The privilege of privilege: What the Supreme Court ruling means

by Calum Fuller

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25 Jan 2013

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OSTENSIBLY, very little has changed off the back of the Supreme Court's ruling that legal professional privilege cannot apply to any other profession other than law.

The privilege sees any professional discussions between lawyers and their clients kept confidential.

At its most basic level, there is, for the moment, no prospect of any discussions taking place between an accountant and one of their clients under the cloak of privilege. Equally, there is every chance that a client going to a law firm and receiving advice on the same issue in the full knowledge the discussion will go no further. In that sense, it's very much as-you-were, with the apparent anomaly still in place. It's a situation any practitioner will tell you is an awfully long way from satisfying.

Yet there are other issues, too. For some, there is the continuing problem that a small, but significant, portion of prospective clients who subscribe to the fallacy that they should always seek advice from lawyers instead of accountants, simply due to privilege.

It's a frustration with whichmany are familiar, says PKF partner John Cassidy, not least because it's at best a half-truth. For those, like Cassidy, in tax investigations, advice is covered by a statutory privilege in the Proceeds of Crime Act, yet they spend huge amounts of time explaining just that on a regular basis. Then there are the clients who go straight to the lawyers without considering accountants in the first place. Ultimately, many say, it has the effect of restricting accountants' trade.

For the moment, those issues will persist, but there is a sliver of hope for accountants affected. Indeed, that Lord Justice Neuberger and Lord Justice Sumption recognised the strength of Prudential's case in their final judgment demonstrates is encouraging, although the fact it is being left to parliament to decide will at the very least mean a lengthy wait.

It is certain, though, that having come this far, the ICAEW will pursue the extension doggedly, lobbying for statutory change, but quite which avenue the institute will go down next remains unclear.

Generating the political willpower in parliament will be a tall order for the institute. Indeed, even getting the forum on which to state its case could prove difficult – particularly if the campaign to protect the title of ‘accountant' is any yardstick to go by.

That said, it would be premature to say it is a cause that has been kicked into the long grass – that remains to be seen.

Practitioners, however, should not set their hearts on seeing their profession – and, indeed, others – brought into the privilege's scope. With some firms looking towards alternative business structures (aka multi-discplinary practices), where lawyers and accountants can both be partners, the situation will be messy.

The slog starts here, but for now, it's a case of make do and mend for practitioners.

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