The Supreme Court, by a majority of 5:2, has decided that legal professional privilege (LPP) only applies to qualified lawyers – solicitors and barristers.
The decision maintains the existing certainty about the scope of LPP, an important human right of clients. It confirms that:
'There is no doubt that the justification for [LPP] is as valid in the modern world as it was when it was first developed by the courts.'
The Law Society had intervened in the Supreme Court case of Prudential PLC and Prudential (Gibraltar) Ltd v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes). Prudential had asked the court to declare that LPP also protected the advice given by its accountants in relation to a marketed tax avoidance scheme.
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Background
In December 2012, the Law Society intervened in Prudential's appeal to the Supreme Court to extend LPP to accountants and others. The case involved a dispute between Prudential and HMRC which arose after HMRC issued notices requiring Prudential to provide certain documents which Prudential claimed were covered by legal advice privilege even though they had been prepared by accountants and not lawyers.
Prudential sought judicial review of the decision to issue the notices, and after losing at first instance took the case to the Court of Appeal in 2010. The Court of Appeal rejected Prudential's claim that the advice of accountants in relation to tax law could be covered by legal advice privilege. Prudential then appealed to the Supreme Court.
The case had ramifications not only for the legal and accountancy professions and for those setting up alternative business structures but also for the administration of justice.
The Law Society has been represented by Herbert Smith Freehills, Sir Sydney Kentridge QC, Tom Adam QC and Tim Johnston of Brick Court Chambers.
Webinar details
The Law Society is running a webinar on 30 January, which will provide insight from the team directly involved with the case. It will provide an analysis of the decision and the rationale used by the Supreme Court in coming to its decision.
Book the webinar