Why we need to know about Article 50

There is no doubt there is a political route to revocability: if the other 27 agree, we can remain. But to improve the bargaining position of the UK, to ensure we retain the opt-outs and rebates that we presently enjoy, and to place the decision entirely in the hands of the UK’s Parliament and – if it chooses – its people we must seek to establish a legal route to revocability. We must seek to secure a right for Parliament to withdraw the Article 50 notice – if it chooses.

The permission decision of the Court of Session will be handed down on Tuesday at 9.30am. I was warned before the hearing – once the judge was known – that we were likely to have a bumpy ride and so it proved. But we have a right to appeal to the Inner House and, should we need it, there is an appeal to the Supreme Court.

I believe we are right and the question should be referred. There are a number of reasons why I say this. But the main argument is this.

You cannot sensibly pretend that Parliament is not considering whether to revoke the Article 50 notice. The only amendment to the Repeal Bill that passed in the Commons opened the door to exactly that possibility. But don’t accept my characterisation: it’s exactly how (for example) Sir Oliver Letwin (speaking against it) put it. So did others.

In those circumstances it is vital that the UK Parliament knows whether it possesses that power. Indeed, it is vital that the EU27 knows whether Parliament possesses that power. And both need to know before the question whether to exercise it arises. If Parliament doesn’t know then – should Parliament come to exercise the power – there will be chaos for the UK and the r27. There will be a period of many months in which we and they may not know whether the UK is inside or outside the EU. So it is not practical and it is not sensible to wait and see. When decisions of this magnitude are being contemplated the rules must be known in advance.

And there is no good argument to the contrary. None at all.

Stripped of legal niceties, all the Government can say is, ‘we do not plan to revoke’. But (see that Oliver Letwin quote again) it is not for Government to decide. It is for Parliament to decide. (And, of course, both Governments and their positions can change.)

That is why I think it is important that we know the answer. And if, as I expect, Lord Doherty in the Court of Session disagrees and refuses to refer the matter to the CJEU it will be my advice to the seven petitioners that we should appeal to the Inner House of the Court of Session and, if necessary, the Supreme Court. (We have a right to appeal to the Inner House; we would need permission for a further appeal to the Supreme Court).

To do this we will need further funds.

As matters stand (in this case as in many others that I and the Good Law Project am and have been involved with) I am personally indemnifying the petitioners against the risk of costs falling upon them. I have no money other than what I have earned in a relatively short career at the Bar. That is a difficult financial burden to sustain in one piece of litigation; it is impossible across many.

So, if we lose on Tuesday, I will launch a further fundraising on Crowdjustice to protect us against adverse costs. You will have the opportunity to decide.

In the meantime, you can see our claim here.

You can see the Government’s answers here.

You can see the affidavit of Joanna Cherry QC here.

And you can see the affidavit of Andy Wightman here.

And you can see the speaking note of Aidan O’Neill QC here.


Don’t be too hard on US multinational: Treasury to HMRC

The link below is to an extract from a covertly recorded 70 minute conversation between Guy Westhead, a senior member of HMRC’s team dealing with VAT policy, and a Mr Richard Allen that took place in late 2015.

At the time of the conversation, Guy Westhead was a senior HMRC officer. During the conversation he described himself as being one level below the Director of Indirect Tax at HMRC. Below is a photo, taken several months after the covertly recorded conversation, of him sitting behind the then Financial Secretary to the Treasury, David Gauke. Mr Gauke was, at the time, appearing in a debate before the Backbench Business Committee on VAT Evasion and Internet Retailers.

Guy Westhead

Richard Allen is an individual who has lobbied HMRC for better enforcement of VAT law. The unusual circumstances in which Mr Allen came to have and record that conversation are set out in this document: Signed Statement. The Appendices mentioned in that Statement are the photo shown above (Appendix Two) and the handwritten letter and private email posted at the bottom of this blog post.

The whole recording is remarkable. It was recorded covertly and so I have not published it in its entirety. However, there seems to me to be a compelling public interest in the publication of the extract linked to above because it contains this exchange:

RA: What worries me is that ministers have some kind of agenda to basically not annoy Amazon. If Amazon does something illegal Amazon has to be punished in my view.  In America they tried things like “that’s it we are not building a warehouse in your State” and all this sort of stuff…

GW: I’ve heard of that. I’ve heard from the Treasury; the Treasury didn’t want us to be too hard on Amazon. But I think that was a brackets “yet” close brackets.

In the past, writing posts like this, I have looked at the evidence in the public domain concerned how HMRC behaves towards multinationals and I have concluded that it does not make sense.

Something, I have said, is impeding HMRC’s inclination to apply the law against large US tech companies (in that post, Uber). As I put it:

I can see no good reason why HMRC should adopt this stance. None at all. It is inexplicable to me – unless HMRC’s conduct is motivated by factors otherwise than collecting the tax demanded by the law. I do not know what those factors might be. But this smells very bad.

Elsewhere, I speculated:

Both that blog post and that tweet were written before I had met Mr Allen or was aware of this exchange. However my speculations now seem well founded. This exchange is direct evidence from a senior HMRC official, speaking in his field.

The issue, for me at least, is not what did or did not happen to Amazon. The issue is that the powerful and highly politicised Treasury thought it appropriate to seek to influence how HMRC exercised its statutory functions to cause it to go easy on one large and powerful US tech company (here, one accused of facilitating tax evasion).

And if one why not others?


[I wrote to Guy Westhead on Friday to give him an opportunity to respond and received no reply].

Appendix One


Appendix Three

Appendix Three

Six reasons why a referendum on the deal won’t hurt our bargaining position

Both Barry Gardiner on the closed Left of British politics and Daniel Hannan on the buccaneering Right have warned against talk of a referendum on the outcome of negotiations. Both contend it weakens the UK’s negotiating position.

This is how their argument goes.

The EU would rather we stayed – we are significant net contributors to its budget after all – and so they will offer us a bad deal if a referendum is on offer. By doing so – by giving the electorate a choice between a bad deal and remaining – they hope to persuade the electorate to choose to Remain. And to get what they want.

But is this analysis right? Does it bear examination?

Here are six reasons why it seems to me it does not.

1. The real negotiations will happen after any referendum

We are contemplating a referendum before we leave the EU. Barring some change in direction, we will leave the EU at the end of March 2019. What we presently envisage is that, by that date, we will have agreed, at most, the broad outlines of a deal. This is why we need a transitional period.

