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HMRC internal manual

Compliance Handbook

Litigation and settlement strategy: handling a dispute: working collaboratively

You should always aim to work in a collaborative, non-confrontational way when handling a dispute.

Working collaboratively means that:

  • you should try to avoid a dispute by explaining the risks and how documents and information can address the risk
  • if you recognise that you have a different view from the customer, you should tell the person so that you are both aware that there is a dispute and that it needs to be resolved
  • you should act to resolve the issue and explain how you intend to resolve it.

Collaborative working might include, for example,

  • discussing transactions or issues on a real time basis (pre-transaction or pre-return)
  • holding an open dialogue that sets out the specific task risk identified and avoids unnecessarily wide-ranging opening enquiries
  • early discussion of the disputed issue to understand what relevant facts are needed and which law will apply to those facts
  • agreeing a timetable with milestones and target dates for

    • establishing facts
    • providing information or documentation
    • reviewing documentation
    • reaching decisions
    • testing conclusions
  • providing updates on progress
  • clarifying understanding of relevant facts
  • agreeing the form in which information is to be provided
  • discussing, sharing and testing technical arguments to assess relevant strengths and weaknesses in analysis
  • agreeing the key questions to be answered in order to resolve the dispute
  • exploring possible alternative interpretations of the facts or law
  • working with the person or their agent to agree revised figures or required action.

Even where a dispute seems to have reached an impasse, it may still be possible for you to work with the person or their agent. For example, if a matter is heading towards litigation you can still

  • agree the key question or questions that need to be determined by the tribunal or courts
  • seek to narrow down the points in dispute
  • jointly draft an agreed statement of facts
  • consider alternative dispute resolution (ADR) involving a third party facilitator, see CH280400 
  • be open to discussing the relevance or impact of any new facts that come to light or alternative technical arguments that are identified
  • agree a timetable for the preparatory steps to litigation
  • arrange periodic meetings to discuss the case and give or receive updates on progress.

A collaborative approach may not be possible or appropriate in all cases, see CH40780.