Jennifer Webster v The Commissioners for HMRC

The claimant challenged bulk transfers of her UK banking/investment data to the United States under the UK/US FATCA arrangements and alleged breaches of data protection law. She applied to strike out or obtain summary judgment on HMRC's abuse of process defence (which pleaded that the claim was in truth a public law challenge and that anonymous third‑party funding was relevant to that defence) and to unwind disclosure orders requiring disclosure of the funder’s identity.

The court applied the strike‑out and summary judgment tests (CPR 3.4(2)(a) and CPR 24.3) and considered the authorities on procedural exclusivity/abuse of process (including O’Reilly v Mackman and later authorities such as Clark, Johnson and Richards). It held that HMRC’s abuse defence was not hopeless in law: the question whether the private law form of the claimant’s case masked a substantive public law challenge is fact‑sensitive and evaluative and therefore properly for a trial. The court also held that the identity of the funder remained relevant to HMRC’s pleaded abuse defence and that prior disclosure orders should stand. The claimant’s terminating‑ruling application was dismissed.

Background and parties: The claimant, a former US citizen and long‑term UK resident, complained that HMRC transferred her banking and investment data to the US tax authorities in annual bulk exchanges under the UK/US FATCA regime. She alleged breaches of data protection law (under the Data Protection Act 1998, thereafter the Data Protection Act 2018 and the GDPR) including unlawful transfers and disproportionate processing, and claimed a declaration and damages.

Procedural posture: The claim was issued in the Media & Communications List. HMRC pleaded, inter alia, that the claim was an abuse of process because it was in substance a public law challenge to the UK/US IGA and the Order in Council implementing it, and because the litigation was funded by an unidentified third party. There were contested interlocutory orders requiring disclosure of documents relating to funding; the claimant redacted the funder’s identity and resisted disclosure. Earlier interlocutory judgments (Webster v HMRC [2023] EWHC 2697 (KB) and [2023] EWHC 2944 (KB)) resulted in an order for disclosure and a stay of proceedings; the claimant then brought the present application to strike out parts of HMRC’s defence or obtain summary judgment and to unwind disclosure obligations so the case could proceed without revealing the funder.

Relief sought: The claimant sought (a) strike‑out of HMRC’s abuse of process defence (paras 1(1) and 37) under CPR 3.4(2)(a); and/or (b) summary judgment on that defence under CPR 24.3; alternatively, strike‑out/summary judgment confined to the aspects of paragraph 37 relying on anonymous funding; consequentially she sought orders to relieve her of disclosure obligations and to lift the stay.

Issues framed: (i) whether HMRC’s abuse of process defence was so devoid of reasonable grounds (or so fanciful) as to justify strike‑out or summary judgment; (ii) whether funder identity was a relevant and admissible part of HMRC’s abuse case; and (iii) related procedural questions including whether HMRC had waived the right to run the abuse defence or should have pursued a different procedural route.

Court’s reasoning: The court identified and applied the legal tests for strike‑out (certainty of failure) and summary judgment (no real prospect of success and no other compelling reason for trial). It reviewed the authorities on procedural exclusivity and abuse of process (including O’Reilly v Mackman, Clark v University of Lincolnshire, Johnson v Gore Wood, Richards v Worcestershire CC and authorities relied on by the claimant such as R (El‑Gizouli) and R (AAA (Syria))). The judge held that the contested legal point — whether a private law claim may be an abusive vehicle for what is in substance a public law incompatibility challenge — is not a simple pure question of law but a fact‑sensitive, evaluative issue. HMRC’s pleaded case and the litigation history provided more than an arguable legal foundation for an abuse defence and there was sufficient factual material in prospect (including the claimant’s pre‑action position, the declaratory focus of the claim originally pleaded, the late abandonment of the declaration, the funding arrangements and the claimant’s conduct on disclosure) to warrant trial rather than interlocutory termination. The court further concluded that the funder’s identity was relevant to HMRC’s abuse case and could not be severed on the present application. The claimant’s waiver and procedural objections to HMRC’s conduct were considered but were not demonstrably fatal to HMRC’s pleaded defence at this stage.

Outcome: The claimant’s application for strike‑out / summary judgment and consequential relief was dismissed: HMRC’s abuse of process defence and the related disclosure obligations should remain for fuller testing at trial.

The claimant’s application for strike‑out and/or summary judgment of HMRC’s abuse of process defence, and for consequential relief removing disclosure obligations as to the funder’s identity, is dismissed. The court held that HMRC’s abuse defence was not hopeless in law: the issue engages fact‑sensitive and evaluative questions about procedural exclusivity and the true nature of the claim and therefore requires full exploration at trial. The identity of the funder remains relevant to HMRC’s pleaded case and disclosure orders should stand.