The consequence of this is that the actual negotiating will take place after the referendum. It can’t sensibly be argued that the EU would change its negotiating stance to influence the result of a referendum that had already taken place.

2. The EU has already made its position clear

The contours of the outcome of the negotiations are already clear. They flow from the choices that Theresa May has already made – to leave the customs union and the single market. And from the EU’s position that the four freedoms are indivisible and that (as is logically self-evident) a country outside the EU, which does not contribute to the EU’s budget, and which is not bound by EU rules, will not enjoy the advantages of EU membership.

This matters because the logic of the argument that the referendum would influence the EU’s negotiating stance is that the EU would offer a worse deal so that voters rejected it and the UK remained in the EU. But voters are likely already to know enough about the shape of our future relationship with the EU to know whether they want it or not.

They now, already, for example, that Brexit will mean an end to EU citizens having the right to live and work in the UK. But they also know that it will mean an end to UK citizens having the right to live and work in the EU. And that it will mean a worse trading relationship with the EU. And that there is no sign of significant extra spending for the NHS.

As to the detail that remains to be negotiated, it is precisely that: detail. Very few voters will be influenced by the precise nature of the non-tariff barriers between the UK and EU for widgets. And the EU’s stance on this detail is unlikely to influence voters one way or another. So why would the EU change it?

3. The EU is not stupid. It already knows where the country is.

The argument is that by calling for a second referendum you are somehow letting the EU into a secret – that a substantial part of the United Kingdom still wants to remain in the EU.

Here’s how Barry Gardiner put it (see link above):

“What that would indicate is, to our negotiating partners in the European Union is, ‘give the UK the worst possible deal and they’re more likely to stay in.’ So you would be undermining your own country’s negotiations. That’s what people who are calling for a second referendum are doing.”

But this assumes that the EU will learn something new and profoundly important – important enough to change its negotiating position – from the suggestion that we have a referendum on the final deal.

But the state of political debate in the UK is no great secret. The EU already knows a referendum is a possibility. It reads the opinion polls that show consistent majorities for remain. It knows MPs voted to amend the Repeal Bill so that Parliament must approve the deal. It knows that if Parliament is not minded to approve that deal it may well take the opportunity to put the question back to the people.

None of this is a secret to the EU. If the EU was willing and able to adjust its position to give the UK a worse deal to make it more likely for people to choose to remain it would have done that already.

4. The EU has very little room to change its negotiating position

If you’re the EU, this is already a rather complex negotiation.

It has forged a consensus between member states of what the broad parameters of what a deal will look like. And now it must maintain this consensus between the remaining member states. This is no easy task in a world in which Brexit will create, as between those member states, winners and losers. And in which, even within each member state, there are different interests to be traded off.

The EU must have regard to the interests of those who are significant exporters to the UK – and who may wish to continue trading on similar terms. And it must protect the unity of the European Union by securing that the populations of member states see a better future for themselves inside the EU than out.

It must look to the coherence of the trade agreements the EU has entered into already. And it must have regard to the precedent an agreement with the UK might set for trade agreements with bigger and prospectively more important trading partners than the UK – such as the US and China.

So the EU doesn’t actually have much room to manoeuvre to try and persuade people to vote to Remain in any subsequent negotiation.

5. The EU has little incentive to change its negotiating position

Those who support Brexit already contend that the EU is “punishing” the UK – presumably believing this will turn the electorate against the EU. By this logic, the EU, should it toughen its negotiating stance, would make a Remain vote in a referendum less likely. Indeed, by this logic, the best way for the EU to cause the electorate to vote Remain would be to soften its negotiating stance: such that calling for a referendum would strengthen our negotiating position.

Of course the force of this argument – contending that the UK is being punished for leaving the EU is a good way to persuade people we should leave the EU – is open to question. But it does demonstrate that, even were the EU considering ‘toughening’ its negotiating stance, it could not be certain that would have the effect of causing people to opt for Remain.

6. The evidence suggests the EU will not toughen its stance

There is no sign that the EU might change its position to try and persuade voters in the UK to support Remain.

Back in March 2016, Boris Johnson argued that by voting leave we might get the change to the EU we want. He said:

There is only one way to get the change we need, and that is to vote to go, because all EU history shows that they only really listen to a population when it says No.

But the EU has had ample opportunity since the Referendum to try and influence leave voters in the UK to change their minds. It could, for example, have offered some revised deal on free movement, for example, to seek to persuade leave voters to recant. But it has not.

So why would the EU toughen its stance now? If anything, as even Boris Johnson recognised, a referendum is likely to cause the EU to seek to offer concessions to the UK should we remain to cause it to do so.

We might get a better deal than is presently on the table.


Ideology – for those on the closed Left and the buccaneering right – is an easy sell. In a complex world it offers straightforward slogans. For detailed analysis it substitutes broad assertion. What use logic when you can play to prejudice.

But if you actually analyse the contention – if you really think about whether talk of a referendum weakens the prospects of a good deal – it vanishes into thin air.


Here’s what Brexit means: illegal bungs for the wealthy

For two days in a row the Telegraph – owned by two hugely wealthy men living in a tax haven – has given over its front page to demands for other hugely wealthy men to escape an apparent inheritance tax liability: Lord Edmiston, Arron Banks and Peter Cruddas.

But what’s the real story?

Inheritance tax isn’t quite a tax on inheritances. It’s a tax on gifts – transactions the immediate effect of which is to diminish how much you’re worth – made by individuals whether in life or on death. It’s subject to various exemptions including one for charities and another for recognised political parties.

But there is no general exemption for politically motivated spending.

The rule in question – section 24 of the Inheritance Tax Act 1984 – has been around since at least the Finance Act 1975. It was adopted by our Parliament – by our democratically elected MPs – and has nothing to do with EU law. (Ironically, back in December 2016 Arron Banks claimed to have legal advice that the European Convention of Human Rights rendered section 24 unlawful. I asked him for a copy of that advice and he promised to provide it to me but then broke his promise.)

So the law made by our own Parliament is clear. Parliament has said that if you give large sums – there are various exemptions for small donations – of money to political campaigns you will make a gift and have to pay inheritance tax on that gift.

And HMRC’s obligation is also clear. It is to apply that law and collect the tax that is due. If HMRC does not HMRC breaks the law. If they sought to let Edmiston, Cruddas or Banks off their proper tax liabilities they could (and no doubt they would) be judicially reviewed.

