Extension of legal advice privilege

The legal advice privilege ensures that communications between clients and their lawyers remain confidential, as the court cannot order it to be disclosed.  This enables the client to seek legal advice in complete confidence without having to worry that the advice given could later be used against them in court.

In the recent case of R (on the application of Prudential PLC) v Special Commissioner of Income Tax 2013 the Supreme Court put forward their thoughts on the question of whether the legal advice privilege could extend to cover legal advice given by non-legal professionals.  This case concerned an appeal by R against a decision that legal advice given by their accountants in relation to a tax avoidance scheme was not covered by legal advice privilege.

Although this case concerned tax advice given by accountants, it has consequences for all non-legal professionals who give advice on the law.  In the property world this is likely to be surveyors, who often give advice on rent reviews, rights to light, dilapidations etc.  Surveyors may often give legal advice as to the strength or weaknesses of a client’s position long before litigation is contemplated.  If the matter were then to go to court this advice would have to be disclosed, even if it harms the client’s case.

Supreme Court’s opinion

Extending privilege

The court held that legal advice privilege could not extend to non-lawyers.  However, there were strong arguments put forward in favour of extending the legal advice privilege.  Dissenting judges submitted that as the principle of the legal advice privilege was for the benefit of the client, not the lawyer, it was hard to see why the privilege should be restricted to those who give legal advice that happen to be lawyers.
 
Not extending privilege
 
The argument against extending the legal advice privilege was that the extension would carry an unacceptable risk of uncertainty.  This was based on three reasons:
 
·         It was unclear whether certain occupations would be regarded as professions.
 
·        While some surveyors, for example, regularly give legal advice, others may not.  There was, therefore, difficulty in saying whether a whole ‘profession’ should be given privilege, or whether it should just apply to certain members.
 
·        Difficulties were foreseen in trying to work out whether the advice given by a non-legal professional was actually ‘legal’ advice or not, and therefore whether it should be privileged or not.
 
The Supreme Court went on to say that this was an issue that Parliament was best placed to decide upon, as it raised questions of policy.  The Government, in enacting the Legal Service Act 2007, has shown willingness to change ‘special’ common law rules that apply only to lawyers, so the potential for a change to the rules of privilege is there.  However, it was further commented that this issue was not at the top of Parliament’s agenda, and therefore it could be a long time before the rules of privilege are extended beyond lawyers.
 
http://ukscblog.com/new-judgment-r-prudential-plc-anor-v-special-commissioner-of-income-tax-anor-2013-uksc-1

by Nitej Davda, Associate