11KBW acts in high-profile challenge to FATCA


The High Court has recently handed down judgment in Webster v HMRC [2024] EWHC 530 (KB), a high-profile challenge to UK tax legislation implementing international treaties with the United States of America.

The UK has entered into international agreements with the USA (‘FATCA’) for the automated exchange of taxpayer data, as part of the international fight against tax evasion. Similar regimes have been entered into across the world, including under the auspices of the OECD (the ‘Common Reporting Standard’ or CRS).

Ms Webster (the Claimant) was formerly a US citizen, whose data was transferred between 2016 and 2020 under FATCA. She has brought a data protection claim, alleging that those transfers were unlawful because of differences between UK and US protections applicable to such data, and because the transfer of her data was disproportionate to the aims pursued by FATCA. While, in form, her claim is targeted upon the processing of her own data, its implications are of wide significance: both as to the general lawfulness of the FATCA regime, and potentially for the CRS and other international measures. Ms Webster has stated that she seeks to achieve a result that benefits all those subject to FATCA, and her lawyers have described the claim as part of an “international strategic data protection litigation campaign” aimed at undermining such international measures combatting tax evasion by means of automatic data transfers.

Her claim is of low value in damages terms (capped at £50,000), but her legal fees (which run to many multiples of that sum) are being paid by an undisclosed funder, whose identity has been kept from the Court and even (by her agreement) from Ms Webster herself.

HMRC’s defence of the claim includes an argument that the claim is an abuse of process, as (given inter alia its aims and implications) it should have been bought by way of judicial review. Pursuant to that defence, HMRC has obtained a Court order for disclosure of the funder’s identity, with which Ms Webster has repeatedly refused to comply (see Webster v HMRC [2023] EWHC 2697 (KB); Webster v HMRC [2023] EWHC 2944 (KB)). Faced with the choice between disclosure and the striking out of her claim, Ms Webster opted instead to seek to strike out the abuse of process defence. That application has now been rejected by the High Court in the judgment referred to above.

While a decision on arguability, the Court’s judgment is of considerable interest both to data/tech lawyers and to public lawyers, in its consideration of the application of abuse principles to the boundary between public law and private law in the context of data protection rights.

Julian Milford KC, Rupert Paines, and Katherine Taunton act for HMRC, instructed by George Hobson of HMRC Solicitors’ Office.