Advice from a tax silk on film financing schemes could not be 'objectively assumed' to be relied on by investors, the Court of Appeal has heard in a negligence claim.
Andrew Thornhill KC is said to have assisted in devising investment schemes, advertised as providing tax benefits, and described as ‘high octane tax avoidance’. The schemes were later shut down by HM Revenue and Customs. A claim by investors seeking to recover their losses was dismissed last year in a judgment noting that investors were expressly advised to take independent advice.
In an appeal before the chancellor of the High Court, Sir Julian Flaux, Lady Justice Simler and Lady Justice Carr, Tom Adam KC, for Thornhill, said that the judgment showed that Thornhill did not owe investors a duty of care. He told the court that investors were told to 'get your own tax advice and then required to warrant that you have taken your own tax advice…[and that] you only rely on your tax advice’.
He added: ‘It is not on any objective assumption for investors to rely on the advice given to the promotor of the scheme. [Solicitors] do not owe any duty to people who are not clients and that is the default position. It does not matter if it is conveyancing, litigation or wills.’
Thornhill 'gave his genuine views on the scheme', he said, and 'giving your opinion was not selling'.
He added: ‘My Lord, my ladies, at heart this is a very simple case, if I was a very courageous barrister I would spend 15 minutes on three documents.’ He told the court that the scheme was unregulated, and investors were given a ‘red notice’ that they had ‘no protection’.
The hearing is due to finish today.
