In Prudential Plc v. Special Commissioner of Income Tax,  UKSC 1, the UK Supreme Court held (by a majority decision) that the common law protection afforded to a client under legal advice privilege could not be extended to tax-law advice given by a qualified tax accountant. All judges agreed there is no principled basis for drawing such a distinction (paragraphs 46, 47 and 140). As explained by one judge, Freshfields and PwC might give precisely the same tax law advice on identical facts; why should the client enjoy privilege in one case and not the other (paragraphs 140 and 141)? The majority concluded that the existing protection for legal privilege has developed as part of the common law, which is grounded in case-by-case experience and not logic (paragraph 47). The simple fact is the common law on legal privilege has been accepted on a general basis in respect of lawyers – because they are lawyers and their business is normally dealing with legal matters (paragraph 83). This common law has the “inestimable advantages of clarity and certainty” (paragraph 80). Extending the common law to legal advice given by certain professionals who are not lawyers – this could include tax accountants, engineers, town planners, valuation surveyors, actuaries, architects, and others – would give rise to unacceptable uncertainty as to when privilege might attach and whether limitations should be imposed. Such uncertainty and policy decisions are better left to Parliament (paragraph 61).
Register Now As you are not an existing subscriber please register for your free daily legal newsfeed service.Register
If you have any questions about the service please contact firstname.lastname@example.org or call Lexology Customer Services on +44 20 7234 0606.
UK Supreme Court denies extension of legal advice privilege to tax accountants
If you are interested in submitting an article to Lexology, please contact Andrew Teague at email@example.com.
"Lexology is a quick and useful indicator of developments in the legal sphere. It alerts me to changes taking place in the legal environment in South Africa that I may not otherwise have spotted or had immediate access...
"Lexology is a quick and useful indicator of developments in the legal sphere. It alerts me to changes taking place in the legal environment in South Africa that I may not otherwise have spotted or had immediate access to as a company lawyer. It definitely serves as a trigger for me to investigate such changes in the legal landscape in South Africa as they may affect my work and that of my employer. I believe that receiving Lexology provides me with a competitive advantage."
Dr Jürgen Fegbeutel
Legal Services Director
BMW (South Africa) (Pty) Ltd