Protecting the privilege

Protecting the privilege

The battle is raging over extending legal privilege to tax adviser, but lawyers aren't giving up their special status without a fight

Leader: Every tax adviser in the country is all too well aware of the advantages that lawyers have when offering the same advice offered by their counterparts in accountancy firms and tax practices. Lawyers have legal professional privilege – accountants and tax advisers do not. It means that the conversations between lawyers and their clients can remain confidential while discussion betweens accountants and their clients can be forced out into the open by the courts.

But there is now a battle raging for privilege. Last week saw a gathering in which lawyers for the ICAEW attempted to convince the Court of Appeal that privilege should extend to accountants. Should they win, the implications would be enormous. That’s why so much energy and expense is being expended by the institute in pressing its argument.

Accountants, of course, anticipate a great step forward for the profession. Lawyers, on the other hand, fear another profession stepping on their turf but also the possibility that the court could decide that rather than more privilege, what the world needs is lawyers to have less privilege.

Needless to say, Accountancy Age backs extending privilege enthusiastically. The arguments are on the opposite page but the essential reason is that tax advice from accountants has reached such a degree of professionalism and expertise that it is now ludicrous to assume that there is a distinction between the two professions. To be a tax adviser requires an expert legal knowledge. You don’t have to be a qualified lawyer to have that and the days of the closed shop of privilege should be drawing to a close.

The argument that lawyers’ privilege should be reduced to create a level playing field seems to lack a public interest. That would be to reduce the overall sum of confidence between advisers and clients. Far better to achieve equality by improving the legal position of accountants.

But do not expect a quick resolution. If the institute and accountants want a successful outcome the case may have to be pursued all the way to the European Court. Certainly many feel it’s heading that way.

And even if the courts accept the argument in principle the details will need working out.
But here is a critical issue in itself. For if privilege was extended to, say, accountants qualified with CCAB bodies you have, in effect, a backdoor route to protecting the use of the term accountant.

In a sense that’s an even bigger issue for the profession which has struggled with the problem that anyone, qualified or not, can call themselves an accountant. Once again, this is different for lawyers. Only those who are qualified can use the term.
The battle over privilege, therefore, could be a much bigger campaign altogether.

Related Articles

Privileged status: no change on legal advice privilege

Accounting Standards Privileged status: no change on legal advice privilege

6y Andrew Howell
ICAEW: Legal privilege rules "unsustainable"

Administration ICAEW: Legal privilege rules "unsustainable"

8y Kevin Reed, Writer
Court battle rages over legal privilege for tax advisers

Corporate Governance Court battle rages over legal privilege for tax advisers

8y Kevin Reed, Writer