redacted

Another new Supreme Court decision (Prudential plc & Anor, R (on the application of) v Special Commissioner of Income Tax & Anor) looks at the extent of legal advice privilege, and in particular whether parties to disputes can be ordered to disclose legal advice from advisers such as accountants.

The advice in question in this case related to a tax avoidance scheme devised by PricewaterhouseCoopers which was taken up by the Prudential group of companies. HMRC sought disclosure of documents relating to the scheme from Prudential, who refused, claiming that the documents were covered by legal advice privilege, and so did not have to be disclosed. The point was considered by a Special Tax Commissioner, who ordered disclosure, and then by the Administrative Court and the Court of Appeal, both of which considered that the documents were not privileged. Prudential then took the case to the Supreme Court, who, by a majority, agreed. While there was some logic in the argument that legal advice given by non lawyers should be protected in the same way as legal advice given by legally qualified advisers, the limitation was an historical one they were not prepared to depart from:

If we were to allow this appeal, we would therefore be extending [legal advice privilege] beyond what are currently, and have for a long time been understood to be, its limits. Indeed, we would be extending it considerably, as the issue cannot simply be treated as limited to the question whether tax advice given by expert accountants is covered by [legal advice privilege]. While that is the specific question between the parties, it is just a subset, no doubt an important subset, of a much larger set. To concentrate on tax advice given by accountants would be wrong, because it would ineluctably follow from our accepting Prudential’s argument that legal advice given by some other professional people would also be covered

This decision is a particularly significant one for employment law, where there are many providers of employment law advice who are not legally qualified. An employer who seeks advice from a consultant who does not have a legal qualification, perhaps before dismissing an employee, cannot then rely on legal advice privilege to avoid disclosure of that advice in subsequent litigation. That could be very damaging, for instance if the employer failed to act on advice given, or the documents reveal damaging evidence.

At Canter Levin & Berg our employment law services, including CLB Employment Solutions, are provided exclusively by specialist employment solicitors so that all our legal advice enjoys the protection of legal professional privilege from disclosure. It is easy to think of many scenarios in which this can benefit our subscribers and, perhaps more pertinently, the absence of which (as is the case with most employment law support services) could be positively harmful.