Jennifer Webster v The Commissioners for HMRC

Strike-out and summary judgment are exceptional interlocutory remedies. A defence should be struck out only where it is certain to fail, and summary judgment should be refused where the issue has a realistic prospect of success or requires fuller factual investigation.

An abuse-of-process defence alleging that a data protection claim is in substance a public law challenge may raise a fact-sensitive and evaluative question. The court may examine the claim’s substantive reality, litigation history, remedies sought, funding and wider public and private interests. Such an issue will not ordinarily be suitable for summary determination where the legal authorities require contextual reconciliation and the facts remain contestable.

The claimant brought a data protection claim against HMRC concerning the transfer of her banking and investment information to United States tax authorities under the FATCA arrangements. She initially sought declaratory and compliance relief, together with damages, but abandoned the declaration at the hearing and pursued damages alone.

HMRC pleaded that the claim was an abuse of process because it was in substance a public law challenge to the legality of the UK FATCA regime, brought outside judicial review procedure and time limits. HMRC also relied on the claimant’s anonymous litigation funding as part of the alleged abuse.

The claimant applied to strike out that defence or obtain summary judgment on it, and alternatively to remove the allegations concerning funding.

1. Application dismissed. The claimant had not shown that HMRC’s abuse-of-process defence was certain to fail, disclosed no reasonable grounds, or had no realistic prospect of success.
2. Under CPR 3.4(2)(a), strike-out was appropriate only if the pleaded case was bound to fail, assuming the pleaded primary facts to be true and allowing for any curable pleading defect. Under CPR 24.3, summary judgment required the absence of a realistic prospect of success and of any compelling reason for trial. The court must avoid a mini-trial, particularly where further evidence could alter the factual picture.
3. The authorities on procedural exclusivity and abuse of process did not establish a short or definitive point of law. The relevant authorities required contextual reconciliation and were concerned with their particular factual matrices. It was properly arguable that the court could look beyond the formal description of a private law claim and assess whether it was substantively a public law challenge designed to bypass judicial review safeguards.
4. The pleaded case raised substantial factual issues, including the claimant’s litigation objectives, the original judicial review correspondence, the late abandonment of declaratory relief, the relationship between the damages claim and the wider FATCA regime, the claimant’s personal interest, and the litigation history. Those matters required evaluation at trial rather than final determination on the interlocutory material.
5. The identity and nature of the funder were potentially relevant to the true character of the claim, the wider public and private interests engaged, and the interests of justice. The existing disclosure orders concerning the funder could not be collaterally challenged through this application, and the allegations concerning funding were not devoid of reasonable grounds.
6. The court therefore dismissed the application for a terminating ruling. The abuse defence, including the funding issue, was permitted to proceed to trial.