Today Prudential is back in court trying to win legal professional privilege for accountants. The company is doing this at the Court of Appeal where it is appealing a decision which rejected the Pru’s claim that it should not be forced to hand over documents to HM Revenue & Customs because they relate to advice given by the company’s accountants, which should be protected by legal privilege.
This is an enormous issue for accountants. No government is likely to legislate on the issue, the only way to establish legal privilege for accountants is to set a precedent in court. So, even as I write this, the ICAEW is in court arguing in favour of accountants.
A win would create a whole new professional world for accountants offering legal advice on tax issues and place them on a level playing field with lawyers who already have such privilege established in common law.
The odds on a win for accountants must be slim though. However, there is room to hope. The judge who originally rejected the Pru’s claim expressed some sympathy with the position of accountants. He accepted that they offer legal advice – an important step in itself. He also commented that there was “force” in the argument that a “level playing field” between lawyers and accountants should come about.
Privilege is an important constitutional right because it enables a client to obtain advice in full confidence – a feature that is essential if a legal process is to function fairly.
There is also a market issue. Lawyers currently have an unfair advantage and we know of instances where law firms have used legal privilege as part of their marketing, much to the annoyance of senior people at HM Revenue & Customs.
The argument needs to be won. For the profession it must. Tax advice has come a long way. Many tax advisers are fully equipped to offer such advice.
To my mind the argument in principle is already won. The big problem is how in practical terms would privilege be restricted to those who are properly entitled to it. There would be no sense in a blanket privilege for all accountants. It takes no great struggle to see the complexities involved in that question and yet it is a problem that needs a solution if privilege is to be appropriately applied. So though we may be hearing from the Court of Appeal soon, I fear there is still a long way to go on before some accountants can enjoy the same rights offered to their colleagues in law firms. But make no mistake. they have been underprivileged for too long.
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