What of the affected individuals?

Each of the three leave voters affected is immensely wealthy and each has a chequered attitude to tax.

Lord Edmiston first. The Mirror reported in 2015 that he was worth £440m and that his initial attempts to become a peer had been blocked because of a dispute with HMRC. The Mail reported that he had received an accelerated payment notice, a notice designed to force those who have engaged in tax avoidance to pay the tax they sought to avoid.

Peter Cruddas was estimated by the Sunday Times rich list to be worth £750m. The Guardian reports that he lived in the tax haven, Monaco, and commuted to work in the City.

Arron Banks has a network of companies set up in tax havens according to this Guardian report. Concerns about his tax affairs have been raised by Charlie Elphicke MP. And his name appeared in the Panama Papers.

In an interview with the New Statesman he said this:


I read this as him saying he is unembarrassed about seeking to minimise his or his businesses’ tax liabilities through the use of offshore tax havens. Despite this evidence he has threatened to sue me for calling him a tax dodger. In that same New Statesman article he also claimed to have been worth, in 2014, more than £100m.

So all three are or claim to be immensely wealthy. And all three are reported to have engaged in behaviour consistent with a rather unpatriotic disinclination to pay their share to the nation.

So what is the objection to the law?

Yesterday the Telegraph reported Jacob Rees-Moggs’ complaint:


And today it reports Boris Johnson and Michael Gove as attacking HMRC for enforcing that rule.





But as I have shown, HMRC is doing no more than acting as Parliament and the law compel it to.

The sums involved are – for you and I – enormous. Yesterday’s Telegraph reported that the demands were for up to £2m.

Nevertheless, Rees-Mogg, Johnson and Gove are suggesting that the law should be disapplied to give these immensely wealthy men huge bungs; bungs against the will of Parliament; bungs that are unlawful; bungs that would increase the deficit; bungs that would increase the amounts teachers and nurses and bus-drivers will have to pay in tax.

That’s what the leaders of Brexit are saying. That you should fund unlawful bungs of money to immensely wealthy Brexiters. That’s how much they care about normal working people.

That’s Brexit for you.

Uber: HMRC and the Public Accounts Committee

In October, I wrote this post. It made five points.

(1) I explained why I believed Uber was supplying transportation services.

(2) I set out what that meant in tax terms – Uber was liable to pay, but was failing to pay, hundreds of millions of pounds in VAT every year.

(3) I explained that HMRC’s ability to collect that unpaid VAT was time-limited – as time passed, HMRC lost the ability to collect those hundreds of millions of pounds for the rest of us.

(4) I argued that HMRC should raise assessments to protect its position in case the various cases before the courts confirmed Uber was supplying transportation services.

(5) And I said that HMRC’s failure to do so was remarkable – it indicated serious wrongdoing at HMRC.

Points (1) and (4) were, shortly thereafter, put to HMRC by the Public Accounts Committee (see, from Question 88, here). But what did HMRC say by way of response? And does that response hold water?

(1) Is Uber supplying transportation services?

The basis for arguing Uber is liable to VAT is that the economic reality is that it is supplying transportation services as principal not as agent for the drivers.

Explaining why HMRC is not pursuing Uber for VAT, here is what Jon Thompson, Chief Executive and Permanent Secretary of HMRC, said to the Public Accounts Committee:


But as the Employment Appeal Tribunal in the Uber case pointed out:

Which side of the divide an individual falls will inevitably be case- and fact-sensitive. That, indeed, is the message I take from the various “mini-cab” cases I was referred to in the VAT context. Most are first instance decisions and not binding on this Tribunal, but, in any event, what they show is an attempt to determine in each case whether the drivers were providing their services as such to or as part of another entity (the taxi firm) or directly to the passengers as their clients or customers.

(And earlier, at para 81, the Employment Appeal Tribunal had observed that in agent/principal VAT cases involving taxi services “the decisions went both ways.”)

What is remarkable and unique about Uber’s arrangements is the degree of control it exercises over the drivers and the arrangements with customers. These are the factors that led the Employment Tribunal to conclude (and the Employment Appeal Tribunal to agree) that drivers were workers supplying services to Uber, the principal. These are the factors I consider would cause a Tax Tribunal, too, to conclude that Uber was a principal for VAT purposes. In other words, it is clear that there is a line in agent/principal VAT cases involving taxi services and if any case falls on the principal side of the line – and we know that some do – you Uber’s should.

Jim Harra, Second Permanent Secretary to HMRC, went on to make a further point about the Uber Employment Tribunal decision, as it then was. He said:


But this, I am afraid, is simply wrong.

It is true that the Employment Tribunal decision is about worker status. And it is also true that the VAT question is not identical to the worker status question (it may very well be as a matter of law that the threshold for VAT is lower than the threshold whether the drivers are “workers”). But it is quite wrong to say the Uber case is not about principals and agents: if workers are supplying their services to Uber it follows that Uber is not an agent vis-a-vis the customers.

You can see this very clearly from the Employment Appeal Tribunal decision:


(4) Should HMRC make a protective assessment?

The Public Accounts Committee also put to Jim Harra, Second Permanent Secretary to HMRC, that he should raise a protective assessment to protect the position of taxpayers generally whilst the matter was resolved. To this he said:


The power to make protective assessments arises under section 73 of the Value Added Tax Act 1994 “where it appears to the Commissioners that [here, Uber’s VAT returns] are incomplete or incorrect, they may assess the amount of VAT due from him to the best of their judgment…”

But does HMRC really have no power to make a protective assessment where they wish to protect their position whilst they wait and see what the law is? Is Jim Harra right that HMRC can only make an assessment if it believes the sum in that assessment is due and that if this leads to hundreds of millions of pounds of tax being lost then so be it?

This is a striking contention, and one which flies in the face of common sense. Why should the law require that HMRC sit on their hands doing nothing whilst other cases roll through the courts and hundreds of millions of pounds of tax owed to the general body of taxpayers are lost?

It flies in the face of common sense. And it is also, as it seems to me at least, wrong.

When confronted with facts which give rise to two possible tax treaments – X and Y – it is HMRC’s routine practice to make assessments in the alternative: one for X and one for Y. HMRC then argues those assessments in the alternative: it says ‘we think that X is right but if we are wrong then we say the liability is as described in Y’.

