The recent judgement in the “Prudential” case re looked at the concept of legal advice privilege (LAP) and doesn’t bode well for those taking advice from non lawyers.
LAP applies to communications between lawyers and their clients made for the purpose of seeking or giving legal advice. The question was whether it could also apply to other professionals eg accountants and tax advisers. Unfortunately for Prudential, the Supreme Court refused to widen the definition. Thus for now any conversation between a client and another adviser (other than their lawyer) is not safeguarded. Not good news where for example in this case Prudential were taking advice on a tax avoidance scheme seeking to minimise the amount of tax payable to the HMRC.
This could directly affect the way advice is given by advisers to their clients. If decisions made in meetings were to later be challenged as unlawful, anything recorded could be used in evidence against the parties. Thus by not widening the scope of LAP, clients should think very carefully about the nature and context of discussion they are having with advisers especially around the area of tax advice.
On a more positive note, the judges invited Parliament to consider the issue and noted that the (failed) claimants had a ‘strong’ case. So the scene is set for an interesting future.
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