Nicosia, Cyprus (4th February, 2013) – Xenophontos & Associates, one of the leading accounting and auditing firms in Cyprus, comments on the Supreme Court’s decision not to extend Legal Advice Privilege to the clients of Chartered Accountants.
On 23rd January 2013, the Supreme Court handed down its decision in a case under the application of Prudential plc. and another v Special Commissioner of Income Tax and another; the case was based around the notion that legal advice privilege (LAP) should not be extended in respect of legal advice given by chartered accountants on tax matters. The decision went 5 to 2 in favour of preserving the current position.
The effect of this decision is that, for the time being, Legal Advice Privilege (LAP) will continue to be restricted to the clients of lawyers and other legally-qualified advisers (including people supervised by them). It will not be extended to clients seeking advice from chartered accountants (unless supervised by a lawyer).
Where litigation is involved, the position is quite different: provided the dominant purpose is providing advice in relation to litigation, or prospective litigation, then a chartered accountant’s legal advice to his client will be privileged. However, even in this case, there must be a lawyer involved to generate the privilege.
Andreas Xenophontos, Managing Partner at A. A. Xenophontos & Associates, commented:
“This decision surely continues to keep in existence an unjust, unjustifiable and unfair competition in favour of barristers and solicitors, and to the expense of accountants, when it comes to advising clients on the very same issues—taxation issues, for example.
Mr Xenophontos continued:
“I fully agree with Lord Sumption that this is a functional test, and it relates only to the client’s right to obtain legal advice from a skilled professional, irrespective of whose professional body the adviser is a member of”.
For more information on Xenophontos & Associates’ accountancy services, please visit www.xenophontos-associates.com.
About Xenophontos & Associates:
A.A. Xenophontos & Associates are a firm of Chartered Accountants located in Latsia, Nicosia and is included among the most respected accounting and auditing firms in Cyprus. The firm offers a wide range of services, including accounting, auditing, tax planning and compliance, financial studies, payroll services, VAT, trusteeship/ nominee services and company formation, trust formation, help with obtaining Cyprus Investment Firm licence, help with obtaining Cyprus residence permits, company liquidation and strike-off services.
A. A. Xenophontos & Associates
79, G. Kranidioti Avenue
2nd Floor, Office 204
CY-2231 Latsia, Nicosia
Tel: ++357 7000 0066