This practice has been blessed by the courts on numerous occasions: see, to take an example from the Court of Appeal, Courts plc, approving the decision of the Court of Session in Glasgow which concerned alternative assessments made under section 73. But if Jim Harra is right then the Court of Appeal and Court of Session are wrong: HMRC has no power to make assessment Y because it believes that it is sum X which is due.

Indeed, the Courts plc case itself concerned a protective assessment raised precisely because HMRC was concerned that the slow progress of other litigation jeopardised their ability to raise assessments within a statutory time limit

There is also a profound tension between what Jim Harra told the Public Accounts Committee and HMRC’s own published Litigation and Settlement Strategy which states:


In other words, there are circumstances where HMRC will take a case to litigation even where it believes it is unlikely to succeed.

Summing up, neither of the answers given by HMRC to the questions put by the Public Accounts Committee seem to me to bear examination. They look to be answers driven by a desire to explain away their failure to act. I expect to release, shortly, direct and good quality evidence that is in my possession that HMRC is motivated by improper reasons in failing to act against at least one large multinational tech company.

In the circumstances, I remain of the view that, as I put the matter in my blog post of October:

I can see no good reason why HMRC should adopt this stance. None at all. It is inexplicable to me – unless HMRC’s conduct is motivated by factors otherwise than collecting the tax demanded by the law. I do not know what those factors might be. But this smells very bad.

HMRC said one last thing to the Public Accounts Committee:


Since that oral evidence was given, Uber has lost its appeal against the Employment Tribunal decision. And yesterday it lost the case in the Court of Justice of the European Union that Jim Harra referred to. Both the Employment Appeal Tribunal and the CJEU held that Uber was supplying transportation services.

We must hope that HMRC now takes the steps it has indicated it will to ensure Uber is subject to the same tax law as the rest of us. In the meantime I will continue to pursue my action against Uber and my actions against HMRC (see here and here) to establish Uber’s liability to pay Value Added Tax.

The Lawyer as Political Actor

[Last night I gave the Annual Queen Mary University of London Law and Society Lecture. What follows is the text].

If you’re ever asked to speak about anything – a rare experience for me, I’m much more often asked not to – then it’s a good idea to start by asking yourself why.

There are other organisations in the UK that have a far longer history of engagement in the cause lawyerinh field than I do: the Legal Action Group, the Public Law Project, and Liberty. There are also specialist single issue litigators like Client Earth.

And alongside those practitioner led groups there are those very many organisations who are not focused on legal action but who routinely take legal steps to advance the interests of their client groups. Perhaps the most obvious example of this is trades union: so, a good example of a union that has been active in this sphere and from whom we will hear much more is the Independent Workers Union of Great Britain.

And then there are also those who fund or are funded to provide thought leadership in the field – as commissioners or publishers or writers. An obvious example is The Baring Foundation, which is publishing a series of papers on the Use of the Law by the Voluntary Sector.

I mention all of this for a couple of reasons. One is so that those who came along for a neutral survey of the field shall not leave this lecture theatre wholly disappointed. Another is by way of tacit apology to those who attended a seminar that I spoke at a month or so ago where I omitted to mention others in the field.

For my part, I enjoy the advantages and suffer the consequences of who I am. I came to what I do as a practitioner and the practice of what I do has the benefits of that stance – it’s a very applied sort of science – but also the short perspective of someone who is stuck in the trenches rather than the general surveying the scene from a hilltop. What I have is my own learned experience.

What does that mean for my comments this evening?

Well, I can speak with some authority on how I understand the zeitgeist, and the practice, of what I do. But, at least as I see it, it won’t be a good use of your evening for me to spend it coughing up semi-digested titbits that I’ve stolen from other people’s tables.

Sorry about that metaphor by the way. I’m sure you will have forgotten about it by the time you get to dinner.

So what are the things that mark out my own practice in this space?

I guess there are a few. Politics: the issues I have chosen to engage with have been at the heart of the political debate. Crowdfunding: I have raised well over half a million pounds from, I would guess, tens of thousands of individual donors. And I also want to say something about the Ethical component of the work that I do.

So I begin with politics.

My political engagement in the legal sphere predates Brexit. I started writing about tax avoidance – bringing to a then intensely political sphere the insights of a practitioner – in 2013. There are many privileges that come with being a barrister. And what I was able to do I was only able to do because I was at the Bar.

If you’re in a firm you have to be mindful of broader interests. This is true in a narrow sense.

Let me give you an example. Bill Dodwell, a very well-known and respected tax professional, and a partner at Deloitte, bravely spoke out about the Icebreaker partnership tax avoidance scheme and pointed out – rightly as it transpired – that the scheme was doomed to fail. It then emerged that another partner at Deloitte was acting for Icebreaker and Deloitte, as I understand it, was sued.

But not only a narrow sense. If you work in the field of tax avoidance and you talk about tax avoidance being morally wrong you might lose more clients than you gain. As I saw it, it was up to me to choose to take my own successful and lucrative practice and blow it up. But I might have felt a little dismayed had it been blown up by the guy at the next desk without my permission.

From writing about tax avoidance I was then asked by a campaigning group to help develop a case arising from the HSBC papers. I was asked whether it was possible to construct a judicial review case from HMRC’s actions around the Lichtenstein Disclosure Facility. That was a much criticised amnesty that enabled wealthy tax evaders to escape criminal punishment for tax evasion by paying a sum of money that was in many cases much less than the tax they had evaded.

From constructing a case for a campaigning group it is but a short step to constructing a case for yourself.

The first case I initiated was the case that became Gina Miller’s case. Just a couple of days after the Referendum, and having read what might fairly lay claim to being the most influential legal blog post of all time, by Barber, Hickman and King setting out the idea that (at least on one reading) the Supreme Court adopted in its landmark decision – I crowdfunded initial advice. And then the intervention styled as the “People’s Challenge”.

Since then I have crowdfunded a challenge to what I see as Uber’s VAT dodging – I think they have avoided some £1bn and are avoiding hundreds of millions of pounds more each year into the future. I am the Claimant in that action. More about this later. I have crowdfunded a challenge to the Electoral Commission’s investigation into Vote Leave’s spending returns. We say the Electoral Commission’s investigation applied the wrong test of law and was wholly inadequate on the facts. I am the Claimant in that action. We are about to file proceedings in a case against DExEU and HMT to seek to compel the production of certain internal analyses of the effects of Brexit on sectors of our economy. I am the co-Claimant in that action alongside Molly Scott Cato MEP. And next week I expect to launch further litigation.

