Legal costs are clearly a legitimate business expense.
The fact that they are not tax deductible for the individual, but are tax deductible for business is no different from any other product or service available in our economy. Mr Fair said that all parts of the community needed legal advice in order to cope with complex rules and regulations. He said competent businesses must obtain legal advice as an ordinary part of conducting business within the law. There are strong disincentives for business to conduct expensive litigation, just as there are strong disincentives for business to incur other controllable expenses. To suggest that businesses are enthusiastically taking their disputes to court because of tax deductibility is quite wrong.