Legal professional privilege not available for communications with accountants

15 October 2010 by

Communications from an accountant giving legal advice do not attract legal professional privilege. The rule is only  available if the advice is sought from a lawyer.

Notices  under the Taxes Management Act 1970 (“Section 20 notices”) were served on the appellant company by the Revenue with a view to investigating a commercially marketed tax avoidance scheme. The appellant asserted that the notices required production of documents by which they sought or received legal advice on tax matters, in some cases from counsel and foreign lawyers, and in others from accountants.

A notice under s.20 did not require a person to disclose documents to which legal professional privilege applied.  The appellant therefore claimed that they were not obliged to disclose documents relating to obtaining advice from their accountants. On most occasions, it was contended, on which a person seeks advice about fiscal liabilities, which often involves a consideration of, and advice about, the relevant law, that person does so by approaching accountants rather than lawyers. They submitted that the rationale which lies behind the legal professional privilege (LPP rule) requires that a client’s communications with his advisers should be just as much protected from disclosure if the advice, being legal advice, is sought from and given by an accountant as it is if sought from and given by a solicitor or barrister.

Charles J, who heard and dismissed Prudential’s application for judicial review, accepted much of what underlies Prudential’s argument. In his judgment below, he said this:

I … agree that by reference to the need for confidentiality in respect of the giving of legal advice and the logic, purpose and public interest underlying legal advice privilege there is real strength in the argument that the extent of the right to refuse disclosure should not relate to the nature of the legal qualification of the person giving the advice. (para 71)

Nevertheless he felt constrained by the present state of the law to decide against Prudential. In this appeal the Prudential submitted that the determining factor was not the status of the adviser but the nature of the advice, and thus the function of the adviser, so that it should not matter whether the adviser was a lawyer as such or was another appropriately qualified professional person approached for, or giving, legal advice.

Appeal dismissed

The provisions under the TMA have since been repealed and replaced by Schedule 36 to the Finance Act 2008.  In passing this equivalent law, Parliament had deliberately not created any statutory extension of legal professional privilege to legal advice sought from and given by accountants on tax matters. The justification for legal advice privilege was not limited to the conduct of litigation. The LPP rule recognises that

in the complex world in which we live there are a multitude of reasons why individuals, whether humble or powerful, or corporations, whether large or small, may need to seek the advice or assistance of lawyers in connection with their affairs; they recognise that the seeking and giving of this advice so that the clients may achieve an orderly arrangement of their affairs is strongly in the public interest (Lord Scott in Three Rivers District Council v Governor and Company of the Bank of England (No. 6))

The court also noted that an extension has been made by statute of LPP to patent agents, trade mark agents and licensed conveyancers. But this was of no assistance to the appellant:

not only has Parliament not created any statutory extension of LPP to legal advice sought from and given by accountants on tax matters, but this position has been reached after consideration of the position by several responsible bodies, making diverging recommendations on the point, including two committees, some of whose recommendations did lead to legislation.Parliament’s failure to change the law in this respect is not an accident.

Moreover, in s.20 TMA (and since then the Finance Act 2008, Schedule 36), general reference is made to documents which are the subject of LPP,  and specific provision is made as regards what a tax accountant or a tax adviser could and could not be required to produce.

In any event the Court of Appeal was itself  was bound by authority (Wilden Pump Engineering Co v Fusfeld (1985) FSR 159 CA (Civ Div))to hold that legal professional privilege applied, at common law, only as regards advice by members of the legal professions of England and Wales, and by extension foreign legal professions, and could not be extended to someone who was not a lawyer, even if the advice they were giving was legal advice which they were competent to give .  Although function entered into the test, because the lawyer must be consulted in his professional capacity and must give or be asked to give advice as such, nevertheless status was also central to the test. Wilden Pump required the court to hold that legal professional privilege only applied, apart from statute and an exceptional case, to communications with a member of a relevant legal profession.

As for the argument under Article 8, while that provision guaranteed protection for correspondence with a lawyer, it could not be taken to require the extension of that privilege to communications with any other person who might be asked to give legal advice:

It does not seem to me to follow from the clear acceptance that the exercise of the right of privileged and confidential communication with a lawyer is protected by article 8, that the same article protects communications for obtaining legal advice from someone other than a member of the legal profession.

Given that the privilege represented a significant restriction on the powerful public interest in all relevant evidence being made available for the determination of legal proceedings, it was manifestly a matter of public policy what the bounds of the privilege should be. Article 8 conferred a qualified right. It seemed plain that a rule which limited legal professional privilege to communications with a member of a relevant legal profession complied with the requirements of that article. If the LPP rule were to be regarded as extending, without statutory help or definition, to the seeking and giving of advice from and by professionals other than lawyers, subject to some criterion as to the status and qualification of the adviser, then the scope of the rule would be lamentably uncertain, and that this in itself might fail to satisfy the human rights test of being “in accordance with law”. The rule as currently interpreted had the important benefit of certainty . It was for Parliament and not the courts to formulate an appropriate extension of the scope of the privilege to accountants.

Sign up to free human rights updates by email, Facebook, Twitter or RSS

Read more


1 comment;

  1. Mark Smith says:

    I believe the Legal Professional Privilege is applied incorrectly by most lawyers.

