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January 23, 2013

Supreme Court denies LPP accountant extension

The UK Supreme Court has ruled that Legal Professional Privilege (LPP) should not be extended to clients of non-legally qualified tax advisors, but suggests the matter should be looked at by Parliament.

LPP allows clients to provide information to lawyers knowing it cannot be passed to a third party without their consent, which the Institute of Chartered Accountants of England and Wales (ICAEW) had hoped to see extended to include accountants.

ICAEW chief executive Michael Izza called the current position on LPP "unprincipled" and "anti-competitive" for individuals and businesses the institute believe should be able to "seek the best professional advice upon the same terms whether from lawyers, accountants or indeed other appropriately qualified professionals".

"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."

The decision was as a result of the case heard in the Supreme Court in November 2012 of which ICAEW was among a number of interveners.

The Prudential case

Financial services group Prudential had earlier tried to use the court to extend the LPP rules for advice it had received from tax advisers PwC in an effort to block HM Revenue & Customs from obtaining information.In October 2010, the UK Court of Appeal unanimously confirmed that LPP does not apply to any other professionals except for qualified lawyers – solicitors and barristers. It also stressed the need for a clear and certain application of LPP pointing out that when applied to members of the legal profession acting in a professional capacity, clarity and certainty is currently sufficient.

Related articles

Law Society to intervene in Prudential legal privilege case

Prudential granted LPP for accountants appeal

Related link

Institute of Chartered Accountants of England and Wales

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