These cases are, it need hardly needs to be said, right at the heart of where our politics is. And it may be helpful for me to talk about what that means.

It is, of course, a truism to say that you need to be mindful of the relationship between law and politics.

Of course, the law itself regulates that relationship. Judges can hardly be said to be oblivious to the question where their writ stops and the Executive’s starts. But it regulates it to a different end.

When the law regulates the relationship between law and politics it does so mindful of the proper constitutional division of competencies between judges and the Executive. But when you use the law in an intensely political sphere you have to use it mindful of its political impact. And the question, ‘what is the political impact of using the law in this way’ is a very different question to the question ‘is it constitutionally permissible for me to use it in this way’.

There are some important governance questions arising out of this which I will return to when I get on to crowdfunding. But, for the moment, can I just try and illuminate it by identifying some different reasons why we might use the law in the political sphere.

For myself, I can see four categories of case…

The first is litigation to change the law.

You try and strike down legislation by reference to some higher legal norm. Or you try and assert that the common law is wrong.

A good recent example of this might be the recent Employment Tribunal Fees case.

The second is litigation to compel compliance with the law.

There is a Client Earth case that sought to compel the Government to produce a Plan that complied with the Air Quality Standards Regulations.

The third is litigation to know the law.

Gina Miller’s case – who can trigger Article 50, Parliament or the Executive – might fall into this category.

And the fourth is litigation that pushes issues up the political agenda.

My Uber case is a good case example. The underlying case is very strong. But I recognise that the best way for tax avoidance by US tech companies to be addressed by Government is for HMRC to act. And so I try to raise the prominence of the issue so as to put political pressure on HMRC to act.

To a lawyer there is something of a hierarchy here: changing the law is obviously at the chest-beating, alpha-male end of the legal spectrum. Beyond that, you then have enforcing the law, knowing the law, using the law. But if you look at the examples I have given you will immediately appreciate that their political saliency is a very different thing from that legal hierarchy.

And the more your action is about using the law to advance political ends the further you move from a dimension where legal judgment calls should lie at the heart of your thinking. A small warning: this can be difficult to communicate to lawyers – as a profession we are not overly burdened by concerns about the limits of our intellectual competence. This requires deft handling.

In the States there is a much longer standing tradition of activist or cause lawyering. And there is an enormous literature about the extent to which legal actions, whose very raison d’etre can be to bypass democratic methods of achieving social change, can lack legitimacy. The literature sometimes suggests a happy conspiracy between judges and lawyers to change society in ways that lack a democratic mandate. And which can cause the law to ‘get ahead’ of a political consensus and create an unhelpful democratic pushback.

This is obviously a debate we, in the UK, mustn’t ignore. But nor should we ignore the very different context in which that US debate has arisen.

It arises in the context of a legal system that is more powerful than ours in constraining political action. If you read a biography of Louis Brandeis, perhaps the greatest cause lawyer of them all, you get a sense of laws routinely being struck down because they offend against the constitution. And you really are forced to ask questions about the legitimacy of the role given to judges.

But that’s not a tradition that most of us in the UK would consider we belong to. The political ambition of our legal actors is constrained by the fact that we don’t have a tradition of striking down legislative acts on the basis that they contravene a higher law.

Now, if I was giving a lecture on what good governance of cause lawyering looks like that would lead me on to a further discussion, about what successful use of the law looks like? How do you integrate your campaigning and your litigation? What legacy work you should prepare for and so on? Lisa Vanhala – who has also written for The Baring Foundation – has published a Case Study on this issue funded by the Paul Hamlyn Foundation. For those amongst you who are looking at this from an institutional, governance perspective, that’s a paper well worth reading.

But I, as I say, I am in the trenches. And that’s deliberate.

I want to be where the people are.

My insight – if you’ll forgive me for calling it that – is that the burgeoning interest in the law as a mechanic for achieving social change is very directly related to a growing despondency about the functioning of democracy.

As citizens, we are aware of the need for social change. We are inspired to deliver social change. But we feel a sense of helplessness when confronted with the question, ‘how do we deliver social change?’

Perhaps, in a globalised world, this is inevitable. The forces that have combined to deliver the world we have are incredibly powerful.

But it isn’t good. And litigation provides an answer, to me and I believe to others, to the question ‘what can I do?’

This is – I think – how the socially motivated lawyers amongst us should be thinking about the law – as a transmission mechanism. A way of giving voice to demands for action about the shape of our society.

That notion isn’t, perhaps, as radical as it might sound. A lot of our law is judge made – lawyer made – law. The lines it draws embed quite profound judgments about the nature of our society.

When we compensate those who are the victims of negligence we make an assessment about how society should respond to a world in which actions happen. We say, despite the inevitability of accidents, sometimes people should be compensated and sometimes not. That’s a value judgment made by judges about which different countries take profoundly different approaches.

These value judgements are there to be challenged.

The Good Law Project – through which I now do the work that I do – was my response to a perception that, with a Parliamentary opposition that was unable to put the Government under real pressure and a weakened fourth estate, there was an opportunity to look more to the courts to provide checks and balances to executive power. It looks for cases that touch upon the lives of ordinary working people and which are not being litigated by others in the field. It looks for structural cases, by which I mean not merely cases affecting large numbers of people but cases that affect the way in which the organs of society function.

I’ve mentioned the Uber case, and perhaps it’s the best example.

There is a widespread perception that we in the United Kingdom tolerate US tech companies, in particular, engaging in financially meaningful tax avoidance. We know from academic literature that this perception undermines peoples’ willingness to pay their own taxes: why would you when others won’t?

This all feels desperately unfair. It undermines trust in our institutions – who are they really working for? And in our politicians – all too easily portrayed as overly friendly with big business. And, ultimately, it drives a desire for revolutionary change, and delivers seismic shocks like Trump and Brexit.

In my own field, I believe that perception has, at the very least reasonable, foundation in reality. There is good evidence that large US tech companies pay substantially higher amounts of corporation tax in other EU jurisdictions than they pay here. Those differences cannot be explained by different rates or structures or tax laws or other objective factors of which I am aware. These differences are reported by our national media which, in turn, adds to public distrust in the establishment.