    1. LLP can be lost (waived) if the information is shared with others.
    2. Reasonable suspicion of illegality or misrepresentation
    3. LLP will not cover communications made to further a criminal purpose ie to enable a client to commit crime or fraud. This applies whether or not the lawyer is aware of the wrong doing.
    4. Litigation Privilege applies when litigation is underway or anticipated. There must me a real prospect of litigation, a real likelihood, not just fear or possibility.
    5. Litigation privilege, it must be created for the dominant purpose of obtaining legal advice on the litigation.
    6. Pre Existing documents will not become privilege just by being passed over to the lawyer.
    7. Legal Advice privilege it will only cover confidential communications between client and lawyer made for dominant purpose of seeking or giving legal advice.
    8. In the context of litigation the lawyer cannot mislead the court by “Cherry Picking” the most favourable parts and claiming LLP over the rest.

Comments are closed.

Welcome to the UKHRB

This blog is run by 1 Crown Office Row barristers' chambers. Subscribe for free updates here. The blog's editorial team is:
Commissioning Editor: Jonathan Metzer
Editorial Team: Rosalind English
Angus McCullough QC David Hart QC
Martin Downs
Jim Duffy

Free email updates

Enter your email address to subscribe to this blog for free and receive weekly notifications of new posts by email.




Aarhus Abortion Abu Qatada Abuse Access to justice adoption AI air pollution air travel ALBA Allergy Al Qaeda Amnesty International animal rights Animals Anne Sacoolas anonymity Article 1 Protocol 1 Article 2 article 3 Article 4 article 5 Article 6 Article 8 Article 9 article 10 Article 11 article 13 Article 14 article 263 TFEU Artificial Intelligence Asbestos Assange assisted suicide asylum asylum seekers Australia autism badgers benefits Bill of Rights biotechnology blogging Bloody Sunday brexit Bribery British Waterways Board care homes Catholic Church Catholicism Chagos Islanders Charter of Fundamental Rights child protection Children children's rights China christianity citizenship civil liberties campaigners civil partnerships climate change clinical negligence closed material procedure Coercion Commission on a Bill of Rights common law communications competition confidentiality consent conservation constitution contact order contact tracing contempt of court Control orders Copyright coronavirus coronavirus act 2020 costs costs budgets Court of Protection covid crime criminal law Cybersecurity Damages data protection death penalty defamation DEFRA deportation deprivation of liberty derogations Detention Dignitas diplomacy diplomatic relations disability disclosure Discrimination disease divorce DNA domestic violence duty of care ECHR ECtHR Education election Employment Environment Equality Act Equality Act 2010 Ethiopia EU EU Charter of Fundamental Rights EU costs EU law European Convention on Human Rights European Court of Human Rights European Court of Justice evidence extradition extraordinary rendition Facebook Facial Recognition Family Fatal Accidents Fertility FGM Finance foreign criminals foreign office foreign policy France freedom of assembly Freedom of Expression freedom of information freedom of speech Gay marriage gay rights Gaza Gender genetics Germany Google Grenfell Gun Control hague convention Harry Dunn Health HIV home office Housing HRLA human rights Human Rights Act human rights news Human Rights Watch Huntington's Disease immigration India Indonesia injunction Inquests insurance international law internet inuit Iran Iraq Ireland islam Israel Italy IVF ivory ban Japan joint enterprise judaism judicial review Judicial Review reform Julian Assange jury trial JUSTICE Justice and Security Bill Law Pod UK legal aid legal aid cuts Leveson Inquiry lgbtq liability Libel Liberty Libya lisbon treaty Lithuania local authorities marriage Media and Censorship mental capacity Mental Capacity Act Mental Health military Ministry of Justice modern slavery morocco murder music Muslim nationality national security naturism neuroscience NHS Northern Ireland nuclear challenges nuisance Obituary ouster clauses parental rights parliamentary expenses scandal patents Pensions Personal Injury physician assisted death Piracy Plagiarism planning planning system Poland Police Politics Pope press prison Prisoners prisoner votes Prisons privacy procurement Professional Discipline Property proportionality prosecutions prostituton Protection of Freedoms Bill Protest Public/Private public access public authorities public inquiries quarantine Radicalisation refugee rehabilitation Reith Lectures Religion RightsInfo right to die right to family life Right to Privacy right to swim riots Roma Romania round-up Round Up Royals Russia saudi arabia Scotland secrecy secret justice Secret trials sexual offence shamima begum Sikhism Smoking social media social workers South Africa Spain special advocates Sports Standing starvation statelessness stem cells stop and search Strasbourg super injunctions Supreme Court Supreme Court of Canada surrogacy surveillance sweatshops Syria Tax technology Terrorism The Round Up tort Torture travel treason treaty accession trial by jury TTIP Turkey Twitter UK Ukraine universal credit universal jurisdiction unlawful detention USA US Supreme Court vicarious liability Wales War Crimes Wars Weekly Round-up Welfare Western Sahara Whistleblowing Wikileaks wildlife wind farms WomenInLaw Worboys wrongful birth YearInReview Zimbabwe


This blog is maintained for information purposes only. It is not intended to be a source of legal advice and must not be relied upon as such. Blog posts reflect the views and opinions of their individual authors, not of chambers as a whole.

Our privacy policy can be found on our ‘subscribe’ page or by clicking here.

%d bloggers like this: