The Low Incomes Tax Reform Group (LITRG) is warning that government plans to reform the judicial review process could prove detrimental for taxpayers looking to challenge HMRC decisions.

In a consultation which closed at the beginning of November, the Ministry of Justice said it wanted to cut down the numbers of 'unmeritorious' judicial reviews and speed up the process. Proposals for reform include 'rebalancing' the system of financial incentives so that those involved have a proportionate interest in the costs of the case, and reforming the test of who is able to bring a judicial review.

In its response the LITRG - an initiative of the Chartered Institute of Taxation (CIOT) - said the planned changes would put judicial reviews 'even further' beyond the reach of the ordinary person when, in its view, they are 'sometimes the only effective remedy available to ordinary taxpayers against HMRC when it acts in such a way as to adversely affect their lives and financial wellbeing.'

LITRG director Robin Williamson said it was concerned about government plans to restrict the bodies which can bring judicial review proceedings to those with a direct and tangible interest in the subject matter, pointing out that organisations such as LITRG had a role to play in representing individuals who cannot easily bring judicial review challenges themselves.

In addition, LITRG says the rebalancing financial incentives are likely to favour the defendant rather than the claimant, unlike the current costs regime which it says achieves a reasonably fair balance between state and citizen. It warns that 'implementing these proposals could well have the effect of putting judicial review well beyond the reach of individuals of modest means who need it the most, and who have good cases to pursue.'

One of LITRG's recommendations is that the lower courts and tribunals should, in certain cases, be empowered to reach decisions on matters involving the application of judicial review principles. It says that if judicial review applications were able to be heard in the First-tier Tribunal, that would both contain costs of the proceedings and enable parties to contest the action in a costs-free environment.

Williamson says this is important given the plans to change the way in which such reviews are financed, noting 'we particularly oppose the withdrawal of protective costs orders from claimants who would not so much benefit if they were successful as suffer a detriment, such as having a tax liability or penalty imposed upon them, or welfare entitlement withdrawn or denied to them, if unsuccessful.'