£656,370 – legal cost of failed tax relief move
Tuesday 10th July 2012, 3:00PM BST.
Economic Development Minister Alan Maclean
THE legal bill for the States’ failed bid to overturn the UK’s decision to scrap a tax relief for Jersey’s fulfilment industry is nearly double the original estimate and nearly nine times the sum Guernsey paid.
Earlier this year the Jersey and Guernsey States appealed to the High Court to overturn the UK government’s decision to end the controversial Low-Value Consignment Relief, which allowed Channel Islands firms to export cheap goods to the UK VAT-free. But the High Court ruled against the islands.
It has now been revealed that Jersey’s legal costs stand at £656,370 – well above the original estimate of £360,000. And the bill will increase further when the UK government submits a claim for its costs, which are to be paid by the two islands. Jersey’s costs are also significantly higher than Guernsey, which has spent just £75,000.
Economic Development Minister Alan Maclean said that costs increased after the States’ legal team decided to compile extra witness statements ahead of the case.
Senator Maclean said: ‘The initial estimate was an assessment by the Law Officers department. However, since then, there was significant additional work which had to be undertaken in preparing for the case, and this led to an increase in costs.’
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Double the original estimate ??? now there’s a big surprise
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Well, that’s shown Guernsey how it should be done!
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States get taken for suckers again?
Never mind, it’s not their money!
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Good old “Clanger Maclean!
Doesn’t matter …. it’s only taxpayers money – plenty more where that came from !
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So that’s the cost of around 20 or so nurses for a year, or maybe 5 nurses for 4 years.
How about another 20 teachers ?
How dare you waste our money in this manner !!
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spin,spin & more spin,if we all ran our businesses like this there would be even more unemployment here.
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& Take another one Jersey Tax payers !
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That’s ridiculous – you could employ 3 managers at the Post Office for that amount, or pay off 1 civil servant. Get your priorities right Alan (is that the Town Park file under your arm?).
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Dig deep for the government you deserve.
Were you asking for it, or were you under undetected influence ?
Pregnant pause.
It was all the UK’s fault etc etc etc… yawn
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That said it all. It s about time they do a reality check and come back on planet earth. Tired of seeing money being wasted. I am moving to GSY before they decide to build the Police station and the hospital. It was going to cost 100 millions but it ended costing 350 millions. We forgot to build a maternity unit and a car park for the coppers cars. And we are also missing 300K…
Morons…
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I said it at the time that it was doomed to failure and now it’s proven to be a twice as expensive failure as first thought.
An expensive PR exercise that I hope people haven’t fallen for.
http://sammezec.blogspot.co.uk/2012/03/lvcr-conspiracy.html
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Maybe next time the States should avoid using a local lawyer then Sam.
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That wasn’t my point. My point was that they shouldn’t have used any lawyer at all. They were never going to win.
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Sam
I’ll agree that trying to fight this case was a stretch but not as bigger stretch as calling it a diversion conspiracy.
More the likely it was pursued because LVCR was lucrative to some very large businesses with lobbying power based on the number of people it employed and the fact the industry’s ROI for Jersey was a no brainer compared to other industries in our economy. You’d rather believe the fantasy and dubiously link some loose cannon throw away independent comments and suggest that this was a smoke screen rather than the idea that Maclean was doing what would simply be expected of a Minister for the Islands economic development i.e. protecting its economy?
That makes me laugh. But as a member of the public it also insults me because you suggest that I am so easily distracted from the real issues.
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If your offence is genuine, I’d urge you to read my post again for all I did was say the politicians were trying to use a smokescreen. I never said anything about whether they had been successful, other than my hope that it wasn’t. I’d never insinuated people like you had actually fallen for it, so to say I did suggest that is unfair.
