Supreme Court rejects bid to extend legal professional privilege to non-lawyers

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23 January 2013

Neuberger: privilege still valid today

The Supreme Court has ruled 5:2 in favour of not extending legal professional privilege to non-lawyers, even where they are giving legal advice that they are qualified to give.

In the long-awaited Prudential ruling – which saw a bid for privilege for tax advice given by PwC – the court held that extending privilege would make what is currently a clear and well-understood principle uncertain.

The court – with the president, Lord Neuberger, giving the lead judgment – also said that ultimately it was a matter of policy that should be left to Parliament, which has previously legislated several times on the assumption that privilege only applies to advice given by lawyers.

The majority said it is “universally believed” that privilege only applies to communications by solicitors, barristers, chartered legal executives and foreign lawyers, with clear judicial statements of high authority backing it up.

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Extending legal advice privilege to any case where legal advice is given by a person who is a member of a profession would cause problems, Lord Neuberger said. “As I see it, it could be necessary for a court to delve into the qualifications or standing, and maybe into the rules and disciplinary procedures, of a particular group of people to decide whether the group constitutes a profession for the purpose of LAP [legal advice privilege]. So there would be room for uncertainty, expenditure and inconsistency, if the court had to decide such an issue.

“Further, I am not clear quite how a court is to decide whether a profession is one which ‘ordinarily includes the giving of legal advice’. Many chartered surveyors, architects and accountants, for instance, may not ordinarily give legal advice, but there are many who do. Should the issue be judged by reference to the profession generally, a particular branch of the profession (which could lead to definitional issues), or the practice of the particular member of the profession in the case, and, if this last possibility is correct, would the issue be determined on that member’s say-so?

“In addition, I suspect that much of the advice given by most members of those professions could not infrequently be characterised as ‘legal’ in nature by some people but not by others.”

Lord Neuberger also said “there is no doubt that the justification for LAP is as valid in the modern world as it was when it was first developed by the courts”.

Lord Clarke and Lord Sumption dissented, arguing that privilege should extend to advice given by members of a profession which has as an ordinary part of its function the giving of skilled legal advice, and that recognising the privilege attaching to the legal advice of accountants would not be extending the scope of LAP.

They said English law has always taken a functional approach to legal advice privilege and so the availability of privilege should depend on the character of advice which the client is seeking and the circumstances in which it is given, and not on the adviser’s status, provided that the advice is given in a professional context.

The Law Society, Bar Council, Institute of Chartered Accountants in England and Wales, Legal Services Board and AIPPI UK Group all intervened in the case.

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