Out-Law / Your Daily Need-To-Know

Final ruling on legal advice confidentiality expected tomorrow

Out-Law News | 22 Jan 2013 | 10:00 am | 1 min. read

Lawyers will learn tomorrow whether the confidential protection that attaches to their communication with clients can also be claimed by accountants. A Supreme Court ruling on the issue of legal professional privilege (LPP) is expected tomorrow. 

If the Court allows accountants and possibly other groups to have privilege attach to their communications with clients then it could change the way that legal and other services are delivered and alter the structure of professional services industries.

LPP is the right of a person or company to communicate with their lawyer in confidence knowing that such communications will not be discloseable. That confidentiality continues even during the course of most trials, though sometimes an exception is made when fraud is involved.

Insurance company Prudential has asked courts to allow legal advice to be protected by LPP even when delivered by non-lawyers. The case centres on advice given on legal matters by accountants.

In 2007 Prudential was served with notices demanding the disclosure of documents under Section 20 of the Taxes Management Act by Her Majesty's Revenue and Customs (HMRC). A 2002 court ruling had already established that such notices could not compel the disclosure of documents that were protected by LPP.

Prudential said that it should not have to hand over documents that contained legal advice on tax provided to it by barristers, foreign lawyers and accountancy firm PricewaterhouseCoopers.

Both the High Court and the Court of Appeal said that it would be "reasonable" to extend LPP to non-lawyers, but the Court of Appeal said that it could not do this because it could only interpret existing law, not create new laws. Current laws cannot be read to extend LPP to non-lawyers, the Court of Appeal said.

The Court of Appeal ruling also said that it is unclear to whom LPP would be extended because "there is no recognised profession of accountant as such".

Prudential appealed the case to the Supreme Court, whose ruling is due tomorrow.

Litigation specialist James Bullock of Pinsent Masons, the law firm behind Out-Law.com, said that he expected the Supreme Court to take the same view as the Court of Appeal.

"We are anticipating a robust decision from the Supreme Court which upholds the decision of the Court of Appeal. Whilst the law relating to legal privilege should be reviewed, this is a matter for consultation and ultimately for Parliament to legislate. As it stands at the moment LPP is in essence an evidential matter and there would be wide ramifications if the courts were to start to tinker with it," he said.