Legal advice privilege and the Prudential decision

What is legal professional privilege?

Legal professional privilege (‘LPP’) is a legal principle that protects all communications, in connection with legal advice, passing between a professional legal adviser and their clients from being disclosed to third parties without the prior permission of the client. The aim of this principle is to protect a client who wants to give complete disclosure to their legal adviser even if those communications may prejudice them in the future.

Result of the recent Prudential decision

In a tax dispute between Prudential and HM Revenue & Customs, Prudential claimed that the advice of their accountants in relation to tax law could be covered by LPP thereby protecting that information from being disclosed to third parties.

Prudential’s claim was refused because the privilege did not extend to legal advice given by a professional who was not a qualified lawyer and the Court of Appeal upheld that decision so the Prudential appealed to the Supreme Court.

The Supreme Court ruling confirmed that LPP will continue to only apply to legal advice given by qualified lawyers and that communications with other professionals such as accountants will not be protected.

Reason for the decision

The court was concerned that an extension of LPP to other professionals would lead to uncertainty as the court would need to decide whether the person came under the definition of “a member of a profession which ordinarily gives legal advice”. A difficulty would also arise where a document contained both legal and non-legal advice.

Click on the link to read the Supreme Court press statement following the ruling: http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2010_0215_PressSummary.pdf

Conclusion

This ruling only gives protection to communications in relation to legal advice between a qualified lawyer and their client from being disclosed to third parties and not to other professionals. However, in litigation where communications come into existence for “the dominant purpose of prosecuting or defending actual or pending litigation” then other professionals' legal advice is likely to be privileged.

by Amy Rogers, Associate