ICAEW revives campaign on legal professional privilege

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The Law Society today rebutted a claim by elite accountancy body the ICAEW that legal professional privilege ‘seriously distorts the market’ for tax and other advice.

Accountants do not have the same duties to their clients or the courts, Society president Jonathan Smithers stressed.

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The claim is included in the response of representative body the Institute of Chartered Accountants in England and Wales to the recently announced study by the Competition and Markets Authority into the supply of legal services.

The ICAEW (pictured) is currently an approved regulator and licensing authority for probate. It is seeking the same dispensation for the remaining reserved activities, including rights of audience and conduct of litigation.

It argues: ‘Accountants currently represent clients before the tax tribunals of the General Regulatory Chamber (GRC) and provide expert litigation support to solicitors relating to both civil and criminal actions. They also appear in court as expert witnesses.

‘Obtaining accreditation to carry out the further reserved legal activities for the service area of taxation is likely to be attractive to all sizes of accountancy firms.’

The body claims this would provide a ‘natural link to the traditional accountancy practice’, but it is also concerned about the effect of privilege on a free market. 

In 2012 the institute intervened unsuccessfully in the landmark Prudential case, in which the Supreme Court ruled that LPP applies only to qualified lawyers.

The institute greeted that decision by urging parliament to take action, describing the current position as ‘unprincipled and anti-competitive’ – a claim it reiterates in its response to the CMA.

‘Some law firms have marketed their services on the basis that they are in a position to keep their advice completely confidential, where accountants are not able to do so,’ the response adds.

‘The anomaly remains [and] results in a serious distortion to the competitive environment, where clients may seek professional services on the basis of the availability of [privilege], rather than a cost-effective service.’

However, Law Society president Jonathan Smithers said today: ‘While the Law Society recognises that accountants provide valuable tax advisory services, it is concerned that extending reserved tax-based legal services could put consumers at risk and would not be in the public interest.  

‘Litigation is a specialist area in itself, and has fundamental differences from advisory work.  

‘Accountants do not have the same duties to their clients, or to the courts, as solicitors. It does not therefore follow that because a body’s members provide advisory services in an area that it also ought to be able to conduct litigation in relation to those matters. Finally, this would result in further regulatory complexity, creating multiple levels of regulation, while several government consultations are going on to potentially reduce regulation.’

Readers' comments (12)

  • "Elite accountancy body". Is this the Sun?

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  • Without digging into the murky [pasts I think that one can only rebutt a presumption and in the matter at hand there is no presumption to rebut, further one might advocate that the presumption should not be followed / applied but the person who rebuts the presumption is the tribunal of fact.

    But when an article is 'by gazette newsdesk' I think we should lay off, it's probably the teenage son / daughter of someone well connected serving an internship.

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  • not sure how you're spelling rebut but in any case you're confusing it with 'refute'.

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  • I've said it before and I will say it again, when it comes to tax matters, most people would rather be advised by their accountant than a (possibly) innumerate solicitor. Accountants can instruct Counsel directly and in those situations the solicitor often represents an unnecessary expense.
    If you struggle with maths, law is the highest status occupation you can get. If I could have done the maths to get science A Levels, in the days before grade inflation, I would not have become a solicitor.

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  • Should they be allowed their costs, though, Mr Agassi?

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  • We currently have a system where virtually anything goes, unless..you're a solicitor. Unregulated is vogue, so privilege is nailed on for Accountants. What is it worth anyway when criminal activity is concerned ?

    We solicitors need to start developing accountancy services.

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  • As a solicitor I would much much rather be regulated by the ICAEW. They are so go ahead for their members and light years away from TLS. Their regulation is lighter, tribunal measures less draconian and indemnity costs cheaper. All the things we're not essentially and have no apparent prospects of attaining. What a mess we are.

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  • I am confused as to the references to litigation in the article. From my understanding, the Supreme Court ruled (by a majority of 5:2) in relation to legal advice privilege and not in relation to advice given connected to litigation. Where litigation is involved, an accountant's legal advice to the client will be privileged provided the relevant tests are satisfied. The Supreme Court considered that the matter should be considered by Parliament: Lord Clarke: "the true position at common law does seem to me to be a matter of some importance and I hope that the whole issue will be considered by Parliament as soon as reasonably practicable".

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  • As an aside, the author's use of the word 'rebutted' is correct. The word 'rebut' may or may not have a particular meaing when used by lawyers, but the author is not using the word in that sense (if that sense exists at all). The Law Society has not gone so far as to have refuted the claim.

    As a further aside, the observation about the word 'rebut' is not one, I suspect, that an accountant would have made. Perhaps it is not such a bad idea seeking advice from an accountant after all.

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  • @Anonymous18 February 2016 07:36 am:

    "...I've said it before and I will say it again, when it comes to tax matters, most people would rather be advised by their accountant than a (possibly) innumerate solicitor. ..."

    Possibly. I can do basic Maths and use a calculator so I would rather have someone who has read Hart/Devlin, Stuart Buttle's/Chris Whitehead's Book on Taxation Revenue (and understands it and can read it or can bother and is not too lazy). I would also rather know about Expressed/ Implied/ Constructive / Resulting Trusts and have read Hanbury on Modern Equity and Trusts, (the more discerning mysterious periodicals like the British Tax Review are secondary), but there you go).

    Accountants can instruct Counsel directly and in those situations the solicitor often represents an unnecessary expense.

    Or, you understand how to draft Trusts and instruct Counsel Yourself who are Accountants (cutting out the middle man (and have read the latest Litigious cases on Accountants Profession Negligence).

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