UK Supreme Court Declines To Recognize Legal Advice Privilege For Accountants

In a watershed ruling that is sure to have implications throughout Canada, the UK Supreme Court has held that legal advice (or "solicitor-client") privilege does not attach to communications between accountants or other non-legal professionals and their clients. The decision in Prudential holds this to be the case even where the communications involve legal advice which the professional person is qualified to give, and that advice is given in circumstances where it would be privileged were it provided by a lawyer.


Prudential arose from a judicial review application in which the appellants challenged the validity of statutory disclosure notices issued to them by an inspector of taxes. The notices required the appellants to disclose certain documents in connection with a series of tax avoidance transactions that had been designed and implemented for them by the accounting firm PricewaterhouseCoopers ("PwC"). The appellants argued that the documents were exempt from disclosure, on the ground they related to the seeking and giving of legal advice by PwC in connection with the transactions.

The judicial review application was dismissed by Charles J. at first instance. He found that even though the disputed documents would have attracted legal advice privilege ("LAP") and thus been excluded from disclosure if the advice had been provided by a member of the legal profession, no such privilege attached even to identical advice provided by a professional who was not a qualified lawyer. Charles J.'s ruling was affirmed by the Court of Appeal.

The Decision

The UK Supreme Court dismissed the appellants' appeal. Six sets of reasons were given by the seven-member panel, with Lord Neuberger delivering the leading judgment for the majority (concurred in by Lords Hope, Walker, Mance and Reed), and Lord Sumption writing a powerful dissent (concurred in by Lord Clarke).

Lord Neuberger began by briefly reviewing the key features of LAP, and observed that "it is universally believed that LAP applies only to communications in connection with advice given by members of the legal profession". (para. 29) He defined "members of the legal profession" for this purpose to include "members of the Bar, the Law Society, and the Chartered Institute of Legal Executives (CILEX) (and, by extension, foreign lawyers)". According to Lord Neuberger, allowing the appeal would involve a considerable extension of LAP beyond its currently understood limits, since it would mean that legal advice by...

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