See the judgments being delivered via YOUTUBE UK Supreme Court
R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1. The appeal related to whether legal advice privilege existed when the advice came not from a lawyer but from an accountant. A more general question was whether legal advice privilege extends, or should be extended, so as to apply to legal advice given by someone other than a member of the legal profession, and, if so, how far legal advice privilege thereby extends, or should be extended.
By a 5 to 2 majority, the Supreme Court refused to extend the scope of legal advice privilege. Legal advice privilege should not be extended to communications in connection with advice given by professional people other than lawyers, even where that advice is legal advice which that professional person is qualified to give. To do so would extend legal advice privilege beyond what are currently, and have for a long time been, understood to be its limits.
Extending legal advice privilege
to any case where legal advice is given by a person who is a member of a profession which ordinarily includes the giving of legal advice would be likely to lead to a clear and well understood principle becoming uncertain, because it is unclear which occupations would be members of a profession for this purpose.
Further, the extension of legal advice privilege to cases where legal advice is given from professional people who are not qualified lawyers raises questions of policy which should be left to Parliament. The consequences of extending legal advice privilege should be considered through the legislative process, with its wide powers of inquiry and consultation and its democratic accountability.
A further point was that Parliament has enacted legislation on the basis that legal advice privilege extended only to advice given by qualified lawyers.
This judgment may well be seen in some quarters as lawyers looking after the interests of lawyers but the fact remains that legal professional privilege has long extended only to lawyer-client relationships. Also, the privilege exists to protect the client.
The minority (Lords Clarke and Sumption) considered that legal advice privilege extends to advice given by members of a profession which has as an ordinary part of its function the giving of skilled legal advice, and that recognising the privilege attaching to the legal advice of accountants would not be extending the scope of legal advice privilege. English law has always taken a functional approach to legal advice privilege. On this view, the availability of legal advice privilege depends on the character of advice which the client is seeking and the circumstances in which it is given, and not on the adviser’s status, provided that the advice is given in a professional context.
Interestingly, the quotation at the top of this blog from Oliver Wendell Holmes was cited by Lord Neuberger at para. 48. Lord Neuberger said - 'While I accept that it would accord with its underlying logic to extend LAP as Prudential contend, “[t]he life of the [common] law has not been logic”, as Oliver Wendell Holmes, Jr observed on the first page of The Common Law (1881). As he went on to say, the life of the common law “has been experience”. The common law has been created and developed by judges over more than eight centuries, and, as Holmes also observed, “[i]n order to know what it is, we must know what it has been …”.
Law Society Gazette 23rd January - Legal professional privilege only for lawyers, Supreme Court rules. The article quotes Michael Izza, chief executive of the Institute of Chartered Accounts in England and Wales, who described the current position on LPP as ‘unprincipled and anti-competitive for individuals and businesses who we believe should be able to seek the best professional advice upon the same terms whether from lawyers, accountants or indeed other appropriately qualified professionals’.
Zakrzewski v The Regional Court in Lodz, Poland [2013] UKSC 2 - (Judgment delivered by Lord Sumption) - dealt with an interesting point relating to the rather troublesome European Arrest Warrant system. Z had been convicted in Poland of four offences for which separate sentences had been imposed. Zakrzewski absconded in 2010 and the Regional Court in Lodz issued a EWA against him based on these four convictions specifying the separate sentences passed. Z was arrested in Englabnd and brought before the City of Westminster Magistrates’ Court but the extradition proceedings were adjourned since Z was facing further criminal charges in England. During this adjournment, Z applied to the District Court of Grudziadz in Poland to have the four sentences aggregated and this was done. (The result of such aggregation is usually a lower overall sentence). When the extradition proceedings resumed, Z claimed that the EAW was invalid because it failed to give the particulars required by the Extradition Act 2003 s.2(6)(e) since the only relevant sentence now included was the cumulative sentence. The Supreme Court, noting that aggregation of sentences is a common practice in Europe, disagreed and held the warrant to be valid. However, the appeal was dismissed since Z had voluntarily returned to Poland since the case was argued and he had been arrested there. Therefore, the warrant was no longer required.
See Fair Trials International - The European Arrest Warrant
Lloyds TSB Foundation for Scotland v Lloyds Banking Group [2013] UKSC 3 - (Judgment delivered by Lord Mance) - concerned the meaning of the term 'pre tax profit' in deeds which required certain payments to charitable foundations. In 2008, Lloyds TSB Group acquired HBOS. Audited accounts for 2009 included a figure for “gain on acquisition” of over £11 billion. The inclusion of the “gain on acquisition” had the effect of converting a loss of over £10bn into a profit (for Lloyds Bank Group) before taxation of over £1bn in the appellant’s Audited Accounts. If that £1bn was pre tax profit for the purposes of the deeds then a much larger sum was due to the Foundation- (£3,543,333 as opposed to £38,920). Lloyds appealed to the Supreme Court on the grounds that on its proper construction the figure for “gain on acquisition” should be disregarded when calculating the payments due under the Deed. The appeal was allowed.
Here are links to the judgments and press summaries - (via Supreme Court Latest Judgments):
R (on the application of Prudential plc and another) (Appellants) v Special Commissioner of Income Tax and another (Respondents)
Zakrzewski (Respondent) v The Regional Court in Lodz, Poland (Appellant)
Lloyds TSB Foundation for Scotland (Respondent) v Lloyds Banking Group Plc (Appellant) (Scotland)
A very important and current article, that raises the time old quandary of at which point does lawyers looking after the interests of their clients change to lawyers looking after the interests of lawyers. It is a very sensitive subject that should be approached with tact and finesse. We personally believe that the clients welfare and fair treatment is of the utmost importance, and feel that all law first, while protecting their own interests, should always have the clients welfare at the forefront.
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