The UK Supreme Court (SC) recently, by a majority of five to two, ruled against extending the common law scope of legal professional privilege and held that it only applies to legal advice by solicitors, barristers and foreign lawyers, including in-house counsel. Advice on the law given by accountants and other professionals is not protected (R (on the application of Prudential and another) v Special Commissioner of Income Tax and another [2013] UKSC 1).

Legal Professional Privilege

It is an aspect of the rule of law that a person should be free to take advice on his rights under the law and not have to disclose what the advice is. He can waive his right to keep that advice secret. He will also lose that right if he uses the advice for a nefarious purpose. The right being a common law right can also be overridden by statute.

There are two main sub-sets of the privilege: (1) legal advice privilege (LAP) which covers communications between a lawyer and a client for the purposes of seeking or giving legal advice, in both the litigation and nonlitigious context; and (2) litigation privilege which covers communications between a client or his lawyer and third parties where litigation or other adversarial proceedings are reasonably in prospect, or commenced, and where the communication is for the main purpose of litigation.


The case before the SC arose due to notices issued under tax legislation by HM Revenue & Customs (HMRC) to Prudential plc and its subsidiary company, Prudential (Gibraltar) Ltd, (together, Prudential) in respect of a marketed tax avoidance scheme structured by Prudential. It was argued that documents relating to tax law advice rendered by an accounting firm were exempted from disclosure.

The Law

The issue was of sufficient importance for the Institute of Chartered Accountants for England and Wales (ICAEW) to intervene in the proceedings. In arguing for the extension of LAP to tax advice given by the accountants, it was highlighted that social conditions had changed and it was ambiguous as to who are professional legal advisors. Prudential pointed out that the majority of tax advice is today dealt by accountants with equal expertise as lawyers advising in the same area, and considered LAP as a fundamental human right to be afforded in the interest of the client. Further, that LAP ought to be based upon the nature of the advice given (advice of a legal nature) rather than the status of the person giving the advice.T

he contrary argument brought by the HMRC and supported by the Law Society, Bar Council and the International Association for the Protection of Intellectual Property (AIPPI UK) founded itself upon the universal assumption that LAP is restricted to advice given by lawyers. To change this presumption, when Parliament has legislated on such a basis, would involve a policy decision with unpredictable and wide-ranging consequences.

The SC declined to extend the application of LAP. The majority reasoned: (1) this was a sensitive area of the law with currently clearly defined limits, and reformulation of the scope of LAP to encompass more than the legal profession could not be done without carefully identifying the other qualifying professions and the privileged and non-privileged activities within those professions; (2) the questions of policy raised by any extension are best left to Parliament; and (3) Parliament had passed other legislation that removed or extended the application of LAP and it would be inappropriate for the court to do so.


Although the specific question between the parties concentrated on tax advice given by accountants, the SC held that this was only a sub-set of a much larger issue – who else in our community now gives legal advice? So for now it is still necessary to seek the blessing of lawyers in order to have the protection of the privilege. There will no doubt be other professionals petitioning for a change to this established order.