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The Privy Coun­cil has up­held a land­mark case over the abil­i­ty of lit­i­gants to claim Val­ued Added Tax (VAT) on their le­gal costs when they are suc­cess­ful in pur­su­ing or de­fend­ing a law­suit.

De­liv­er­ing a judg­ment Thurs­day, five Law Lords of the Unit­ed King­dom-based ap­pel­late court up­held an ap­peal over the tech­ni­cal le­gal is­sue, which arose in a case in which a woman suc­cess­ful­ly sued the South West Re­gion­al Health Au­thor­i­ty (SWRHA) for med­ical neg­li­gence over her son’s death.

The ap­peal was not over her suc­cess in the case in­clu­sive of the over $1,750,000 in com­pen­sa­tion that was or­dered for her, but the lack of ap­pli­ca­tion of the 12.5 per cent tax for goods and ser­vices to the le­gal costs she was al­so award­ed.