UK: Court of appeal unanimously rejects Reed Employment Ltd\’s appeal relating to unjust enrichment
In Reed Employment Ltd Reed, the Court of Appeal has unanimously ruled that the 2005 amendments to the UK’s law on unjust enrichment which equalised the treatment between payment and repayment traders did not infringe the EU principles of equal treatment, fiscal neutrality and effectiveness. In this long running case, Reed had originally argued that the claim it submitted in 2009 was an amendment to a previous claim submitted before 2005. Unfortunately, both the First-tier and the Upper Tribunal dismissed that argument. The claim submitted in 2009 was a fresh claim and, as a consequence, the unjust enrichment defence was available to HMRC.In the Court of Appeal, Reed abandoned that argument but claimed that the effect of the 2005 amendment was to treat the later claim differently to the earlier claim even though the period covered by the claims were the same. According to Reed, this different treatment offended the above EU principles. Unfortunately, the Court of Appeal rejected that view. The previous cases of Weber’s Wine World and Marks & Spencer confirm that Member States are entitled to introduce new laws having retrospective effect even where this has the effect of treating separate claims for the same period differently. The important factor for unjust enrichment purposes is the date that any claim is paid – not the date the claim was made or the period it covers. The Court was satisfied that EU law on the issue was clear enough for it to refuse to submit questions to the Court of Justice.Comment – this is a major, but, perhaps, not unexpected blow for Reed. Given the unanimous verdict from the Court of Appeal, it may be difficult to obtain leave to appeal the matter further to the Supreme Court. However, given the value of Reed’s claims circa £139M, a further hearing cannot be ruled out.