I know that there will be many of you sitting in your seats who will see the intellectual case that I am making but won’t really feel it. It won’t resonate for you. People like us don’t understand how your experience of the establishment in the United Kingdom is conditioned almost entirely by whether you are of it. If it has worked for you, if you have experienced it all your life as reliable and beneficent, then the points I am making will not resonate with you. But there are many who experience the Establishment very differently – they experience it as disengaged and existing for the benefit of others. And in my own sphere I think that experience is justified and I want to articulate that experience for those people. And I want to articulate it for them with the only mechanic I really understand. That feels to me like a moral duty. That’s where I am.

And if you hear that mission – and you ask yourself the question whether that is a political mission or a legal one – well, it’s pretty clear what the answer is.

There are echoes in all of the 1958 quote from Eleanor Roosevelt with which Neil Crowther begins his paper for the Baring Foundation.

“Where, after all, do universal human rights begin? In small places, close to home – so close and so small that they cannot be seen on any maps of the world. Yet they are the world of the individual person; the neighborhood he lives in; the school or college he attends; the factory, farm, or office where he works. Such are the places where every man, woman, and child seeks equal justice, equal opportunity, equal dignity without discrimination.”

Can I move on?

Zeus cast a thunderbolt at me on the day when – a tax QC who has done one legally aided case in his life – I stand here and opine on the effects of legal aid cuts on access to justice. I’m not qualified; it’s not the world I occupy. I have no direct experience of the issues those cuts engage.

But I am in a position to talk about crowdfunding.

Might just be useful for me briefly to run through the process before I talk about the problems.

It looks like this.

I have a few areas of interest I tend to focus on. Alongside Brexit, there is tax, employment rights, intergenerational fairness, welfare law, immigration and housing.

If I find a case in one of those spheres that’s interesting I tend to try and take an informal sounding from a leader in the field at the Bar. The Bar is collegiate and there’s a curiosity about the work I do that means people will take my call.

If the noises are positive, I then discuss with the barrister in question how it would work.

I think it’s important that people are paid for the work that they do. I think that’s right as a general proposition but it can also be important if you want people consistently to deliver high quality work. That having been said, I also think it’s important that work in this political sphere isn’t seen as a feeding trough for lawyers. You have to be responsive to the politics of the situation. I try and balance those two interests by paying Government rates. (How much of a raw deal they represent to the lawyers in question rather depends on their specialisation.) I also explain the vagaries of crowdfunding – that there will be instances where I ask people to do work without the certainty that they will be paid for it. There are times during the process where it is just impossible to ask funders for more money.

If that works for the lawyer I am doing, I usually ask for short form formal advice on prospects. We know that there can be no certainty about outcome. But if you are asking people to dip their hands into their pockets to fund a case you need to be able to justify that decision to yourself – and to them.

Typically I launch a crowdfunding bid after I have received that advice but before we issue proceedings – usually at the letter before action stage. That seems to me to strike a reasonable balance. Earlier and the action is too speculative – later and I am not in a position to issue proceedings when I get a response from the Defendant. That having been said, I am presently personally part-funding a rather important piece of litigation that I don’t want to put into the public domain until we are further down the road.

If I have co-claimants I offer them a personal indemnity against adverse costs. I do that for a number of reasons. Generally I am wealthier than they are. And it is also true that, usually, I have asked them to be a co-claimant and it is easier to persuade people if they know they are not bearing financial risk. But more important than either of those two factors is that I understand the risks better than they do. In those circumstances, it seems wrong to me that they should bear those risks.

There are lots of different views about how much you should crowdfund. Lots of people try and raise very substantial amounts of money at the outset, which is typically when interest is high. So you get never-ending stretch targets. I understand the temptation to do that but there are a number of factors which can argue compellingly against that course of action.

First, reputationally, it’s quite difficult to return money to people. And if the litigation doesn’t progress as you would like, it can be quite awkward if you have to tell people both that you are ditching the case and that you can’t return their money. Second, I think there is value in putting yourself in a position where you have to make an ongoing case for people to support the litigation. That feels to me like a useful discipline; in governance terms a healthy alignment. And, third, it encourages you to be less disciplined than you might be, if you were spending your own money, about cost control.

It’s a slight side note, but there are several ongoing crowdfunding cases where people are raising for only very vaguely specified pieces of legal work which, because they are only vaguely specified, are of indeterminate value to the funders. I am uncertain about the propriety of those crowdfunding exercises – and the premise upon which the lawyers who are getting paid from their fruits put their names to those exercises.

Leave that aside, even if you have the capacity successfully to crowdfund, there is one very real problem that we are going to have to get to grips with: and that’s adverse costs.

It is possible to seek to raise, by way of crowdfunding, your own costs. Depending on the attractiveness of your ‘pitch’ and the amount you are seeking to raise you may succeed. It is also possible to seek to raise a sum in respect of the other side’s costs. But there are a number of difficulties.

First, you cannot know what the other side will spend and so you do not know what you might need to raise. And, as I’ve already sought to explain, there are difficulties in returning money if you over-raise.

Second, if you don’t raise and find yourself in a world where adverse costs matter it’s generally because you’ve lost or are throwing in the towel. That’s not a world in which it’s terribly easy to raise money: ‘come and rescue me from the consequences of this litigation’ is a difficult pitch.

Third, the other side’s costs might far exceed any sum that you might raise. It’s a matter of public record that, in the Uber litigation, I gave evidence (which Uber did not contradict) that, given Uber’s value is around $70b, and its liability exceeded £1bn, it was perfectly reasonable to anticipate that its costs could top £1m at first instance alone. I could not raise that sum of money.

Fourth, as I understand it, the case law on protective costs orders is not designed for a world of crowdfunding. If you’re raised money from 3400 backers – that was how many contributed to the Uber case – whose resources do you take into account in considering whether a protective costs order is appropriate? The question, who is the claimant, can’t be the answer. It could very easily be any of those 3400.

Crowdfunding can’t replace legal aid. If you have a very strong presence on social media and you are happy to leverage it to raise money Crowdfunding is a powerful tool.  And it’s very useful in governance terms if you want to take cases where the people are: if they won’t fund the case, perhaps you’re not where you should be. But it doesn’t work so well for individual cases. And if it is to stand in for legal aid work in broad public interest cases – like those I pursue – these wrinkles will need to be ironed out. I would very much like Government to do so. But they may need to be addressed in the courts.

Finally, because I want to leave some time for questions, I want to touch briefly on the ethical implications of working in this sphere.

