Be careful who gives you legal advice: Supreme Court confirms privilege is restricted to communications with lawyers, even if the advice is the same.

The Supreme Court, in its much-anticipated judgment in R (on the application of Prudential plc and another) v. Special Commissioner of Income Tax and another 1, has considered the scope of the legal advice privilege in respect of confidential communications between clients and their advisers, for the purposes of requesting or providing legal advice (in this case in relation to tax law).

In its 23 January 2013 judgment, the Supreme Court, by a majority of five to two, ruled that clients could not claim legal advice privilege in respect of communications with their accountants or anyone outside the legal profession.

This decision serves as a timely reminder of the restrictive scope of the protections of the legal advice privilege. By way of background, the legal advice privilege is one head of the legal professional privilege (the other being the litigation privilege), and applies to confidential communications passing between a client and its legal adviser in the course of a professional relationship, for the purposes of enabling the adviser to give or the client to receive legal advice. It is a common law principle, going back at least to the 16th century2.

The key points arising from the Supreme Court’s majority decision are:

  • The principled arguments for distinguishing between lawyers and non-lawyers where they give the same type of advice are weak.
  • However, it is universally believed (in case law, textbooks, by Parliament and by the executive) that legal advice privilege applies only to the legal profession (which includes foreign lawyers).
  • The extension of legal advice privilege to non-lawyers would carry an unacceptable risk of uncertainty and loss of clarity in a sensitive area of law.
  • These arguments likely apply beyond tax advice, to all legal advice given by non-lawyers, regardless of subject matter.
  • Clients should take great care when instructing non-lawyers to give advice, as their exchanges could become disclosable in the event of a dispute.


In 2004, the Prudential group of companies (Prudential) instructed PricewaterhouseCoopers to advise them in relation to a tax scheme. Prudential implemented this scheme. The inspector of taxes, HM Revenue & Customs, wished to look into transactions under the scheme, and requested copies of specified documents. Prudential refused to disclose some documents on the basis that Prudential was entitled to claim legal advice privilege in respect of them.

Whether Prudential was entitled to claim such legal advice privilege was the subject of the litigation.

Supreme Court Decision

The High Court rejected Prudential’s arguments. The Court of Appeal upheld that decision, and Prudential appealed to the Supreme Court.

Lord Sumption, in his dissenting judgment, set out his view of the applicable principles, i.e., that (i) legal advice privilege belongs to the client; (ii) it depends on the public interest in promoting access to legal advice on the basis of absolute confidence and (iii) it is not dependent on the status of the adviser (rather that, historically, only lawyers happened to give legal professional advice). He concluded that there could be no principled reason for distinguishing between the advice of lawyers and accountants. Lord Sumption suggested a reformulation that legal advice privilege was confined to cases where legal advice is taken “in the course of a professional relationship with a person whose profession ordinarily includes the giving of legal advice”. Lord Clarke agreed with Lord Sumption.

Lord Neuberger accepted this reasoning. In particular, he noted that communications with foreign lawyers had enjoyed for many years the same legal advice privilege as communications with English lawyers. However, he considered that the difficulties in formulating an alternative formulation of the circumstances where legal advice privilege applied were too great, and that Lord Sumption’s reformulation “would carry with it an unacceptable risk of uncertainty and loss of clarity in a sensitive area of law”. The existing restriction of legal advice privilege to members of the legal profession is universally accepted, and any extension beyond these boundaries is a policy issue best left to Parliament. Lords Walker, Hope, Mance and Reed agreed with Lord Neuberger’s judgment.

The Supreme Court ruled, by a majority of five to two, that legal advice privilege applied only to communications in connection with advice given by members of the legal profession. In doing so, the Supreme Court confirmed a long line of case law denying the extension of legal advice privilege:

“the presently accepted state of the law on legal advice privilege is clear to any professional advisers who need to understand it, and relatively easy to explain to their clients who are meant to benefit from it. The implications for society, for the courts, and for the executive, of legal advice privilege only applying where it is members of the legal profession who are giving the advice, have been generally understood, accepted and allowed for by the rules and practice of the courts and in legislation.”

It is currently unclear whether Parliament will take steps to amend the law in this important area, a hope expressed by Lord Clarke.