Financial Reporting Council Ltd v Frasers Group plc (formerly Sports Direct International plc)

In Financial Reporting Council Ltd v Frasers Group plc (formerly Sports Direct International plc) [2020] EWHC 2607 (Ch) (5 October 2020) the High Court concluded that three VAT planning reports commissioned by Sports Direct were not subject to litigation privilege.

The dispute arose after the FRC issued statutory notices which required Sports Direct to provide certain documents on the basis that they were likely to shed light on an investigation into an audit firm. Sports Direct argued that these documents were covered by litigation privilege.

The documents contained professional advice Sports Direct had taken on how to structure its VAT affairs for its online sales of international goods. The intention of the structuring was such that VAT was payable in the UK on international sales rather than in the customer’s member state. Broadly this was to be achieved by attempting to circumvent distance selling provisions by setting up...