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First appeared in Informer: Real Estate Newsletter - Spring 2013
The Supreme Court has handed down its hotly-anticipated judgment in the case of R. (on the application of Prudential Plc) v Special Commissioner of Income Tax which sought to extend the principle of ‘legal advice’ privilege beyond the legal profession.
Legal advice privilege has been in place for over 100 years. It makes those communications between clients and their lawyers in which they receive legal advice ‘privileged’ (i.e. they cannot be compelled to disclose them to third parties in proceedings). The principle behind legal advice privilege is to enable clients to speak freely with their lawyers and receive the fullest possible advice.
Prudential Plc brought this action in an attempt to resist disclosing to HM Revenue & Customs legal advice it had received from its accountants PricewaterhouseCoopers LLP. The Supreme Court considered whether legal advice privilege should extend to advice received from advisers outside the legal profession, and decided by a majority of 5:2 that it should not.
While many professional advisors such as accountants do give their clients legal advice, the Supreme Court declined to extend legal advice privilege on the basis that the question had already been considered and rejected by the Government. Any changes to legal advice privilege must therefore be decided by Parliament.