Anyone who has looked at my twitter account will see that I attract at least my fair share of criticism. This was, initially, pretty uncomfortable. Lawyers are not used to it. But I think you have to accept that if you step into a different sphere of activity you have to play by their rules. You can’t insist upon your own. Speaking for myself, I don’t think the fact of being vigorously criticised raises ethical considerations. But it certainly does encourage you to be thoughtful about your behaviour.

What I don’t want to do is use this platform to defend my practice. What I do want to do is try and identify a couple of issues where, I have felt that I might have benefitted from some guidance, to help light my way.

Obviously there are questions of political judgment about what cases you take. I have discussed those issues. But they are questions of judgment it seems to me rather than ethics. If you get them wrong, people might be entitled to describe you as stupid. But, without more, they’re not entitled to describe you as unethical.

However, there are obvious ethical considerations for any lawyer who asks people to fund a case. And it goes without saying that that is especially true if you are one of Her Majesty’s Counsel. Whatever language you use there are, it seems to me, embedded representations to people who may not be sophisticated in the very fact of who it is who is asking for money. These are ethical and they are reputational and, I think, you have to be mindful of both.

And I think the same is true if you are a lawyer who is the beneficiary of a crowdfunding exercise. I think you have to engage rather more actively than you might presently do if you have a ‘normal’ client. There is an interesting question for a trust lawyer about who owns crowdfunded monies. But fundamentally, whatever its legal status, it needs to be carefully stewarded, as if you owned it. And that is difficult if it isn’t (meaningfully) the steward’s money.

There are certainly opportunities for abuse in cases where the work is open ended, the issue is one of profound public concern and you have an unsophisticated ‘client’ promoting the case who is not spending his or her own money: ‘do you care about this? Give money to be spend on this vaguely defined legal stuff.’ You, the lawyer, can find yourself (in effect) as both client and lawyer spending or earning unowned money. That feels uncomfortable to me.

The only other point I want to mention is a longstanding and familiar debate around judicial activism. That is an important debate. And the closer you sail to the political wind the more obvious is the need to have regard to where the line is drawn. The rule of law is both bulwark against public opinion and contingent upon public opinion.

My reading of the decision of the High Court and the Supreme Court in Gina Miller’s case is that it was acutely conscious of both of those aspects of the rule of law. I think there are things that it didn’t do that it should have done and would have done had it felt the rule of law was less imperilled by public opinion.

Thank you.


Is tax avoidance like hardcore pornography?

[This piece was first published on FT Alphaville in June 2016]

In Les Amants, Jeanne Moreau is married to a newspaper magnate with little time for his younger wife. One day her car breaks down and she accepts a lift from a younger man…

The 1958 film won for its director the Special Jury Prize in Cannes. To the rest of us it gave a splendid tagline: “This was her moment! And nothing else mattered” and a rather less glorious definition of “hardcore pornography” as a result of its risqué scenes.

Here’s Supreme Court Judge Potter Stewart in Jacobellis v Ohio, a case that arose when the state of Ohio tried (and ultimately failed) to ban Les Amants on the grounds that it was obscene:

“I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description. And perhaps I could never succeed in intelligibly doing so. But I know it when I see it.”

Tax avoidance is a bit like hardcore pornography. To ban it you first have to overcome a tough definitional problem: what is it?

Of course, it’s not all bad. Some behaviour that resembles tax avoidance can serve a useful purpose. We use tax breaks to encourage ‘good’ behaviour, like saving for our old age. Pension saving reduces our tax bill but it isn’t tax avoidance in any meaningful sense.

But move outside this narrow category and things get very thorny very quickly.

Take the Cameron family inheritance tax planning.

UK tax law says you can pass anything to your spouse free of inheritance tax. Gifts on death to almost anyone else and with a value higher than £325,000 would incur tax. But gifts made whilst you’re still alive, which you outlive by seven years, are free of tax.

When Ian Cameron died, David Cameron received £300,000 in his father’s will. The rest went to his mother tax free. She then gifted the Prime Minister a further £200,000.

Was this tax avoidance?

Before answering that question, let’s take a look at another piece of purported avoidance much discussed in recent weeks.

The best way to think about charitable tax relief is a kind of matched giving scheme under which the State adds a bonus to gifts made by taxpayers to charities. But only gifts in cash: there’s a rule that says gifts of goods don’t attract the bonus.

If you’re a charity operating a string of shops re-selling donated goods that limitation is unhelpful. It reduces the value of those donations by the value of the bonus. But what if the taxpayer appoints you, the charity, as her agent to sell the goods for her and then makes a gift to you of the proceeds? Then the gift is in cash.

A number of charities operate this arrangement. One of them is Oxfam, which has been very vocal in campaigning against tax avoidance. Because of its campaigning position, Oxfam’s arrangements have understandably drawn comment from the likes of the Institute for Economic Affairs, a right-wing think tank.

But is it tax avoidance?

Oxfam’s defence, in essence, is that its arrangements work. But that arrangements “work” isn’t the sword to slice through the Gordian Knot. At a technical level, all tax avoidance works. If it didn’t work, it wouldn’t avoid tax. And nor does it help that HMRC agrees that it works. Again, either explicitly or tacitly, every transaction that successfully avoids tax is agreed by HMRC to work.

So what is the touchstone?

Like “hardcore pornography” the problem we’re trying to resolve is, ultimately, a definitional one. What is the class of transaction we want to ban?

Typically we try to resolve this question by looking at the language the draftsman of the statutory provision has used. “He’s imposed a low tax charge on this thing,” we reason, “but did he really mean to?” The problem with this approach is that it involves an attempt to derive from his language an intention that can’t really be found in it. If the intention was clearly expressed, the scheme wouldn’t succeed in avoiding the charge to tax.

But Oxfam and David Cameron stories suggest an alternative. Start with the facts: what’s the real transaction? Does it attract a higher tax charge?

In the case of Oxfam, the answer is straightforward. Oxfam doesn’t market itself as a broker of second hand clothes. And few who have clothes to sell go to Oxfam to resell their clothes. (Not least because Oxfam pays you in nectar points: 2 points per £1 of clothing sold or about 1% of what you should get as principal.)

Oxfam have taken the real transaction – a donation of clothing – and done the charity shop equivalent of a Double Irish. To get from A to D in a tax efficient manner they’ve walked round three sides of a square. That looks to me like tax avoidance.

But what about David Cameron: what’s the real transaction? Here the analysis is less straightforward.

