The fight to defend legal professional privilege looks set to continue, despite last week’s landmark victory for the profession in the Supreme Court. Parliament was urged to consider extending the scope of LPP in the wake of the judgment by the 140,000-member Institute of Chartered Accountants in England and Wales.
The ruling, in Prudential PLC and Prudential (Gibraltar) Ltd v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes), rejected a claim that documents about a scheme to avoid tax were privileged despite being drawn up by accountants rather than lawyers.
The Law Society, which successfully intervened in the case, welcomed the 5:2 decision as confirming the status of LPP. ‘The relationship between a solicitor or barrister and his or her client is a precious human right, tested and refined by centuries of common law,’ Desmond Hudson, the Society’s chief executive, said. ‘Legal professional privilege supports the process of law, speeding the conviction of the guilty and securing the acquittal of the innocent.’
However Michael Izza, chief executive of the ICAEW, said that parliament must, ‘as a matter of urgency’, find a way to resolve how multi-disciplinary practices address professional privilege.
Izza described the current application of privilege as ‘unprincipled and anti-competitive for individuals and businesses who we believe should be able to seek the best professional advice upon the same terms whether from lawyers, accountants or indeed other appropriately qualified professionals’.
The case originated when Prudential Plc sought to withhold from HM Revenue & Customs documents about a marketed tax avoidance scheme devised by accountants PricewaterhouseCoopers. Prudential argued that the documents related to the seeking and giving of legal advice. PricewaterhouseCoopers appealed to the Supreme Court following a judgment by the Court of Appeal.
In the leading judgment, Lord Neuberger, president of the Supreme Court, said privilege should not be extended to communications in connection with advice given by professional people other than lawyers, ‘even where that advice is legal advice which that professional person is qualified to give’. However, two members of the court, Lord Clarke and Lord Sumption (pictured), dissented, saying privilege should extend to advice given by members of a profession ‘which has as an ordinary part of its function the giving of skilled legal advice’.