In a major decision, the UK Court of Appeal has found that legal professional privilege does not attach to legal advice given by accountants. The appeal concerned the scope of legal advice privilege.
The Court noted that legal advice privilege applies to all communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice. The specific issue raised by the appeal was whether, following receipt of a statutory notice from an inspector of taxes to produce documents in connection with its tax affairs, a company is entitled to refuse to comply on the ground that the documents are covered by legal advice privilege, in a case where the legal advice was given by accountants in relation to a tax avoidance scheme. It said the more general question raised by the issue was whether legal advice privilege extends, or should be extended, so as to apply to legal advice given by someone other than a member of the legal profession, and, if so, how far legal advice privilege thereby extends, or should be extended.
The Court held, by a 5:2 majority (Lord Clarke and Lord Sumption dissenting), that legal advice privilege should not be extended to communications in connection with advice given by professional people other than lawyers, even where that advice is legal advice which that professional person is qualified to give. The majority considered that the extension of legal advice privilege to cases where legal advice is given from professional people who are not qualified lawyers raises questions of policy which should be left to Parliament. (R (on the application of Prudential plc and another v Special Commissioner of Income Tax and another [2013] UKSC 1, UK Supreme Court, Lord Neuberger (President), Lord Hope (Deputy President), Lord Walker, Lord Mance, Lord Clarke, Lord Sumption, Lord Reed, 23 January 2013.)
[LTN 16, 24/1/13]