0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

legal advice privilege will not extend to other professionals

23 January 2013

The Supreme Court has handed down its judgment in the case of R (on the application of Prudential plc and another) v Special Commissioner of Income Tax & Ors, upholding the Court of Appeal decision (by a majority of five to two). The judgment confirms that legal advice privilege (LAP) only applies to communications in connection with advice given by members of the legal profession and not to advice, or communications in connection with advice, given by professional people other than lawyers. This is the case even where the advice is legal advice which that professional person is qualified to give.


Prudential had entered into a marketed tax avoidance scheme which was notified to HM Revenue & Customs (HMRC). HMRC issued Prudential with a s20 Taxes Management Act 1970 (TMA) notice requiring them to disclose documents in connection with the scheme. Prudential argued that, following the House of Lords decision in R (Morgan Grenfell & Co) v Special Commissioner of Income Tax [2002] UKHL 21, they were not required to disclose documents to which LAP attached, including legal advice obtained on tax matters from accountants (in this case PriceWaterhouseCoopers).


Whilst acknowledging that the case for allowing the appeal was a strong one, Lord Neubergers leading judgment stated that: "I reach this conclusion for three connected reasons, which together persuade me that what we are being asked to do by Prudential is a matter for Parliament rather than for the judiciary. First, the consequences of allowing Prudentials appeals are hard to assess and would be likely to lead to what is currently a clear and well understood principle becoming an unclear principle, involving uncertainty. Secondly, the question whether LAP should be extended to cases where legal advice is given from professional people who are not qualified lawyers raises questions of policy which should be left to Parliament. Thirdly, Parliament has enacted legislation relating to LAP, which, at the very least, suggests that it would be inappropriate for the court to extend the law on LAP as proposed by Prudential."

Lord Neuberger also stated that, "[to] concentrate on tax advice given by accountants would be wrong, because it would ineluctably follow from our accepting Prudentials argument that legal advice given by some other professional people would also be covered," and asking the court to consider whether a professionals advice was covered by LAP would lead to "uncertainty, expenditure and inconsistency."


Despite intervention from the Law Society, the Bar Council, and the ICAEW, and the courts comments that the argument for allowing the appeal were strong, tax law advice given by accountants will not be protected by LAP, as to extend it beyond advice given by those in the legal profession would lead to a clear and well understood principle becoming uncertain.

The Supreme Courts decision appears to be one of policy and a reluctance to muddy the waters surrounding what we currently view as the extent of LAP, especially in light of Parliaments past decisions to maintain a distinction between lawyers and tax advisers. Accountants providing tax advice will need to bear in mind that such advice will not be protected by LAP, and that not only would it be prudent to make clients aware of this, but it may also be worthwhile involving those in the legal profession to best protect a clients position in cases such as the present one.

This particular case relates to accountants giving tax law advice. However, Lord Neubergers comments are clearly intended to ensure that any professionals advice, other than a lawyers, will not be protected by LAP. Professionals therefore need to be particularly careful to avoid inadvertently giving advice which is subsequently disclosable.

focus on...

Legal updates

Non-payment of insurance premiums during the Coronavirus pandemic

The forced closure of many businesses as a result of the Coronavirus pandemic has had a huge impact on the nation’s Gross Domestic Product (GDP). Recent reports from the Office for National Statistics state that the economy was 25% smaller in April than it was in February this year.


Legal updates

Reinstatement for property damage losses – when does it apply?

The Court of Appeal has recently considered the correct test for measuring the indemnity for property damage losses and has provided useful guidance on whether an insured needs to intend to reinstate the property to its pre-loss condition.


Legal updates

Coronavirus (COVID-19) insurance considerations

With instances of COVID-19 rapidly increasing throughout the UK, many businesses are considering the options available to limit staff and customer exposure to Coronavirus.


Legal updates

Legal and regulatory newsletter - February 2020

Read our latest insurance newsletter for our clients and contacts across the financial services market with quarterly updates and insights on topical legal and regulatory issues.


The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

mailing list sign up

Select which mailings you would like to receive from us.

Sign up