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UK Supreme Court Confirms Privilege Applies Only to Advice Provided by Members of The Legal Profession

The long-awaited decision in the Prudential case was handed down by the UK Supreme Court on the morning of Wednesday 23 January. 

R (on the application of Prudential plc and another) (Appellants) v Special Commissioner of Income Tax and another (Respondents) was heard by a full panel of seven law lords.  By a majority of five to two (Lords Clarke and Sumption dissenting), the UK Supreme Court dismissed the taxpayer’s appeal and confirmed the long-established principle that legal advice privilege (LAP) attaches only to advice provided by members of the legal profession.


The case concerned a “tax avoidance scheme” that had been marketed by an accountancy firm in 2004 to Prudential plc[1].  In the course of their enquiries into the effect of the planning in 2007, HM Revenue and Customs (HMRC) sought disclosure of certain transaction documentation.  The taxpayer refused to disclose the documents, asserting that they were covered by LAP, notwithstanding that the advice in respect of the planning had been provided by members of the accountancy profession rather than the legal profession. 

The matter came before the UK courts when the taxpayer sought judicial review of a direction from the Special Commissioners to disclose the transaction documentation to HMRC. 

The UK Supreme Court’s Decision

The fundamental question before the UK Supreme Court in this appeal was whether or not LAP attaches to advice provided by persons who are not members of the legal profession.  The UK Supreme Court has emphatically answered this in the negative.  Lord Neuberger, who gave the lead judgment for the majority based this decision on several key factors. 

Firstly, it is clear that in its capacity as a creature of the common (i.e. judge-made) law, LAP could have been afforded to advice provided by persons other than legal professionals but it was not.  In the 500 years since the principle was established, no decision of the English courts has disturbed this basic proposition; on the contrary, it has instead been affirmed repeatedly by learned judges of great distinction.  It is clear therefore that the UK Supreme Court felt that an extension of LAP to persons other than members of the legal profession could only be effected by way of statutory intervention by Parliament.

Secondly, the UK Supreme Court recognised that Parliament has legislated on several occasions on the assumption that LAP is restricted to advice given by members of the legal profession and that, moreover, Parliament has specifically rejected proposals (most recently in 2001) to extend LAP to the accountancy profession. 

Finally, Lord Neuberger expressed concern about the practical implications of extending LAP.  In particular, his Lordship was concerned that disturbing a principle that is so well-established and understood as LAP would lead to uncertainty in the minds of the very people LAP is intended to benefit (i.e. persons seeking legal advice) as to what professional advice they could definitively expect to be accorded LAP.  His Lordship also noted that, if LAP were to be extended, it was hard to see exactly where the line should be drawn and what criteria should be chosen for including or excluding a given profession from its ambit.  His Lordship asked for example whether or not town planners or engineers (both of whom have specialist legal expertise) should benefit from an enlarged LAP. 

Two of the judges involved in the cases gave dissenting decisions and would have extended LAP to the advice provided to the taxpayer.  Lord Sumption gave the lead dissenting judgment.  His judgment is impressively lengthy, but in essence boils down to an argument that extending LAP is within the discretion of the courts (as LAP was originally created by the courts) and that the UK Supreme Court should exercise that discretion because the advice provided to the taxpayer had a legal content.  It is unsurprising that this line of thinking did not find favour with the majority of the UK Supreme Court; it ignores the long history of the concept of LAP as currently understood today and failed to engage with the practical implications of extending LAP as identified by the majority.

Legal Advice Privilege: Where Are We Now?

It is now clear that LAP remains the preserve of advice provided by members of the legal profession[2] and will apply to all communications passing between clients and their solicitors when solicitors are acting in their professional capacity and the communication is made in connection with the provision of legal advice.  As LAP belongs to the client, solicitors are under an obligation to assert LAP (for example when dealing with requests from tax authorities for information about their clients) unless it is specifically waived by the client.  Moreover, LAP covers not only the advice provided by the solicitor, but also the client’s communication to the solicitor of the facts and circumstances on which the advice is to be based. 

Members of the public should therefore not only be assured that legal advice received from their solicitor will benefit from LAP; they can also be certain that advice that is not received from members of the legal profession will not be covered by LAP.  When advice is sought which a client desires should remain confidential, that advice should be sought only from members of the legal profession. 


LAP has, for around five centuries, been understood as attaching only to advice provided by members of the legal profession.  The decision of the UK Supreme Court not to extend the ambit of LAP is therefore as welcome as it is right.  It is clear that the UK Supreme Court was conscious that any penumbra of uncertainty around the precise extent of LAP could effectively neuter its value to members of the public seeking legal advice and the decision means LAP will continue to be a valuable and unique aspect of the client-solicitor relationship. 

As this is the highest domestic court of appeal, the point has now been put beyond any doubt in the absence of statutory intervention by Parliament.  This seems highly unlikely in view of the robust judgments given by the majority of the UK Supreme Court around the venerable nature of LAP and Parliament’s refusal even in recent history to extend its scope by way of statute.

© 2017 McDermott Will & Emery


About this Author

Matthew Herrington, Tax Attorney, McDermott Law Firm

Matthew Herrington is a partner in the law firm of McDermott Will & Emery UK LLP, based in our London office.  His practice covers a range of tax matters, including structured finance, M&A, investment funds, private equity and general lending.  Matthew also has experience of negotiating settlements with the UK tax authorities.  Matthew has a particular interest in cross-border tax matters and holds a qualification from the Chartered Institute of Taxation in international tax.  

44 20 7577 3497
James Ross, Corporate Commercial Tax Attorney, McDermott Will, Law Firm

James Ross is a partner in the law firm of McDermott Will & Emery UK LLP, based in its London office.  His practice focuses on a broad range of international and domestic corporate/commercial tax issues, including corporate restructuring, transfer pricing and thin capitalisation, double tax treaty issues, corporate and structured finance projects, mergers and acquisitions and management buyouts.

He has particular experience in advising US groups in the structuring of UK and European inbound investments and providing advice on technical issues in the context of revenue investigations and statutory audits.

+44 20 7577 6953