Legal Professional Privilege does not apply to any other profession other than a qualified lawyer

In October 2009, Prudential Plc (“Prudential”) sought to establish that the principle of Legal Professional Privilege (LPP) extended to tax planning advice provided by an accountant to a client. The High Court rejected Prudential's argument and held that previous case law did not provide existing authority that clients of accountants and other professions (apart from lawyers) have a right to claim LPP on the basis of legal advice privilege.

A year later, in October of this year, Prudential applied to the Court of Appeal for leave to appeal to the Supreme Court.

In addition to Prudential, this case also involved a number of ‘interveners’ which included the Institute of Chartered Accountants in England and Wales as well as the General Council of the Bar and the Law Society.

The argument before the Court of Appeal was that the rationale which lies behind the 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 sought from and given by a solicitor or barrister.

Legal Counsel for Prudential submitted that as LPP is a judge-made rule, the courts were open to declare the law by stating that LPP is available as regards communications for obtaining or giving legal advice, whether or not the adviser is a lawyer. The Court was asked to consider whether it was bound by any previous case law decisions on the point and also to consider if statutory provision had been made in this area.

Drawing support from previous case law on LLP, Counsel's argument was 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 would not matter whether the adviser is a lawyer or is another appropriately qualified professional person giving legal advice”.

It was also argued that it was necessary to identify a suitable criterion for applying LPP to relevant and appropriate professionals other than lawyers; “the essence of LPP is that it applies, in principle, if the person from whom the legal advice is sought or by whom it is given is a member of a profession which has as one of its functions the giving of professional legal advice to clients, if the profession is recognised by the courts for that purpose, and the person in question is a member of a relevant professional body which make provision for maintaining proper standards by controlling entry and regulating the conduct of its members”

The Court of Appeal concluded that it was bound to hold that LPP does not apply, at common law; to any profession other than a qualified lawyer. It was not open to the court to hold that LPP applies outside the legal profession, except as a result of relevant statutory provisions. If LPP were to apply to other professions, serious questions would arise as to its scope and application. The Court considered the question “to which accountants should it apply, given that “accountant” does not itself denote membership of any particular body or the obligation to comply with any professional obligations” and concluded that such questions could only be answered by Parliament.

This judgment was not unexpected because the Court of Appeal is bound by precedent. Whilst a set-back, it provoked an examination of the whole area of LPP and it was a very necessary step to having the law in this area fully aired.

The full text of the case is available at http://www.bailii.org/ew/cases/EWCA/Civ/2010/1094.html