Summary and implications
In a landmark decision involving the great and the good of the legal world, the Supreme Court has confirmed that legal professional privilege (LPP) only applies to qualified lawyers and does not extend to non-legal professionals providing legal advice. The Supreme Court has reiterated the views of the High Court and the Court of Appeal ruling that:
- any extension to LPP would necessarily be a policy decision falling squarely within the remit of Parliament. Such a decision would require due assessment properly achieved through the legislative process; and
- should the courts wade in and extend the limits of LPP without the benefit of such assessment, it could generate the undesirable consequence of undermining the principle of LPP by detracting from the much relied upon elements of certainty and clarity.
Given that the majority decision recognised the strength of the argument to extend LPP it is only a matter of time before the law will be changed.
In response to a notice from HM Revenue & Customs (HMRC) requiring the disclosure of documents relating to a perceived tax avoidance scheme, Prudential Plc sought to withhold certain documents on the basis that they included legal advice from its tax advisers on the tax implications of the scheme, and therefore the documents were protected by LPP.
Prudential Plc applied for judicial review on the basis that the circumstances giving rise to LPP should be determined by the function of the adviser, not its professional status.
With both the High Court and the Court of Appeal concluding that advice from non-legal professionals would not be protected by LPP, determination of the case fell to the Supreme Court.
The matter was argued in the Supreme Court before seven Justices, eight QCs and seven juniors. There were no fewer than five interveners. This level of interest is extremely unusual and shows the importance of the issue.
Supreme Court outcome
- Whilst recognising the strength of the logical argument advanced by the two dissenting Justices, the majority held that any extension to LPP raises policy issues that should rightly be left to the consideration of Parliament.
- The Supreme Court’s concerns were centred on the risk of complicating a long-standing widely accepted principle. The court feared that any ill-advised extension to LPP could undermine the fundamental right of a client to consult its lawyer in absolute confidence.
- Notwithstanding its own limitations, the Supreme Court recognised that there was no good reason to distinguish legal advice given by a qualified lawyer from that of a non-legal professional provided that such advice is given in a professional context.
- The case advanced by the dissenting justices was that a functional approach would not extend the ambit of LPP, but simply recognise that legal advice is also now given by non-legal professionals. The test for the application of LPP should not depend on the adviser’s status.
The common law doctrine of legal professional privilege
There are two types of LPP which protect communications against disclosure:
- Legal advice privilege – between a lawyer and their client relating to the giving of legal advice.
- Litigation privilege – between a lawyer and their client and between either the lawyer or the client and a third party (such as a witness) which relate to existing or contemplated litigation.
LPP sits at the very heart of the relationship between qualified lawyers and their clients. It is the principle that enables clients, in the course of obtaining legal advice, to frankly disclose their affairs in the comfort of knowing that any disclosure cannot subsequently be used against them. It is a common law concept, not the creature of statute.
This judgment confirms that as a matter of construction, albeit not of logic, the courts are of the view that LPP is strictly within the domain of qualified lawyers. The courts are unwilling to extend LPP for fear of creating uncertainty that would serve to undermine the very principle on which LPP is based.
The dissenting judgment of Lord Sumption, newly admitted in the Supreme Court after a glittering career at the bar, puts the case for reform very clearly and persuasively.
In an era of professional service firms and ABSs, it seems wholly illogical to restrict LPP to only those who are qualified in a narrower sense. That said, until the law is changed, any legal advice given by a non-legal professional potentially remains liable to scrutiny, not least by HMRC.