05 June 2013

Legal professional privilege – if it ain’t broke, don’t fix it

We progress our discussion on the English Court of Appeal's decision on legal professional privilege in R (Prudential plc) v Special Commissioners of Income Tax now that the English Supreme Court has handed down its decision on the appeal.

Legal professional privilege – if it ain’t broke, don’t fix it

As a quick refresher, legal professional privilege (LPP) applies where people seek legal advice (legal advice privilege) or where there are court or tribunal proceedings (litigation privilege).  If LPP applies then the communication which takes place between clients and their lawyers is protected from disclosure.  It sometimes happens that clients are content to disclose material even though it is protected by LPP, but the privilege belongs to the client (not the lawyer) and so can only be waived by the client.  The LPP principle is an important aspect of the rule of law because it allows clients to speak freely with their lawyers, without concern that those communications may later be disclosed.

In the Prudential case, the Court of Appeal had been asked to decide whether or not LPP applied to non-lawyers providing advice on law - in that case, accountants advising on tax law. The Court of Appeal's decision was unambiguous: LPP only applies to qualified lawyers and not accountants. 

Prudential appealed to the Supreme Court which recognised that there is a strong argument for extending legal advice privilege to non-lawyers, given the commercial reality of the modern world where non-lawyers frequently give legal advice.  However, the Supreme Court affirmed the Court of Appeal's decision that privilege should not be extended to non-lawyers.  Three reasons were given for this:  (i) that to do so would create uncertainty in relation to what is presently a well-understood principle; (ii) the change was a change in policy which was not a change for the courts to make but Parliament, (iii) Parliament has already granted specific statutory exceptions where it has considered it appropriate to do so, for example in relation to trade mark attorneys. 

The Prudential decision concerned legal advice privilege and not litigation privilege.  In relation to litigation privilege, this does cover communications with and documents created by non-lawyers where those communications were for the dominant purpose of litigation.  Even so, the message from Prudential is clear: businesses should take careful steps to ensure that privilege is recognised and maintained.

The decision means that businesses continue to face difficulties if they wish to involve non-legal advisers such as tax advisers, accountants, restructuring specialists and the like to give legal advice.  Information shared with non-lawyers for the purpose of getting such advice is at risk of being disclosed in any later litigation or regulatory action. 

Please note that this briefing is only intended to provide a very general overview of the matters to which it relates. It is not intended as legal advice and should not be relied on as such.

© Carey Olsen 2013

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