Queen’s Bench Division

Published November 10, 2009

Regina (Prudential plc and Another) v Special Commissioner of Income Tax

Rather than apply legal advice privilege to a wider range of professionals than lawyers, its application to advice given by lawyers should be restricted, on a review of the policy and the public-interest considerations that underlay legal professional privilege.

Mr Justice Charles so stated in a reserved judgment in the Queen’s Bench Division on October 14, 2008, when dismissing a claim for judicial review by Prudential plc and Prudential (Gibralter) Ltd, of two notices served under the Taxes Management Act 1970 by the Special Commissioner of Income Tax and HM Inspector of Taxes, dated November 16, 2007, to investigate a tax-avoidance scheme.

HIS LORDSHIP said that the claimants had advanced compellingly that accountants rather than solicitors now advised clients on many aspects of tax law; he added that clients of accountants had not been put off seeking their advice because accountants did not have the right to refuse to disclose that legal advice and related communications.

He also said that the conclusion underlying legal professional privilege, that there was a need for absolute confidentiality in respect of legal advice, might need revisiting.

If an adviser was to be put in a position to give fully and properly informed advice there was a need for full and frank disclosure.

The fact that there was no general right to refuse disclosure of the communications between client and professional adviser had not led to assertions by non-lawyers and their clients that full and frank discussion between them was inhibited.

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