Who can really be trusted to keep a secret? Accountants or lawyers?

, , , , , , ,

When you speak with your lawyer, you can say almost anything and be confident in the knowledge that the lawyer will be able to preserve the confidentiality of your discussion.

Most people probably assume the same thing when having discussions with their accountant, especially in the context of discussing tax planning opportunities with a tax advisor.

Unfortunately, English readers should pay careful attention to the decision in a recent case, R (on the application of Prudential PLC) v HMRC, EWCA Civ 1094 if you would like the full legal citation.

This Court of Appeal decision stated that client privilege only extends between a lawyer and a client.  This means that any discussion between a client and an accountant cannot be guaranteed to be confidential.

This is an English legal case, which is binding in England and Wales only, but the judgment is based on common law, so is likely to be highly influential in jurisdictions based on the English system globally.

As the accountancy and legal professions increasingly compete, especially in the area of tax advice, this gives a significant advantage to the legal profession over the accountancy profession.

Who would you rather seek advice from: a lawyer who you are confident cannot be compelled to reveal the content of your discussion, or an expert accountant who is unable to promise confidentiality?

If you talk to a lawyer about this then they may well say they were pleased that they had this advantage over accountants.

Note of course though that if they felt like it they wouldn’t have to disclose what was said in your conversation…

Who are you sat next to?
If you’re in the office at the moment take a look at the person next to you. Would you say that he or she is[..]
Happy New Desk
Well it’s that time of year again when a lot of people set themselves a New Year Resolution. On average, approximately a third of people[..]
When is an ice cream not an ice cream?
It sounds like the start of a riddle but there’s an important underlying message. Namely, organisations should be monitoring the environment they are operating in[..]
(Un) Happy Christmas Mr Orangutan
Advertising can have a dramatic impact on what people buy and in countries which celebrate Christmas, one of the busiest buying seasons is upon us.[..]