The Court of Appeal has rejected the argument that legal professional privilege (LPP) should extend to the clients of non legally qualified advisers.
The point is being argued in the case of R (on the application of Prudential plc & Anor) v Special Commissioner of Income Tax & Anor [2010] EWCA Civ 1094. In a blow for not only Prudential but also the ICAEW which was supporting the case, the Court of Appeal upheld the earlier judgment of the High Court.
Legal professional privilege is a common law right. It ensures that any information provides to a person seeking advice about their legal rights and obligations cannot be passed to a third party without their express consent. It currently only applies to clients of lawyers and extends to any tax advice they provide. This is despite the fact that the majority of tax advice is now provided by chartered accountants.
Frank Haskew, Head of the ICAEW Tax Faculty, commented: “Naturally we are disappointed with the decision... This was an opportunity for the Court to decide that on public policy grounds there should be a level playing field for LPP. As it stands at the moment, the current position is anti-competitive for UK taxpayers and businesses. Whether they consult lawyers or chartered accountants, in our view clients who seek professional tax advice should be treated in the same way, irrespective of the qualification of the person.
“We believe that the current situation is unsustainable and contrary to the public interest. However, the judges decided that they were bound by existing precedent and that only lawyers were entitled to LPP. As a professional body, we will be reviewing the options available to press the case for reforming the LPP rules so that there is a level playing field for taxpayers seeking tax advice.”
The full judgment in the Prudential case is available on the Bailii website.
Prudential will now consider whether to apply for leave to appeal to the Supreme Court and ICAEW has indicated that it will support this application.
