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Praesto Consulting: VAT on legal services

The facts in Presto Consulting

Mr R was an employee of a computer software consultancy company (CSP). In 2009 Mr R resigned from CSP to set up a competing company Praesto (the appellant) as its sole director.

In late 2009 CSP sent a letter before action to Mr R alleging various matters such as breach of contract and breach of duties of confidentiality owed to CSP. Two days later CSP sent a letter before action to Praesto also alleging various matters including inducement to breach restrictive covenants. Both Mr R and Praesto instructed Sintons solicitors to respond to these letters and to advise generally.

In mid 2010 CSP commenced proceedings against Mr R. CSP claimed damages by reference to lost business which was to be estimated by reference to the accounts of Praesto or an account of profits...

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