Costs should not be capped

After an investigation into an alleged VAT fraud a restraining order was made against one of the defendants who died in 2006.

In 2002 the Inland Revenue obtained a world freezing order in respect of a trust in Gibraltar of which the deceased was said to be a beneficiary.

The deceased’s sister agreed to represent the deceased’s estate in respect of criminal proceedings instituted by the Revenue.

As her resources were limited it was agreed she would need help with her costs and to this end was allowed to spend sums ‘actually reasonably and properly incurred’ on her legal costs.

She later applied for a variation of the freezing order to allow her legal costs to be paid out of the trust. HMRC agreed to this but said her costs should be capped at £2.5 million.

The High Court ruled that...