Court Of Appeal Rejects Appeal For Extension Of Legal Privilege To Accountants

The Court of Appeal has given its judgment1 in the appeal by Prudential Plc ("Prudential") seeking judicial review in respect of the application of legal professional privilege ("LPP") to advice on legal matters relating to tax which had been obtained from their accountants.

Prudential's application arose in the context of notices served by HMRC under section 20 of the Taxes Management Act 1970 requiring the production of documents. In an earlier briefing note last October, we reviewed the High Court judgment which rejected Prudential's application. The Law Society and the Institute of Chartered Accountants in England and Wales ("ICAEW") intervened in the proceedings.

Before the Court of Appeal, Prudential argued that it was really the function of the adviser that mattered, rather than its status. Giving the leading judgment in the Court of Appeal, Lloyd LJ rejected that argument and found that status as well as function was necessary to LPP. He agreed with Charles J in the...