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HMRC internal manual

Appeals reviews and tribunals guidance

First - tier and Upper Tribunals: Preparing for tribunal: Groups of related cases: Lead cases - Rule 5 or Rule 18?

Both Rule 18 and Rule 5(3)(b) refer to treating or specifying one or more cases as a lead case with other cases stayed behind them.

If Rule 18 applies, all the other cases are bound by the decision in the lead case (unless they apply for a direction under Rule 18(4), see ARTG8554 that the decision is not binding on them).

If Rule 5 applies the other parties are not bound by the decision in the lead case.

The tribunals caseworker, see ARTG8400 should use their judgement when deciding whether to apply for a Rule 5(3)(b) direction or a Rule 18 direction. In doing so, they should consider the advantages and disadvantages of both:

Rule 5 -

This direction does not bind related cases, Therefore it does not provide the parties with certainty as to the outcome of their case. Further hearings may be necessary for the related cases if they are not on all fours with the lead case.

Rule 18 -

As a Rule 18 direction is binding on all the related cases, Rule 18 appears to provide more certainty than Rule 5. It moves the onus in proving that a decision applies to the related cases from HMRC to the appellant. Appellants in related cases would have to persuade a tribunal (Rule 18(4) - ARTG8554) that their case could be distinguished from the lead case in order for the decision in the lead case not to be binding. This approach may be attractive, particularly where there are very large numbers of related cases. Promoters of large avoidance schemes may also prefer this option for the same reason. But see also ARTG9060 about further appeals in groups of cases.

When it is clear that a number of related cases are likely to be litigated, the decision maker should inform the technical/policy specialist; the specialist will involve Solicitor’s Office in the litigation if appropriate.