Hannah, R (On the Application Of) v The Taxation Disciplinary Board Ltd

A privately constituted professional disciplinary body is amenable to judicial review only where its functions have a sufficient public character, such as being woven into governmental regulation or exercising governmental power. Voluntary contractual regulation of members, without statutory underpinning and without compulsory membership, will ordinarily remain a private-law matter.

A preliminary referral of a complaint for investigation does not ordinarily require prior representations where it makes no finding of breach, imposes no sanction, and is followed by fair opportunities to respond. Under Senior Courts Act 1981, s 31(2A), relief may also be refused where it is highly likely that the outcome would not have been substantially different.

The claimant, a chartered tax adviser and member of the Chartered Institute of Taxation, sought judicial review of the Institute’s decision to refer a complaint concerning Stamp Duty Land Tax advice to the Taxation Disciplinary Board.

The claim raised three issues: whether the Institute’s referral function was amenable to judicial review; whether procedural fairness required the claimant to be heard before referral; and whether relief should be refused under s 31(2A) of the Senior Courts Act 1981.

1. Claim dismissed. The Institute’s decision to refer the complaint was not amenable to judicial review.
2. The relevant principles were those in R v Panel on Take-overs and Mergers, ex parte Datafin plc [1987] QB 815. The court must examine both the source and nature of the power, asking whether the function is governmental or has been woven into a system of governmental regulation.
3. The Institute’s relationship with its members, the Taxation Disciplinary Scheme, and the Taxation Disciplinary Board was contractual. The scheme was voluntary, could be terminated, and applied only to members of participating professional bodies. Tax advisers were not required to belong to such a body. The Institute did not itself discipline members, and the Board could not regulate the tax-advice sector generally. Public benefits and references by HMRC to professional bodies did not convert the scheme into governmental regulation.
4. Alternatively, even if the referral function were reviewable, fairness did not require prior representations. Referral was merely an initial procedural step for independent investigation. It did not determine that the professional standard had been breached, establish a prima facie case, or impose a sanction. The disciplinary rules provided opportunities to make representations at the first and second stages of the process.
5. Alternatively, relief would have been refused under s 31(2A) of the Senior Courts Act 1981. The court concluded that it was highly likely that the complaint would still have been referred if the claimant had been heard. The court was not deciding the underlying merits of the competing Stamp Duty Land Tax arguments, but considered the issue properly referable to the disciplinary body.