The ancient right of legal professional privilege (LPP) applies only to qualified solicitors and barristers, the Supreme Court has held.
In a majority 5:2 verdict, the Court ruled that the scope of LLP did not extend to accountants offering legal advice on a tax matter, in ‘Prudential PLC and Prudential (Gibraltar) Ltd v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes)’ [2013] UKSC 1.
Prudential had argued that accountants advising on a tax avoidance scheme could not be compelled to disclose their communications because they were bound by LLP and therefore owed absolute confidentiality to their client.
However, the Court agreed with the Court of Appeal’s view that extending LPP to other professionals was a matter for Parliament not the courts.
Giving the lead judgment, Lord Neuberger, President of the Supreme Court, said: “I reach this conclusion for three connected reasons, which together persuade me that what we are being asked to do by Prudential is a matter for Parliament rather than for the judiciary.
“First, the consequences of allowing Prudential’s appeal are hard to assess and would be likely to lead to what is currently a clear and well understood principle becoming an unclear principle, involving uncertainty. Secondly, the question whether [LPP] should be extended 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. Thirdly, Parliament has enacted legislation relating to [LPP], which, at the very least, suggest that it would be inappropriate for the court to extend the law on [LPP] as proposed by Prudential.”
James Bullock, head of litigation and compliance at Pinsent Masons, said: "Legal Professional Privilege is a rule of evidence designed to protect individuals against disclosure to the court.
“It is therefore about the rights of litigants – not, as some have sought to portray it, about professionals lining their pockets.
“There are many interested parties. Everyone has focused on tax advisers and accountants, but it is also an issue for other professionals who provide advice on ‘the law’, for instance surveyors and planning consultants.
“We need a full consultation exercise, but this should look on LPP in its context as a rule of evidence. As such it should be led by the Ministry of Justice, not, for example, by HMRC. Perhaps a working committee should be appointed, similar to that which we have recently experienced in the tax world on the General Anti-Abuse Rule. This could comprise representatives of the various ‘interested’ professions. However, it should be chaired by a judge of at least High Court rank.”
Desmond Hudson, chief executive of the Law Society, which intervened in the case, said: “The relationship between a solicitor or barrister and his or her client is a precious human right, tested and refined by centuries of common law.
“Legal professional privilege supports the process of law, speeding the conviction of the guilty and securing the acquittal of the innocent.”
Lord Neuberger’s five-minute summing up of the decision and reasons is the first to be posted on the Supreme Court’s new YouTube channel (www.youtube.com/uksupremecourt). From today, these summaries will be posted by lunchtime on the same day they are delivered.
The Supreme Court already broadcasts its hearings live through the Sky News website.
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