A heavyweight team of legal eagles assembled before the Court of Appeal earlier this year to argue a point of commercial importance to various sets of professional advisers, and their clients. In one corner were the Law Society of England and Wales and the Bar Council (the “Lawyers”), supporting the tax collector, Her Majesty’s Customs & Excise (“HMRC”), and in the other corner were the taxpayer, Prudential PLC, and the Institute of Chartered Accountants in England and Wales (the “Accountants”). It is unusual for third parties to be given permission to intervene in litigation, but the dispute related to a legal attribute which, evidently, Lawyers, Accountants and HMRC view as important; does legal professional privilege (LPP) extend beyond lawyers?

The policy behind LPP is quite simple. The public’s desire that the administration of justice should take account of all material of probative value is viewed by the courts as subservient to the competing interest that a client should be able to communicate freely to his/her lawyer. This is so that the client will not be prejudiced by publication of what is communicated by lawyer to client, and vice versa. LPP, where it exists, absolutely prohibits the release of privileged material.


The background to the case related to a statutory request for documents issued by HMRC to Prudential. Some of these documents encompassed tax advice given to Prudential by PricewaterhouseCoopers, and Prudential, supported by the Accountants, objected to producing these documents on the grounds that such material should attract LPP. They argued that LPP should apply to tax advice given by Accountants, on the same basis as it applies to such advice given by Lawyers. Prudential argued the LPP should be activated through a functional test, and not through the status of the provider of the advice i.e. the advice should be privileged, regardless of who gave it.

Lloyd LJ gives a very useful synopsis of the ambit of LPP.

  • It applies to confidential communications between a lawyer and a client i.e. it applies to information given by a client to a lawyer, and to the advice proffered by the lawyer to the client.
  • It goes beyond the mere recital of the law, and extends to advice on what a client should do in a particular situation.
  • It does not extend to advice given by a lawyer otherwise than in his/her capacity as a lawyer. For example, LPP would not cover investment advice, although it would extend to the legal analysis of security for an investment.

Lloyd LJ found that he was bound by the judgment of the Court of Appeal in Wilden Pump Engineering Co v Fudfeld, to the effect that only advice given by qualified members of a legal profession would attract LPP. He rejected the Accountants’ attempts to distinguish that case and also rejected the argument that the European Convention of Human Rights required legal advice to be privileged, irrespective of the status of the provider of the advice. Lloyd LJ went on to say that it would be difficult to determine who would be recognised as an accountant, if LPP were to be extended to accountants.

The High Court had suggested that the competitive advantage enjoyed by Lawyers over Accountants could be tempered by reducing the scope of LPP as it applies to Lawyers. This was explicitly rejected by the unanimous Court of Appeal, who noted that any changes in the area of LPP would have to await legislation.

LPP In Ireland

LPP is well recognised by the Irish courts. The views of the UK courts are of persuasive value, and so this case is of interest to Irish professional advisers. It is likely that any limitation of LPP in the hands of lawyers, or extension of LPP to accountants, would, as the UK Court of Appeal indicated, require action by the Oireachtas in Ireland.

In an Irish context, LPP has recently come to the fore in the context of the mandatory disclosure of certain (tax-advantaged) transactions, introduced by Finance Act 2010. The legislation governing mandatory disclosure, and the draft regulations issued for consultation by the Revenue Commissioners, both recognised – to some degree - the importance of LPP. However, the ramifications of LPP, which protects legal advice both in the hands of the lawyer and the client, will need to be reflected in the final regulations and guidelines governing mandatory disclosure. This point was made by us in our submission to the Revenue Commissioners in September, 2010.