A recent ruling from the Supreme Court has confirmed that legal advice privilege is limited to advice given by lawyers.
Legal advice privilege
Legal Advice Privilege (“LAP”) protects certain communications and information passing between a solicitor or barrister and their client. It exists so that courts and other authorities cannot compel lawyers to pass on information provided by their client, nor can they compel clients to reveal the advice their lawyer provided.
LAP applies to “advice as to what should prudently and sensibly be done in the relevant legal context”, such as commercial and strategic advice, as well as advice directly relating to the law itself.
Should LAP extend to other professions?
On 23 January 2013, the Supreme Court ruled that LAP only applies to legal advice given by qualified lawyers, not, in this case, legal advice provided by an accountant (Prudential).
When considering whether to extend privilege to advice given by other professionals, the court recognised that it was not easy to justify limiting privilege to legal advice from lawyers, given that many other professionals commonly advise on legal issues. In fact, in the High Court, Prudential produced evidence that 90% of all tax advice in the UK is provided by professionals other than lawyers.
Despite this, the court concluded that LAP should not extend beyond traditional legal professions, providing three main reasons for its conclusion. First, it held that such an extension would lead to unacceptable uncertainty because it would be necessary for the courts to consider the qualifications of each profession seeking to claim privilege. Secondly, the court argued that the extent of privilege raises complex policy questions which are better dealt with by Parliament than the judiciary. Finally, the court held that Parliament had previously legislated in such a way which indicated that it had accepted that legal advice privilege is confined to lawyers.
Practical advice – make sure your communications are covered by LAP
- If you or your company requires legal advice, it would be prudent to involve a lawyer as soon as possible to ensure LAP applies to the advice given.
- A “client circle” should be set up so that the circulation of legal advice is restricted and the doubt reduced as to whether the recipients of the information are “clients”. The list of clients should be documented, for example in the letter of engagement with the lawyer.
- All steps should be taken to prevent the forwarding of the privileged information to those who are not deemed to be clients. Failure to prevent this will mean the forwarded documents are not privileged and any photocopies created for non privileged purposes may also not fall under LAP.
- All colleagues and employees should be informed of the importance of LAP and should be advised that the creation of documents and records which would not attract LAP should be kept to a minimum.
- Any documents created should be marked as “Privileged”. Although such a label is not conclusive, it strengthens the argument that the communication is privileged.
- All privileged documents should, where possible, be kept separate and readily identifiable from those which are non privileged. Any document that contains both privileged and non-privileged advice is not guaranteed to be covered by LAP. Particular care should be taken when sending emails and when creating other internal documents which discuss privileged information. You should consider splitting privileged and non-privileged information out into separate documents wherever possible. For example, when preparing board minutes it is advisable to produce two sets of minutes (one dealing with privileged information and one dealing with any non privileged information).
Lord Sumption dissented in the Prudential case, arguing that privilege is “conferred in support of the client’s right to consult a skilled professional legal adviser, and not in his right to consult the members of any particular professional body”. Lord Clarke agreed, stating that he hopes “the whole issue will be considered by Parliament as soon as is reasonable practicable”. Unsurprisingly, Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales also said that parliament must find a way to resolve professional privilege for multi-disciplinary practices “as a matter of urgency”. Izza described the current LAP application as “unprincipled and anti-competitive for individuals and businesses who we believe should be able to seek the best professional advice upon the same terms whether from lawyers, accountants or indeed other appropriately qualified professionals”.
Despite the apparent mood for change regarding LAP, the government rejected a proposal made in 2001 by the Director General of Fair Trading that LAP be extended to other professions. Given this prior rejection, the extension of LAP is unlikely to be an issue at the top of Parliament’s agenda.
It seems, therefore, that lawyers can breathe easy knowing that they are in a more privileged position than other professions, even if that privilege is in a slightly less glamorous area than they would have hoped.
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