Accountancy Age, Accountancy Age, Thursday 22 July 2010 at 00:30:00

The battle is raging over extending legal privilege to tax adviser, butlawyers aren't giving up their special status without a fight


Every tax adviser in the country is all too well aware of the advantages thatlawyers have when offering the same advice offered by their counterparts inaccountancy firms and tax practices. Lawyers have legal professional privilege ?accountants and tax advisers do not. It means that the conversations betweenlawyers and their clients can remain confidential while discussion betweensaccountants and their clients can be forced out into the open by the courts.

But there is now a battle raging for privilege. Last week saw a gathering inwhich lawyers for the ICAEW attempted to convince the Court of Appeal thatprivilege should extend to accountants. Should they win, the implications wouldbe enormous. That?s why so much energy and expense is being expended by theinstitute in pressing its argument.

Accountants, of course, anticipate a great step forward for the profession.Lawyers, on the other hand, fear another profession stepping on their turf butalso the possibility that the court could decide that rather than moreprivilege, what the world needs is lawyers to have less privilege.

Needless to say, Accountancy Age backs extending privilege enthusiastically.The arguments are on the opposite page but the essential reason is that taxadvice from accountants has reached such a degree of professionalism andexpertise that it is now ludicrous to assume that there is a distinction betweenthe two professions. To be a tax adviser requires an expert legal knowledge. Youdon?t have to be a qualified lawyer to have that and the days of the closed shopof privilege should be drawing to a close.

The argument that lawyers? privilege should be reduced to create a levelplaying field seems to lack a public interest. That would be to reduce theoverall sum of confidence between advisers and clients. Far better to achieveequality by improving the legal position of accountants.

But do not expect a quick resolution. If the institute and accountants want asuccessful outcome the case may have to be pursued all the way to the EuropeanCourt. Certainly many feel it?s heading that way.

And even if the courts accept the argument in principle the details will needworking out.

But here is a critical issue in itself. For if privilege was extended to, say,accountants qualified with CCAB bodies you have, in effect, a backdoor route toprotecting the use of the term accountant.

In a sense that?s an even bigger issue for the profession which has struggledwith the problem that anyone, qualified or not, can call themselves anaccountant. Once again, this is different for lawyers. Only those who arequalified can use the term.

The battle over privilege, therefore, could be a much bigger campaignaltogether.