The Court of Appeal’s decision to give the Law Society permission to intervene in Prudential PLC and Prudential (Gibraltar) Limited v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes) is a crucial step in our efforts to defend the principles of legal professional privilege (LPP). LPP has previously been confirmed by the courts as a ‘fundamental human right long established in the common law’, a right that the ordinary citizen has had for centuries.

LPP gives communications between a lawyer and their client for the purpose of obtaining legal advice privileged status, so that such communications cannot be made available to the court or third parties.

The Society believes that the issues raised in this appeal are of considerable importance to the solicitors’ profession. Questions which bear upon the nature and extent of LPP are fundamental to the work of solicitors.

In a High Court judgment delivered in October 2009 1, Charles J in Prudential held that legal advice privilege does not extend to advice from, and communications with, accountants, even if it relates to advice about the law. The approach taken by the judge was that legal advice privilege does not attach solely because of the purpose and nature of the advice but also because the advice emanates from a member of the legal profession.

However, the Society is concerned that the scope of legal advice privilege determined by Three Rivers (no 6) may be reexamined as a result of dicta of Charles J in paragraphs 71-73, in which he suggested that the ‘need for absolute confidentiality in respect of legal advice may need revisiting’ and that ‘rather than applying legal advice privilege to a wider range of professionals its application to advice given by lawyers should be restricted on a review of the policy and public interest considerations that underlie LPP’.

The boundaries of LPP must remain clear. Extending it risks creating uncertainty over what can and cannot fall under LPP. Equally, the case also has the potential to result in LPP being restricted to a more limited use than it currently holds, diminishing its purpose of ensuring vital communications between solicitor and client are confined to solicitor and client.

The concept of legal professional privilege has been and remains closely tied to the administration of justice. The first duty of a solicitor is to the court and the second is to the client. In this respect a solicitor is unique among the professions. The duty to the court seeks to ensure that the privilege is not abused.The courts have long taken the approach that legal advice privilege does not attach solely because of the purpose and nature of the advice but also because the advice emanates from a member of the legal profession.

The Prudential case concerns the advice provided by accountants where litigation was not contemplated. In such scenarios the advice and any information in relation to it will not benefit from legal advice privilege and a taxpayer may have to disclose documents or information, including its communications with the accountant under schedule 36 of the Finance Act 2008 and section 20 of the Taxes Management Act 1970.

An extension of legal professional privilege to non-lawyers is not a new suggestion. It is something which has been considered by law reformers before, but has never been taken up by parliament. Such an extension should be the subject of consideration by parliament and, if considered desirable, be the subject of primary legislation which would clearly define the limits and conditions of any extension to other professionals.

With a new government set to form it might be that parliament does seek to change the perimeters of LPP, but until it does the status quo should remain.

This is not the first time in which the Society has sought to maintain the current provision of LPP. The Society was granted permission to intervene in the appeal to the House of Lords in Three Rivers District Council v Bank of England (No 6) [2005] 1 AC 610 (which was principally concerned with the extent of the communications between solicitor and client which are covered by legal professional privilege).

The need for legal advice privilege was questioned by the Court of Appeal in Three Rivers (No 6). In our submission to the House of Lords, we included practical examples of the need for legal advice privilege in various areas of practice, such as conveyancing and in drawing up wills. For example, a person will often need to discuss sensitive issues about family matters with their lawyer when they are drawing up a will and they may not want to do this unless they know there is an absolute guarantee of this. The assistance these examples gave to the court was acknowledged in the judgments of Lord Scott of Foscote and Lord Carswell.

In making our submissions to the Court of Appeal in Prudential, we again want to include examples of the need to retain legal advice privilege in its current formulation, which is that a communication is privileged if it is made ‘confidentially for the purposes of legal advice’ which includes advice ‘as to what should prudently and sensibly be done in the relevant legal context’. Input from the profession in providing practical examples of the problems that a narrowing of legal advice privilege is likely to cause in relation to the areas of work which you do will be invaluable in supporting the legal arguments we will make in our submissions. The timetable is very tight as the case has been listed for July, so if there are any contributions you would like to make please email them to louise.speke@lawsociety.org.uk by 4 June.

1 Prudential PLC and Prudential (Gibraltar) Limited v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes) [2009] EWHC 2494 (Admin) (14.10.09). See http://www.bailii.org/ew/cases/EWHC/Admin/2009/2494.html

Desmond Hudson is chief executive of the Law Society