No privilege for you


No privilege for you

There's a well known principle in law called 'legal professional privilege'. In essence, it means that the anyone can consult a lawyer to seek "skilled advice" on a given legal matter without the detail behind those consultations ever being disclosed.

Without this, those in trouble, or otherwise, would never take good legal advice for fear of scuppering their case before it had started.

It was thought that the same principle applied to those seeking advice from their accountants. Well, sadly it doesn't anymore, following a recent ruling by the Court of Appeal in the Prudential Case.

Without delving too deeply into the detail, part of the reason for this is that there is nothing in law stopping an unqualified individual from setting up in business as an accountant.

Lawyers, on the other hand, are regulated by the Law Society. It made sense to the judges to restrict the privilege to those who are regulated and definable.

What does this mean? It means that you need to be very careful as to what you say or write when dealing with your accountant. If a matter comes to court, say an investigation of your business affairs, it's quite possible the other side could demand detail on the correspondence.


This was first published in October 2010

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