UK Supreme Court disallows the extension of privilege

UK Supreme Court disallows the extension of privilege


Author: Andy Pratley

In R (on the application of Prudential plc & anor) v Special Commissioner of Income Tax & anor, Supreme Court confirms legal advice privilege only applies to advice given by lawyers and cannot be claimed in respect of tax advice provided by accountants.  

What is legal advice privilege?

Legal advice privilege (legal privilege) attaches to all confidential communications passing between a client and its lawyers for the purpose of giving or receiving legal advice. Privileged communications remain confidential and will not be disclosed without the client's consent.

How did the Supreme Court reach its decision?


In November 2007, Prudential plc was served with statutory notices to produce specified documents relating to its tax affairs. The documents contained advice that had been provided by its accountants in relation to a tax avoidance scheme.

Prudential sought to withhold the documents on the basis that the advice was covered by legal privilege. It applied to the Court to review the lawfulness of the request.

Prudential's application was rejected by both the High Court and the Court of Appeal on the basis that legal privilege was restricted to advice provided by legal professionals. It did not extend to other professions, even if the very same advice would have been privileged if provided by a lawyer.

The question before the Supreme Court was therefore whether or not legal privilege extends, or should be extended, to legal advice provided by someone other than a legal professional and, if so, how far.

The importance of the appeal was clear from the number of bodies given permission to intervene, including The Law Society, the Institute of Chartered Accountants in England and Wales, and the Bar Council.


Lord Neuberger gave the lead judgment for the majority. Although he recognised a 'strong case in terms of logic' for extending privilege, the Supreme Court dismissed the appeal on a majority of five to two.

In the judgment emphasis was placed on the historical significance of privilege as being intrinsically linked to the legal profession. A key concern was that if legal privilege was extended to other professions, there would be no clear line defining which professions were and were not included.

Lord Neuberger felt that to permit Prudential's case would raise multiple unanswered questions: What is a profession for the purposes of legal privilege? Do members of the profession ordinarily provide legal advice? If so, in which areas of law? Such questions would lead to confusion and ambiguity, leaving judges to grapple with such questions on a regular basis.

It was considered that the extension of privilege to other professionals should be a decision for Parliament to make. The decision would require a careful balancing exercise of the circumstances in which the just and fair assessment of tax can be lawfully restricted by the withholding of documents by the taxpayer. It was therefore a task suited to Parliament, with its 'wide powers of inquiry and consultation and its democratic accountability'.

Practical implications

The preservation of the status quo is unlikely to be problematic for most tax payers. The truth of the matter is that the majority of tax advice is provided by tax advisers, not lawyers; 90%, according to evidence presented by Prudential in the High Court.

Although the decision of the Supreme Court does not change the law, the decision does have practical implications.

The message for commercial clients is clear: to attract legal privilege, legal advice must come from a lawyer.

If the legal advice comes from another professional, such as an accountant, actuary, surveyor or engineer, it will not be privileged and communications may still be wholly disclosable.

It is important that legal advisers keep communications regarding commercial advice separate from communications containing legal advice, which should be marked 'confidential and privileged', and usually filed separately. There is a risk that documents containing both legal and commercial advice may need to be disclosed.

If you are in any doubt about what to do or how to ensure the advice you receive is protected by legal privilege, please get in touch.