I’m sure the leaders of the industry (as well as the ordinary person in Jersey) should always expect the Minister to do what he/she can to protect an industry in Jersey. But since the LVCR challenge was doomed to begin with, the Minister was not protecting the industry. He would have been much better dedicating his time and resources to helping the industry cope with the change in the law, not wasting public money and his time sat in a courtroom to hear an entirely predictable judgement. That would have genuinely been protecting the industry and I’m annoyed that he hasn’t done it.
You can be patronising about it if you like, but that’s a totally legitimate point of view. Perhaps using the word “conspiracy” was unwise on my part, but politicians using smokescreens is nothing unusual and certainly not a fantasy. If you want to see examples of it, pick up any national newspaper.
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No don’t worry my offence was just rhetorical to assist my point. But it seems (by total fluke) it has extracted your feelings on the success of the alleged smokescreen. If you’re not suggesting people would fall for it then surely it is a pretty weak hypothesis (note I refrained from using “conspiracy”) of yours? I mean why would the government bother if it thought someone with average intelligence and awareness wouldn’t fall for it?
Again far more likely they thought they had a chance and based on the chance v cost it was worth pursuing, although had they realised how much the final bill would be they probably wouldn’t have! But even if you are right and the case was totally pointless I think the decision to pursue it is more likely due to incompetence rather than some conspiracy.
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I certainly won’t disagree that there is definitely an element of incompetence in there somewhere haha
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Think of a number….double it….then treble it…add on a couple of bottles of Dom Perrignon,and a fierce lunch or two…and there you have it….I sincerely hope those responsible for public spending….Oh Hang on a minute..Chris Swinson.is not there…..’Someone ‘ ought to get this figure challenged formally…..nine times more…what abouit that Lawyer here who does just that give him a call.on our behalf you understand as it’s us that picks up the bill.easy to spend someone elses dosh again Clanger.
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States of Jersey over budget – who would have thought it?!!
It has been an expensive week £75k to a millionaire’s rugby club, £1m or so to sacked civil servants and now this.
Is there no end to their desire to spend tax payer’s hard earned cash?
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As usual only one winner ,the lawyers
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I think that our 400GBP an hour lawyers must have known this idea would never have worked and were just in it for the money – and didn’t they do well as Bruce would say. Unlike them we have all lost a lot of our tax payers money YET AGAIN!
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Why weren’t they employed on a ‘no win no fee’ basis? No takers? Quelle surprise.
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This is about par for the course when looking at the estimates of cost presented by Jersey’s polititions. Think double and add some.I wonder if it works the other way when Mr MaClean starts shouting about the extra revenue Jersey will rake in when all his new business with China and Israel is set up?
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Time to rename him the Economic Disaster Minister. The man’s a total disaster. When the vote comes about Plemont, make sure someone keeps a hold on his ring file.
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If they thought they were going to win they were dreaming and if they thought it was going to be cheap they were dreaming, Dream on and proberly this is not the true figure.
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If ever there is an industry that has an inflated idea of itself, it is the legal industry.
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Its not an industry, its a profession. And it did a good job here, generating income from a foolish client with more money than sense. And I suppose we should accept our share of responsibility for being the idiots that elected the numpties that chose a fool to run the economy!
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Too true. Jersey, like a pack of lemmings is engaged in a race to the bottom. We are all to blame, but some more than others
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We may as well get rid of our election process. Let’s just pay a visit to Monkey World in Dorset and grab a few chimps.
They’ll do a better job!
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Why does anyone think lawyers are worth £400 an hour.
I think it is outrageous and they should be named and shamed.
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£400 an hour is cheap; more like talking £500 – £750 but at least they are transparent. I guess the only people who always moan about Lawyers fees are those who lose cases they never had any chance of winning in the first place……….
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Err, that’s 1641hrs at that rate. So they are saying they have spent over 68 FULL days working on this? – Will the invoice be published? – I fear not -
Will be interesting to see how much the UK lot put forward as their costs.
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Doesn’t matter why. In the free world people are entitled to charge whateevr they want, presumably at a level that another person thinks they are worth.
