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This movie-tax lawyer might have found a way to stop Brexit

 Bloomberg News
March 17, 2017
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Jolyon Maugham is hurrying through the streets of west London on his way to a meeting about Britain’s impending departure from the European Union. Even as he sidesteps dawdling tourists and dodges black cabs, Maugham is arguing about Brexit.

“That’s a terrible point and I’m going to demolish it in a blog post later,” he says, when it’s suggested his latest legal action in Dublin might be counterproductive. He then explains, in three stages, exactly why the point is so terrible. “If you don’t like the answer, don’t ask the question,” he shrugs.

A prominent tax lawyer, Maugham has emerged as one of the most potent voices against the U.K.’s looming European exit. Last year, he raised 10,000 pounds ($12,400) in a crowdfunding campaign for a legal challenge over Prime Minister Theresa May’s plan to start the formal process for Brexit, an Article 50 notice, without first holding a vote in Parliament.

That campaign became the People’s Challenge, one of the groups supporting Gina Miller in a case that went all the way to the Supreme Court -- and won. May still plans to trigger Article 50 as soon as this month, after a vote in Parliament went her way earlier this week.

Now Maugham has filed a new legal challenge in Dublin, which he wants to be referred to the European Court of Justice in Luxembourg. He’s seeking a ruling that an Article 50 notice can be revoked if an EU member changes its mind about leaving. An initial hearing is scheduled for as soon as June.

Terrible Mistake

“I think we have made a terrible mistake,” he says a few days later, over dinner at an Indian restaurant in Westminster. “If the electorate comes to think it has made a terrible mistake, it should have the right to reverse it.”

The 45-year-old, who has a large head covered in silver hair, wears stylish black-rimmed glasses and carries a leather satchel that, combined with his impish sense of humor, can give the impression of a student at after-school debating club.

After dinner, he’s due to speak to a left-wing political group, The Young Fabians, at a nearby government building. He allows himself a single beer with his curried octopus starter.

Maugham’s day job is helping clients, mostly wealthy individuals or companies, in their legal disputes with the government. But these days, his real ambitions are elsewhere -- specifically a building a few hundred yards away in Parliament Square.

“If you want to shape the society you live in, ultimately you have to want to be in Parliament,” he says. “That’s where I want to be.”

Unconventional

In many ways, Maugham is a contradictory figure. “People don’t know quite how to place me,” he says. Having reached the top of the legal profession in London with all the wealth and prestige that entails, he’s self-consciously a member of the Metropolitan elite.

At the same time, his background is unconventional, at least for a top lawyer or a potential member of Parliament. He was raised in New Zealand by a English mother, left home at 16, worked as a cleaner and moved to London at age 17 to find his estranged father, David Benedictus, a playwright and author.

Maugham’s left-wing, an on/off member of the Labour Party, while making a living defending tax practices that some liberals find abhorrent.

He has spent years representing investors in Eclipse Film Partners No. 35, one of a number of controversial partnerships set up to exploit tax breaks on British movies that were later challenged by the government and found to be artificial -- legal but more about reducing taxes than boosting the film industry.

Taxes

Tax specialists are some of the best-paid lawyers in London -- and Maugham describes himself as “middle-class prosperous.”

Tim Levy, whose company created Eclipse, says he found Maugham to be “open, engaging, non-judgmental and intellectually curious.” Levy says Maugham never shared his political views with him.

Maugham started a tax blog that expressed opinions that many lawyers and accountants would never put their names to. “I argued repeatedly in the tax world that there was morality in tax,” he says. Legal colleagues called it career suicide, he recalls.

His blog didn’t exactly condemn all tax structuring. But it did point out that the subject was complex. Investors had often been encouraged to participate by their financial advisers and accountants, as well as by the government, which was keen to promote investment in films, he wrote in one post.

While his writing may have lost him clients, it got the attention of Ed Miliband, the then-leader of the Labour Party. Maugham became an informal adviser on tax policy before Miliband’s 2015 election defeat.

Tilting at Windmills

Maugham says being a lawyer in a controversial field requires a thick skin, which is useful for anyone willing to speak out on the subject of Brexit.

Online critics have ridiculed him for being undemocratic, out-of-touch, unpatriotic, and living in a converted windmill (he doesn’t although he has a holiday home in one). Even his name isn’t a proper one, in the view of one Twitter user. “Someone was threatening to string me from a lamppost the other day,” Maugham says.

Mostly, he takes it in good humor. “I much more enjoy a hostile audience than I do a friendly audience,” he explains. “If you have been booted in the head repeatedly arguing an ugly tax case, other forums hold few fears.” Miller, as the public face of the legal opposition, has endured far worse, he says.

“He seems to be arguing against the falling of the night,” says Gunnar Beck, an attorney and academic at the University of London who campaigned for Britain to leave the EU. While he doesn’t deny Maugham’s right to explore valid legal questions, “lawyers who don’t like the referendum result would probably do better to engage constructively with the process,” Beck says. He doubts the Dublin case will succeed.

Change of Heart

By saying openly that Brexit will be a disaster, Maugham is positioning himself against the majority of voters in the June 2016 referendum, which is a place occupied by few office holders. Theresa May continues to push for a so-called Hard Brexit. Labour campaigned ineffectively to keep Britain in the EU and has been indecisive on the issue since. Once a supporter, Maugham now questions the Labour Party’s future.

There is confusion which Maugham is seeking to clarify. Justice Secretary Liz Truss said in February that she understands Article 50 to be irrevocable. But John Kerr, the diplomat who helped to write it, said last November it could be reversed. “You can change your mind while the process is going on,” he said.

Meanwhile, May faces obstacles to her plan for a clean break. The EU won’t start exit talks until she agrees to settle Britain’s financial commitments to the bloc, a sign that its negotiating stance is hardening. Those liabilities may reach 60 billion euros ($64 billion).

At What Cost

If Maugham is right, and British voters come to see the cost of leaving the EU as too great, he will be on a very short list of high-profile opponents of Brexit. In the age of Trump and populist anger, perhaps even an unpatriotic tax lawyer and sometime windmill resident called Jolyon can find a place in the political firmament.

He’s also started the Good Law Project, which will raise money to fight lawsuits that advance a progressive agenda. The website’s homepage declares: “This isn’t us. This isn’t who we are.” One of its first cases will be to challenge the amount of tax paid by Uber Technologies Inc. in the U.K.

At the Young Fabians event in Portcullis House, Maugham sits at the head of a long table. It’s a friendly audience of about 15 young people who are, like Maugham, left-leaning, politically active and pro-Europe. The building also houses the offices of British MPs and staff. Outside in the hall, two armed police officers stand next to a painting of the Queen.

Changing World

One of Fabians asks, politely, whether the Dublin lawsuit is a purely hypothetical question, since there isn’t much evidence of Britain backing away from its decision.

“The world has changed a lot since June 2016,” Maugham replies. “Times are very, very uncertain. We don’t yet know what that means. It’s bold to assume it will have no impact on people’s perceptions of the desirability of Brexit.”

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