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).
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UK Supreme Court denies extension of legal advice privilege to tax accountants
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