I’m guessing you are giving no credit to the years of hard work, exams and legal experience that is required before the actual hour of work is performed by the individual lawyer.
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Free world? Where do you get that from? It doesn’t exist except in your mind.
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Sitting outside your cafe chain-smoking and banging on nonsensically about transparency – now THAT’s valuable endeavour. And no training required!
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Ha ha i have to laugh what a complete and total show of incompetence and a sheer disregard for our tax money again i say to you sir hope you had another nice little jolly good on you if you can get away with ut then good on you!!
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Unfortunately it’s not really a laughing matter for the ordinary working man.
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Of course it is because yourself and all those complain choose not to do anything about it i repeat you choose not to do anything about it…just complain and it makes me laugh!!
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I do always wonder how much time gets ‘dumped’ by outside employees when doing work, in this case legal representation, for the States. Who checks? Licence to print money….
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In my opinion those who sanctioned this should pay for it. I said it would be a waste of time to appeal against the shutting down of LVCR and yet again I have been proved right.
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They have no shame, other wise they would not charge so much??
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They are just riding the gravy train!
More profits than the Le Pas Holdings disaster.
A final complete bill for that legal disaster has never been accounted for to my knowledge.
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We all said it before they went to court…it will cost more than estimated.
What i can not understand is how Guernsey got away with a stated £75,000? Why did Jersey not do the same?
Also lets not forget that the UK are to claim back their costs!
How is it a Minister can spend all this money and yet the States are threatening jobs and putting up in direct taxes?
The way i see it Jersey is becoming a modern day Robin Hood….. Rob the Poor to give to the Rich.
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When this idea of running a legal campaign against the UK it was touted that the costs would be borne by industry and not the tax payer.
Did I miss read the article or has something changed since? Either way, I said at the time that the only winners would be the legal teams. If only I cold predict lottery numbers….
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Gino (20) If anyone is to blame it’s the givers, not the takers. I’d be happy with £400 an hour if it was offered to me. Wouldn’t you be too ?
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That is well over a million gone.
We have to pay the UK’s costs and I bet their lwayers will not have stinted themselves either!
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Yet another way off the mark initial legal cost assessment by the Law Officers Department. Who on earth is engaged in getting together these figures? One would think they’d have learnt by their ever so many flawed assessments of the past. Interesting to know what checks and balances were involved as these costs escalated….or should I say cheques and bank balances!
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Somebody must think we are all stupid!
£650,000 and no one in the states is questioning this! I know theres lawyers on this island who charge alot but even they max out at around £700ph so we are talking lawyers fees for 100,000 hours of work to fight LVCR!
Really!?!?!?!
that works out at 200 lawyers full time for 3 months. come onn guys question the bill and ask to see there time records because Man your getting screwed over!
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Think you need to check your maths there
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or even just his arithmetic!
I say ‘his’ but “OMG” does tend to be a girly thing.
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I wonder what the benefit was of only releasing this figure now? Political spin, slow news day or the JEP only report this when asked to do so by their States of Jersey friends. This was reported in the Guernsey Press over a week ago…
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What do you expect when Jersey has the most expensive lawyers in the world ?
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1. completely untrue – it doesn’t
2. this case was tried before the English courts by English lawyers, so the price of Jersey lawyers is completely irrelevant here
Jersey commercial lawyers aren’t the cheapest but that’s because they work on complex, high value international transactions alongside leading lawyers in places like New York and London who ARE the most expensive lawyers in the world.
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To me this was always a PR exercise – no expertise was needed to determine that the UK was well within its rights (citizen’s advice could have proffered this information). No what the appeal was about was the COM showing that it cared and was not neglecting its responsibilities.
In my opinion what should have happened was clear honesty by the COM and a commitment to invest half a million immediately into job creation – not waste value money on lawyers.
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So thats 10 times more than Guernsey paid? and we still haven’t had the final bill for the defendants costs….
