Setback for $1.3 Billion Uber Tax Suit as Court Denies Costs Bid

(Bloomberg) -- A British lawyer faces a setback in his plan to take on Uber Technologies Inc. over its tax payments after losing a court bid to limit his costs in the lawsuit.

Judge William Trowler refused to grant Jolyon Maugham, who runs a group that raises money for lawsuits promoting a progressive agenda, an order limiting the amount he’d have to pay Uber if he ultimately lost the case to 20,000 pounds ($26,150).

“I do not consider that this is a case in which the justice of the case makes it appropriate” to grant the costs order, Trowler said in his ruling Monday.

Maugham’s group, the Good Law Project, said in a statement that “this is not the end of the line” for the case and it’s seeking permission to appeal. Without the cost protection, the case can’t continue, the statement said.

It’s a potential boost for the ride-hailing giant, which is already facing a series of lawsuits in the U.K., including one over its London operating license and another over its drivers’ employment rights, which is heading to the Supreme Court.

Maugham plans to bring a lawsuit arguing that Uber should pay Value Added Tax, a 20 percent U.K. sales tax on most goods and services. Uber says it doesn’t need to because it’s only acting as an intermediary between drivers and riders.

Uber could owe 1 billion pounds ($1.3 billion) if Maugham wins, once backdated payments are counted, according to his calculations.

To contact the reporter on this story: Kaye Wiggins in London at kwiggins4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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