Let parliament decide on privilege, Lord Neuberger says

Parliament, and not the courts, should decide on whether legal advice privilege (LAP) should be extended to non-lawyers, the Supreme Court decided this morning.

Four justices agreed with Lord Neuberger that extending the principle to accountants and other professionals would “carry with it an unacceptable risk of uncertainty and loss of clarity in a sensitive area of law”.

Lords Sumption and Clarke dissented, on the grounds that English courts had always taken a “functional approach” to LAP.

Giving the leading judgment in R (on the application of Prudential) v Special Commissioner of Income Tax [2013] UKSC 1, Lord Neuberger said three reasons had persuaded him that the issue was a matter for parliament.

“First, the consequences of allowing Prudential’s appeal are hard to assess and would be likely to lead to what is currently a clear and well understood principle becoming an unclear principle, involving uncertainty.

“Secondly, the question whether LAP should be extended 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. “Thirdly, parliament has enacted legislation relating to LAP, which, at the very least, suggests that it would be inappropriate for the court to extend the law on LAP as proposed by Prudential.”

The president of the Supreme Court said that Lord Sumption’s solution, while “clear and principled in conceptual terms”, carried with it an “unacceptable risk of uncertainty and loss of clarity in a sensitive area of law”.

Lord Neuberger said it was unclear to him whether town planners, engineers or pension advisers would qualify under Lord Sumption’s new rule, which would extend LAP to any profession which ‘ordinarily’ gave legal advice.

“As I see it, it could be necessary for a court to delve into the qualifications or standing, and maybe into the rules and disciplinary procedures, of a particular group of people to decide whether the group constitutes a profession for the purpose of LAP.

“So there would be room for uncertainty, expenditure and inconsistency, if the court had to decide such an issue.”

Lord Neuberger said he was “unimpressed” by Prudential’s reliance on the Legal Services Act.

“At best, it merely acknowledges two realities which I have accepted anyway, namely that legal advice is now given by many professional people other than lawyers, and that lawyers can work in firms with other professionals, and vice versa: the only change affected by the 2007 Act is that lawyers can now go into partnership with people in other professions.”

The president of the Supreme Court said: “Rather than extending LAP beyond its present accepted boundaries, we should leave it to parliament to decide what, if anything, it wishes to do about LAP.”

He dismissed Prudential’s appeal. Lords Hope, Walker, Mance and Reed agreed. Lords Sumption and Clarke dissented.

Copyright & permissions