened in the Rolls Building this week before the chancellor of the High Court, Sir Julian Flaux, Lady Justice Simler and Lady Justice Carr, heard the investors who joined the film finance investments argue against the High Court judge’s findings in relation to duty, breach and reliance and causation.
The appellants, represented by Roger Stewart KC, claim Thornhill should have stated that the schemes did not work or that there was a ‘real risk’ that they would not. Thornhill, represented by Tom Adam KC, argues that documents about the schemes told prospective investors to take independent tax advice.
Stewart said the appellants have ‘subsidiary complaints about lack of risk warnings’. He added: ‘[Thornhill] knew [the selling of the scheme] was going to be done with his advice.’
Stewart told the court: ‘These investors were portrayed at trial as engaging in high octane tax avoidance. In the opening parts of my learned friend’s skeleton for this appeal he identified Mr Millar who was one of the trial-selected claimants and he says Mr Millar took his own advice and that it would be an outrage if the court were to place a duty of care on Mr Thornhill.
‘[There were] 110 claimants, they invested varying different amounts. Mr Millar was the only one out of 110 claimants to take any alternative legal advice. Another seven out of 110 took advice in one form or another from an accountant. Out of 110, 102 took no other advice.’
The hearing continues.
