UK: At Least For Now, Legal Advice Privilege Is Protection That Can Only Be Provided By Lawyers

Last Updated: 12 February 2013
Article by Lucy Wicksteed

On 23 January the Supreme Court handed down its judgment in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1, in which it dismissed an appeal brought by Prudential plc and Prudential (Gibraltar) Ltd (together "Prudential") by a majority of 5 to 2.

By dismissing the appeal, the Supreme Court confirmed it is the "who" that is giving the advice, rather than the nature of the advice being provided, that is the determining factor as to whether confidential communications attract legal advice privilege ("LAP"). The significance of the issue in debate was highlighted by the number of parties which intervened, the Law Society, the General Council of the Bar, the Legal Services Board, the AIPPI UK Group (the leading group for research into, and formulation of policy for, the law relating to the protection of intellectual property) and the Institute of Chartered Accountants, and the fact that the Supreme Court was made up of 7 Justices rather than the usual 5.


In 2007 Prudential were asked by the tax authorities to make available documents that related to transactions made under a Pricewaterhouse Coopers ("PwC") marketed tax avoidance scheme. Prudential sought to withhold some of these documents, as they argued those documents attracted LAP by virtue of them comprising legal advice from PwC to Prudential. Notices requiring disclosure were then served on Prudential under the Taxes Management Act 1970.

Prudential issued an application for judicial review. It was common ground between the parties that had the same advice been provided by lawyers rather than accountants, it would have attracted LAP. Prudential argued that it was the nature of the advice given rather than by whom it is given that should govern the rules of LAP. The tax authorities maintained that common law only permitted advice from lawyers to be protected. Prudential's application was dismissed in the first instance in 2009 and their appeal was dismissed by the Court of Appeal in 2010.

The Supreme Court's Decision

Lord Neuberger gave the leading judgment and although he thought there was "a strong case in terms of logic for allowing this appeal" he gave three connected reasons why the appeal should be dismissed. These reasons were:

  • That the consequences of allowing the appeal were hard to assess, and would move LAP from being a "clear and well understood principle" to uncertainty;
  • Whether the extent of LAP should be extended to professional people that are not qualified lawyers was a question of policy, which should be left to Parliament; and
  • Legislation enacted by Parliament relating to privilege suggested that it would be inappropriate for the courts to intervene.

It was stressed by Lord Neuberger that it is universally believed that LAP only applies to advice given by members of the legal profession. He argued that if the appeal was permitted the inevitable result would be claims that LAP applied to advice given by numerous professional people (such as town planners), extending far beyond accountants. As the provision of legal advice from other professionals often does not represent the entirety of the advice, there would therefore not only be uncertainty as to whose advice can constitute LAP but there would be further uncertainty as to how to deal with documents that contain both legal and non-legal advice.

Lord Neuberger argued that legislation indicated that an extension of LAP could only be made by Parliament. Legislation had been introduced by Parliament to extend the principle to legal advice provided by patent attorneys, trade mark agents and licensed conveyancers. Details of proposals made to and rejected by Parliament to extend LAP to accountants were examined by Lord Neuberger, with the conclusion being that the appeal was a matter for Parliament to decide upon.

Lord Sumption, dissenting, argued strongly that the common law had only provided for advice from lawyers to attract LAP because up until the 1960s it was only lawyers that would provide legal advice. In today's market place however, legal knowledge is required by several professions and they provide advice of a legal nature to their clients in the course of their dealings. He noted that the courts have recently considered themselves able to extend privilege to cover salaried legal advisers and foreign lawyers, and therefore could do the same in this case. Lord Sumption stressed that LAP belongs to the client, not the lawyer, and therefore it should be extended to support the client's right to consult a skilled professional legal adviser (whether that adviser belongs to a legal professional body or another type professional body).


The position taken by the Supreme Court has provided certainty that it is only the advice of a lawyer that can attract LAP. At a time where a new costs regime is being implemented into the courts, this certainty should at least provide some stability for litigators as to what is required to be disclosed and prevent further disputes and litigation. The decision ultimately underlines the importance for clients to involve lawyers in all matters where protection from disclosure is considered advantageous. This will remain the position until Parliament addresses the issue - which may be soon if the requests of the Supreme Court are listened to.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Lucy Wicksteed
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