Accountants and lawyers should operate on a ‘level playing field’ when it comes to disclosing legal advice on certain issues, a High Court judge said last week.
Justice Charles, presiding over a case brought by financial services company Prudential against HM Revenue & Customs, said in his judgment: ‘Prudential have put forward a compelling, and indeed unanswerable, case that in modern conditions accountants have the expertise to advise on tax law and it is firms of accountants, rather than firms of solicitors, who do give such advice and represent clients in disputes with the Revenue on many aspects of their tax affairs.’
Although Charles declined to extend legal professional privilege to accountants in such situations, citing established case law on the matter, he suggested that privilege could be restricted for lawyers where the work of both professions overlapped.
He said: ‘There is real strength in the argument that the extent of the right to refuse disclosure should not relate to the nature of the legal qualifications of the person giving the advice.’
Charles added: ‘There is force in the argument that a level playing field on the disclosure of legal advice to clients of lawyers and accountants… should be created.’
Prudential had tried to argue that it did not have to pass tax planning documents to the Revenue because legal professional privilege applied to the documents in question.
A spokesman for Prudential said that the company is deciding whether to appeal, but would not comment further.