R (on the application of Prudential Plc) v. Special Commission of Income Tax [2013] UKSC 1

The Supreme Court has recently delivered an important decision on the question of whether legal advice privilege covers communications between a client and a non-lawyer. By a 5:2 majority, their Lordships held that the privilege extends only to advice given by members of the legal profession. Consequently, documents relating to tax law advice given, in this case, by chartered accountants had to be disclosed to the UK tax authorities.


Where it applies, privilege protects a party from having to disclose its communications. There are two types of privilege: legal advice privilege and litigation privilege. The Prudential judgment is concerned with legal advice privilege alone.

Legal advice privilege protects all communications passing between a client and its lawyers in connection with the provision of legal advice, except in very limited circumstances.

Did tax law advice from chartered accountants attract legal advice privilege?

The Applicant, Prudential Plc, had received advice from an international firm of chartered accountants, PriceWaterhouseCooper (PwC), in relation to a tax avoidance scheme. The UK tax authorities had issued an order requiring Prudential to disclose certain documents received from PwC in relation to that advice. Prudential sought to overturn the order on the basis that the advice was covered by legal advice privilege. The application failed in the High Court and in the Court of Appeal and the matter proceeded on appeal to the Supreme Court for a final decision.

Even though the tax advice had not been given by a member of the legal profession, Prudential argued that legal advice privilege should extend to advice given by a non-lawyer (such as an accountant) if the same advice would be given to the same client by a member of the legal profession. It was common ground that the majority of tax advice in modern times is given by qualified accountants, rather than by lawyers.

The Supreme Court’s decision

The starting point taken by the majority of the Supreme Court was that it was universally believed that legal advice privilege applies only in respect of advice given by the legal profession (which, in England and Wales, Lord Neuberger clarified, meant barristers, solicitors, members of the Chartered Institute of Legal Executives and, by extension, foreign lawyers).

Numerous previous judicial decisions had refused to extend the ambit of legal advice privilege to advice given by people such as consultants or trade mark agents. In addition, the UK government had, in the past, rejected proposals to enact legislation to the effect that advice from accountants was covered by legal advice privilege. Various pieces of legislation suggested that legal advice privilege was confined to advice being given by members of the legal profession.

The approach taken by the minority members of the Court in favour of extending legal advice privilege was that the privilege should cover advice given by any professional “whose profession ordinarily includes the giving of legal advice”.

The majority of the members of the Supreme Court accepted that there was no principled reason to justify the exclusion of advice given by non-lawyers from the protection of legal advice privilege. However, they took the view that to allow Prudential’s appeal would extend the clear and well-understood ambit of legal advice privilege. It was for the legislature, and not for the courts, to decide whether to extend legal advice privilege and to define the scope of such privilege and what restrictions should apply to the protection afforded. The majority considered it likely that, if Parliament was prepared to allow legal advice privilege to be recognised in respect of tax advice given by accountants, then it would only be on a significantly qualified basis.

Lord Reed explained that the rules on what constitutes legal advice privilege must be clear, certain and readily understood. In their present formulation, the existing rules met those requirements. By contrast, the test put forward by the dissenting members of the Supreme Court would mean it might be necessary for a court to enquire into the qualifications and standing of the advisers and assess whether the group to which those persons belonged constituted a “profession”. There was also a greater possibility that advice given by non-lawyers would contain both legal advice and non-legal advice and that might make it difficult to decide how and whether legal advice privilege attached.


The essential difference of approach between the members of the Supreme Court on this issue was that the dissenting minority took the view that the status of the adviser was immaterial so long as the other requirements for legal advice privilege were met. That view was rejected by the majority. Therefore, unless there is a change in the law enacted by Parliament, only communications with solicitors, barristers, qualified legal executives and foreign lawyers in relation to the provision of legal advice will be protected from disclosure by reason of legal advice privilege.

It has been widely reported that interested professional bodies intend to lobby the government to enact legislation on this issue. It remains to be seen whether Parliament has any appetite to change the law and, if so, what form any statutory intervention might take.