And it boils down to this. What do we mean when we say a transaction is “tax avoidance”?

If we’re attempting a moral judgment, we look into the minds of the actors. Was the £200,000 gift deliberately routed via the Prime Minister’s mother in order to avoid £80,000 that would otherwise have been payable? If, on the other hand, we’re attempting a technical description of a class of transaction that avoids tax it might be sufficient for us to ask whether the real source of the £200,000 was his father’s estate.

It’s a bold tax lawyer who passes moral judgments. But on the technical question, I was struck at the time, by Number 10’s description of the £200,000 as a payment to “equalise” that which had passed from Ian Cameron to his children. That description seemed to me to source the money to the estate of father. If that were right, the real transaction would not only include the £300,000 the Prime Minister received in the will but also the £200,000 gifted by his mother.

And, to go back to Potter Stewart’s language, you might have the beginning of an intelligible definition of a tax avoidance transaction: one where the natural transaction attracts a higher charge to tax.

The public agrees – we can’t be kept in the dark

Avaaz, to whom I am grateful, commissioned ICM to ask the following:

“The government has undertaken studies about the impact of Brexit on the UK on a range of areas from food prices to ensuring the NHS has enough nurses, but has said that they will not publish the results. Do you think that the government should or should not make the results of these studies publicly available?”

They have given me permission to publish the answer.


83% of the public (sample of 2,057) say the government should make the studies public; 9% say should not and 8% don’t know.

The full polling can be read here.

These studies cover the entirety of the traded economy. What the polling shows is that as a country we are united in wanting the Government to tell us what it knows about what Brexit means for us. Although Government has now said that “information will be forthcoming,” concerns remain about when it will be forthcoming – and what will be forthcoming.

But the public agrees – we can’t be kept in the dark.

Separately, the Good Law Project which I direct and Molly Scott Cato, MEP, have written to DExEU threatening to sue unless Government releases both (1) the secret Brexit studies prepared by DExEU and (2) an unpublished Treasury analysis comparing the economic benefits of future FTAs with the economic cost of leaving the customs union (described by Charles Grant here).

We will be making an announcement on Monday as to what steps we will take in that litigation following the Government’s announcement.

Electoral Commission sued in High Court over EU Referendum

What follows is the text of a Press Release issued last night.


The Good Law Project has initiated proceedings in the High Court to establish whether the Electoral Commission failed in its duty to uphold UK election law during the EU Referendum. The Good Law Project is asking the Court to find that the Electoral Commission was wrong to clear overspending by the official Vote Leave campaign.

The case concerns a donation of £625,000 apparently made by Vote Leave to one of its “outreach groups” in the days before the Referendum vote. If that donation was included in Vote Leave’s spending return, Vote Leave would have overspent by almost 10% and would have committed a criminal offence.

If the action succeeds the Electoral Commission will be forced to reopen its investigation. And it is very likely that either a public or private prosecution of Vote Leave will follow.

The Electoral Commission has until 13 November to respond. The Good Law Project has asked for a full hearing before the end of the calendar year.

Jo Maugham QC, Founder and Director of the Good Law Project, said:

“If our democracy is to function properly the Electoral Commission must do its job carefully and diligently. I cannot see how any public body looking at these facts and taking the law into account could conclude that Vote Leave had not overspent.”

The Claim Form filed before the High Court can be seen here and the supporting witness statement here.  The Good Law Project’s letter before action can be seen here and the Defendant’s response can be seen here.

The costs of the case are funded by an ongoing Crowd Funding campaign which has so far raised over £45,000 and can be seen here.

Something is very wrong at HMRC

Assume you are a taxpayer who has been underpaying tax for years. The law allows HMRC to collect some of that tax. But it also imposes limits on how far into the past HMRC can go. Underpayments further into the past than the law permits cannot be collected: the taxpayer will get away with having underpaid tax.

What are those time limits? Well, ignoring instances where the taxpayer has been dishonest, they are, in the case of VAT, a maximum of four years – but they may be as few as two.

The formal mechanic by which HMRC collects underpaid tax is an ‘assessment’. And because of the time limits, when HMRC discovers a potential underpayment by a taxpayer going back into the past, its practice is to raise an assessment to protect its position. That way, if the potential underpayment does turn out to be an actual underpayment the taxpayer doesn’t get away with its underpayment of tax.

Raising a protective assessment doesn’t impose any obligation on HMRC to collect the tax. Nor does it impose an obligation on the taxpayer to pay it. It’s a protective or precautionary step – simple good practice – to look after the position of taxpayers generally: your position and my position.


An Employment Tribunal has decided that Uber is supplying transportation services. The consequence of that decision is that Uber should be charging VAT to customers and paying it to HMRC. And that will be true not just now but for the whole period for which Uber has operated in the UK, a period of longer than four years. 

An Advocate General at the European Court of Justice has also said Uber is supplying transportation services. And I think those decisions are right. And I am a QC specialising in tax, so this is a view I am entitled to hold. I have also taken formal advice from another QC who specialises in VAT.

If we are right – QC, Employment Tribunal, Advocate General – Uber’s VAT liability could very easily exceed £200 million a year. 

It is, of course, possible however unlikely that we are all wrong. Uber’s appeal against the Employment Tribunal could succeed. The Court might not follow its Advocate General. QCs are not always right. 

So what should HMRC do in this situation? If you read the first part of this blog post, you won’t find that a difficult question to answer. It should raise protective assessments before the sands of time run out. So as to protect its ability to collect from Uber the VAT that the courts presently suggest Uber must pay.

If we are all wrong, HMRC can abandon those assessments. But if we are right, raising those assessments will mean that Uber does not get away with it. And you and I do not miss out on hundreds of millions of pounds of vitally needed funding for public services. 

But by failing to raise protective assessments, HMRC guarantees Uber gets away with it. Even if any remaining doubt about Uber’s VAT liability disappears, HMRC will be unable to collect those hundreds of millions of pounds.

Uber says that HMRC has not raised a protective assessment. If Uber is telling the truth – and it has made a sworn witness statement to similar effect – then HMRC’s conduct is completely inexplicable. HMRC is simply throwing away, and with no good reason, the chance to collect from Uber hundreds of millions of pounds.

I can see no good reason why HMRC should adopt this stance. None at all. It is inexplicable to me – unless HMRC’s conduct is motivated by factors otherwise than collecting the tax demanded by the law. I do not know what those factors might be. But this smells very bad.