Tom Stenner-Evans
Posted on 24 Jan 2013

A word of warning for clients!

The Supreme Court has recently ruled in the case of R (on the application of Prudential plc) v Special Commissioner of Income Tax, confirming that legal professional privilege does not extend beyond the traditional professions of solicitors, barristers and chartered legal executives.

Privilege entitles one party to withhold evidence from production to a third party or the court and covers the confidential advice given by lawyers to their clients. The purpose is to enable a client to place unrestricted confidence in their lawyer, who in turn can provide full and frank legal advice.

In this particular case, Prudential sought to claim that the advice given by accountants in relation to a tax avoidance scheme was privileged. Although the Supreme Court acknowledged that an extension on the rules of privilege seemed logical, particularly given the expansion in the provision of legal services, it decided that any such extension should more properly be provided for by Parliament.

It could be that we see future change in this area. However, for the time being at least, HR professionals, particularly consultants, should be cautious about the advice they give to their clients or members of their team. Such advice won’t be protected by privilege and you could be required to disclose it to an employee or third party, or to the Tribunal if a claim were issued. Following the Supreme Court’s ruling in the Prudential case, it would be advisable to involve solicitors early on in potentially contentious matters, to ensure you have adequate protection in place.