Kevin Reed, Accountancy Age, Friday 16 July 2010 at 11:32:00

Prudential case concludes, with Law Society representation arguing thatprivilege is a unqiue status for lawyers' clients


Legal professional privilege (LPP) is a "unique status" for lawyers' clients,formed over centuries in connection with the administration of justice, theCourt of Appeal heard yesterday.

Sir Sydney Kentridge QC, representing the legal profession argued againstextending LPP beyond lawyers in the Prudential case, during closing argumentsyesterday..

The insurer is appealing a decision which found HM Revenue & Customs couldseize advice received from accountants.

Sir Sydney said privilege for the legal profession was "not adjunct" to thelegal system, but part of it.

"The power to discipline the legal profession was a power of the judges.They're officers of the court. That's what makes it different," said Sir Sydney.

He said accountants' duty of confidentiality to clients was not as strict aslawyers, citing the ICAEW's rules of disclosure.

He also suggested extending the scope of LPP would make it difficult to knowwhere the line ends. He said other regulated and certified professionals, suchas architects, might also believe they also have a right to LPP.

"Are you in a position to go through that exercise?" he said.

Sir Sydney also said extending LPP to tax advisers could impact on taxrevenues, the effect of which would be unquantifiable.

While other jurisdictions had allowed LPP for accountants, it was restrictedand not allowed for tax advice.

Prudential representative, Lord Pannick QC, said LPP has been extended toforeign lawyers, and there was no justification to distinguish between them andtax accountants.

He conceded that extending LPP to tax accountants could potentially open thedoor to other professions, but added: "[I'm] not submitting it's easy, but notimpossible. I'm saying accountants can meet the tough criteria".

LPP, he contended, was a principle to enable clients to be able to seek andobtain advice skilled in jurisprudence.

"We say LPP should be as extensive as the rationale behind LPP demands,"said Lord Pannick.

The judges' decisions on the case are expected after the summer.

Further reading:

Nodistinction between accountants or solicitors on tax advice