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Legal professional privilege ‘fight’ continues, says ICAEW chief

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The continuing restriction of legal professional privilege (LLP) is ‘unprincipled and anti-competitive’ for individuals and businesses, ICAEW chief executive Michael Izza said after the Supreme Court held last week that LPP does not extend to professional people other than lawyers.

‘Though it’s undeniably disappointing news, the decision does not mean our fight is over,’ Izza said in response to the decision in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another. Lord Neuberger said the question whether LPP should be extended to cases where legal advice is given by professional people who are not qualified lawyers raised ‘questions of policy which should be left to parliament’.

Law Society chief executive Desmond Hudson said a lawyer's duties and responsibilities to a client and to the courts were not available ‘on a pick-n-mix basis’.

‘The relationship between a solicitor or barrister and his or her client is a precious human right, tested and refined by centuries of common law,’ Hudson added. ‘LPP supports the process of law, speeding the conviction of the guilty and securing the acquittal of the innocent.'

The Lawyer quoted Osborne Clarke partner Peter Clough as saying that tax accountants would be 'crying into their soup’ while tax lawyers would be ‘dancing in the streets’ following the decision.

‘The case presents a clear-cut choice for clients: if you want confidential tax advice, you’re better off going to a law firm,’ Clough said.

LPP gives communications between lawyer and client absolute confidentiality, the Law Society noted, so that the advice cannot be disclosed to the court or third parties without the client’s consent. The Law Society had intervened in the case after Prudential asked the court to declare that LPP also protected the advice given by its accountants PwC in relation to a marketed tax avoidance scheme.

Izza said businesses should be able to seek the best professional advice on the same terms ‘whether from lawyers, accountants or indeed other appropriately qualified professionals’.

He added: ‘The way in which legal services are provided is changing as a result of the Legal Services Act with the creation of multi-disciplinary practices. As a matter of urgency, parliament needs to find a way to resolve how issues such as LPP are addressed within these new structures.’