The Supreme Court has today handed down its much anticipated judgment in the case of R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1. The issue before the Court was whether legal advice privilege extends, or should be extended, so as to apply to legal advice given by accountants.

A seven member panel of the Supreme Court has held (by a majority of 5 to 2) that legal advice provided by accountants is not protected by legal advice privilege.

The majority (the President, Lord Neuberger, the Deputy President, Lord Hope, and Lords Walker, Mance and Reed) were of the view that any extension of legal advice privilege to professionals other than lawyers would extend legal advice privilege beyond what are currently, and have for a long time been, understood to be its limits. There are clear judicial statements of high authority to that effect. The current editions of textbooks on privilege and evidence, as well as more than one significant official report, have proceeded on this basis. The majority expressed concerns that extending legal advice privilege would be likely to lead to a clear and well understood principle becoming uncertain and that any such extension raised questions of policy which should be left to Parliament. Further, in circumstances where Parliament has previously legislated on the assumption that legal advice privilege only applies to advice given by lawyers, any extension is properly a matter for Parliament rather than the judiciary.

The minority (Lords Sumption and Clarke) considered that legal advice privilege extends to advice given by members of a profession which has as an ordinary part of its function the giving of skilled legal advice, and that recognising the privilege attaching to the legal advice of accountants would not be extending the scope of legal advice privilege. English law has taken a functional approach to legal advice privilege and the availability of legal advice privilege should depend on the character of advice which the client is seeking and the circumstances in which it is given, and not on the adviser’s status.

Patrick Goodall appeared for the Respondent (led by James Eadie QC, instructed by HMRC).

Bankim Thanki QCHenry King and Rebecca Loveridge appeared for the Bar Council, intervening (together with Ben Valentin of South Square Chambers, instructed by Field Fisher Waterhouse LLP).

Patricia Robertson QC appeared for the ICAEW, intervening (instructed by Simmons & Simmons LLP).

The Judgment is available at