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Detailed analysis
If we subject this to more detailed analysis (or hair-splitting, depending upon your point of view) the Money Laundering Regulations 2007 and the related provisions of s330 Proceeds of Crime Act 2002 (as amended) arguably do not affect common-law legal professional privilege.
By way of background (and being brief) the 'common law' is law which is not to be found in any statute passed by Parliament, but it is the law because everyone accepts it to be the law and it is based on time-honoured fundamental principles. An example of common law is the offence of 'cheating the public revenue' - sometimes still used in the prosecution of tax evasion. The 'rules' in relation to common law offences have been developed and refined over decades or even centuries of court decisions. (Off topic, but in Scotland such non-parliamentary law is much more important than in England & Wales. For example the Theft Act 1968 does not apply in Scotland, where theft is a common law offence.)
One of the fundamentals of the common law is that communications relating to legal advice given by a solicitor to his client remain confidential and the courts cannot oblige those communications to be revealed against the wishes of the client. (This is sometimes misunderstood to mean that all communications between a solicitor and his client are protected, but this is not the case.) This common law protection (and other very similar common law protections) are sometimes referred to as "legal professional privilege" or LPP. This is something of a misnomer because the protection belongs to the client, not to the legal professional, but it's a useful shorthand terminology.
It is also the case that the MLR and s330 (as originally enacted) gave statutory protection from the obligation to report suspicions of money laundering so that a lawyer was expressly not required to report information received in the context of giving legal advice. Technically that is not an application of common law legal professional privilege, it is a statutory exemption which has a similar impact in specified circumstances.
But the European Directive on which the MLR are based actually refers to lawyers and accountants and therefore the UK enactment did not faithfully reflect the EU Directive. The ICAEW amongst others objected to this. Eventually the MLR and s330 were amended to extend the statutory exemption to qualified accountants.
Now the MLR and s330 are out of step with English common law. But does that matter?
The lawyers say that does not matter and it would be inappropriate to extend the common law privilege to cover legal advice by anyone other than lawyers. One 'reason' for this is that lawyers are technically officers of the court and accountants are not. (The 'proper' title of a solicitor is “solicitor of the Senior Courts of England and Wales”.)
On the other hand one could argue that accountants have a long history of serving the public interest (and not simply the interest of their client) in their role as statutory auditor under company law (and similar legislation).
Also accountants, when acting as expert witnesses, owe a primary duty to the court which over-rides their duty to their client.
So one might argue that accountants, like lawyers, recognise a wider responsibility and their clients deserve the benefit of common law LPP in relation to legal advice from either profession.
But then what about actuaries, surveyors, etc., etc.?
I rather suspect this appeal will go to all the way to the Supreme Court.
David
Poor advertising
This would have been of much less interest to all concerned about LPP and the current discrimination, if certain legal firms had not decided to tout for business with statements to the effect of 'your accountant will need to disclose this to HMRC/SOCA, as lawyers we won't, so come to us'.
Where the same advice is given it is inconsistent and unfair to apply different rules to it based on the professional body to which the adviser belongs - and if a nominal loyalty to the crown is the only issue, then that could easily be dealt with by applying similar rules to the few accountants who want to be able to claim LPP. Incidentally I doubt that accountants would use LPP widely - in practice I can't see any accountant claiming LPP without first getting a solicitor/barrister to review the advice confirm that it qualified for LPP.
An alternative to expanding LPP to cover all persons giving similar advice, would be to restrict LPP to exclude the sort of structured tax planning advice that has driven the issue onto the table, but I expect the legal profession would howl even more loudly over that sort of restriction than they are over the threat of their competitive advantage being removed!
"a case that could determine whether tax advisers can claim lega
Emphasis being on 'could'.
It won't.
The chances of the accountants' view prevailing in this case are low. But even if they won, it would not open the floodgates to allow tax advisers/accountants to claim legal professional privilege.
Mark