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Thursday 24 January 2013

All for one and one for all

Our higher courts are in the daily business of scrutinising tricky and difficult situations and passing judgment on how the law should apply to them.

In the majority of cases, the court’s function is highly forensic, painstakingly peeling away layers of fact in order to apply a precise and exacting legal analysis. By and large, the rigour of the process is illuminating. Once in a while however, the virtues of the system seem to break down and notwithstanding that the facts of a particular case have been expensively filleted and divined, the court still appears to end up basing its decision on a metaphorical flip of the coin. When this occurs, one cannot help feeling a bit short-changed by the whole exercise.

The Supreme Court judgement yesterday in R (on the application of Prudential plc and another) v. Special Commissioner of Income Tax and another [2013] UKSC 1 is a case in point.

The issue in the case is easily stated and apparently straightforward: Does legal professional privilege apply to legal advice given by an accountant to his client in the same way as it would if the exact same advice were being given by a lawyer?  If it does, the advice is confidential to the client; if it does not, the advice may have to be disclosed in proceedings (or in this case, upon an investigation by the revenue).

The majority of the Supreme Court decided that legal advice delivered by accountants was not privileged. Two members of the court dissented.

The majority, lead by Lord Neuberger, thought that whilst the common law was illogical in applying privilege only to communications from lawyers, that it was a matter for parliament not the court to sort out. All the usual guff about how it was not up to the court to make policy and about not opening the floodgates to claims from all kinds of professionals was dished up. We were even treated to a spot of mildly sententious flannel in the form of a quote from Oliver Wendell Homes, Jr, the celebrated American jurist about how the life of the common law has not been logic but experience.

The dissenting minority, Lords Sumption and Clarke, thought (as the majority recognised) that as privilege in the advice belongs to the recipient and not to the professional delivering it, that it was nonsense for privilege not to attach due to the nature and character of the qualifications of the person delivering it.

Perhaps the very force of the dissenting arguments contributes to the unsatisfactory nature of the result, enabling one to see what a close call it all was and how easily things could have gone the other way. Somehow that does not seem right (or just) in relation to decisions of such import and moment from the highest court in the land from which there is no appeal.

In a time where we have a coalition government where members of the constituent parts readily disagree with one another in public, it is easy to forget the more usual convention of cabinet government where the deliberations take place behind closed doors and then a single united front is presented in public. Would it not be better to do the same in the Supreme Court – for their lordships to discuss and debate amongst themselves and then for a single considered judgment of them all, canvassing all the arguments to appear. At least in highly marginal cases like this one, the result would look less arbitrary, more coherent and more capable of respect.

Bruce Jones

MH Corporate

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