This was pure folly by the COM from the outset and still they went ahead with it.
Did they really think they would win?
Did the lawyers advise them they would win?
Time our lawyers all went on a no win no fee basis.. sorry that would of course upset all those prominent figures behind the scenes who are partners in law firms.
Just like the construction industry, house prices and rental prices everything on this island is done for the benefit of the haves.. Nepotism pure and simple.
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And throughout all of these many debacles we receive absolutely no comment or input from our leader, Ian Gorst- the ” silent one “. Chief Minister ? Pah !
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So, double the estimate, Eight times as much as Guernsey and the UK’s costs have still to be paid as well.
I said at the time that this would be a complete waste of money.
At the time, it was reported that the fulfillment industry would make a contribution to the costs. Did they cough up any money?
Agree with no 16.
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A VERY VALID point here. Some of the fulfilment industries had grown into hugely profitable companies. They were the ones who had the most to gain from this legal challenge, so what have they contributed to this enormous bill that was run up on their behalf? Senator Maclean has an ABSOLUTE DUTY to explain how much the industry itself contributed to the costs. “Private funding initiative” is one of those overused phrases that politicians love to spout. How strange then, that in this particular case, the phrase is conspicuously absent.
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I think Jersey has MUG written all over it!! How in earth canGuernsey have paid 75k and we have paid 656k!!! I think the public need an enquiry about everything that the states spend these days because they are constantly spending, misplacing, misjudging and losing finances! It is not encouraging to the public who have worked hard for there money only to have it thrown away by the states!! Someone seriously needs to look into this constant mishaps and mistakes because personally i think someone (or a few someones in power) are taking the Michael out of us all!!!
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People in authority should be held responsible over this fiasco.
Jersey is a laughing stock yet another foul up. I have no doubt people elsewhere will be laughing their heads off.
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I hate to put a spoke in the wheels, but as this was a matter of UK Law determined in the UK High Court most of the legal fees will have been paid to UK lawyers.
Jersey lawyers are one of the Island’s greatest assets: most of their clients are overseas and so they generate a huge amount of foreign earnings, which is exactly what an Island needs. But I guess prejudice trumps truth on these boards.
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Time for McLean to go he has wasted more than a million pounds of our money recently not good enough.
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Clanger Maclean at it again…so frivolous with OUR money….have we copped on yet….he has no grasp or control that is demonstrable….£950 thousand disappeared where a cafe should have been in the new park…another ringbinder trick or what..but no explanation….Guernsey 75k to challenge the fulfillment deal…Jersey ..over £SIX HUNDRED AND FIFTY THOUSAND of your hard earned Tax quids….I have watched ordinary people in the Tax office whince as they hand over their cash…and leave looking defeated..and broke…yet this guy allows the sort of performance that would bring tears to a glass eye to happen….he says we needed more witness reports….what .? over half a million quids worth..who is he kidding he should have been ” ON ” those lawyers making sure on our behalf they they were not just having a field day with an open checque book…it is sickening and he has now proved unequivocally by his many blunders that he is out of his depth undisciplined and should go and go now.
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What price justice?
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Taxpayers deserve everything you get.
Ring your deputy and tell them that you are fed up to the back teeth with sort of gross misconduct of our money.
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The Fulfillment Industry should contribute towards these outrageous costs, they have made fortunes.
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Can anyone tell me how much has been ‘lost’ in the last twelve months due to poor decision making by the states?
I believe an invoice was suggested at earlier, surely this a good idea, we can then understand what services were given.
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I am not a lawyer but we were never going to win this on a point of discrimination !
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The reason why Jersey paid so much is because Guernsey had legal advice that the case was a no-hoper. That advice cost £75k. Jersey begged Guernsey not to back out and Guernsey said “okay, but we’re not going to pay any more”.
The real issue here is why Jersey pursued a claim that every lawyer in the Island and outside thought was a no-hoper.
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