Wiseman v HMRC – a reminder of the limitations of Legal Advice Privilege in regulatory proceedings

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Wiseman v HMRC – a reminder of the limitations of Legal Advice Privilege in regulatory proceedings

Published 22 July 2022

Accountancy firms facing regulatory investigation need to be very clear about what communications and meetings are covered by privilege.  This latest case illustrates where the lines lie.

In May, the UK First-tier Tribunal (Tax) (“FTT”) ruled on the application of Legal Professional Privilege (“LPP”) following a disclosure request by HMRC. The decision in Wiseman v HMRC [2022] UKFT 00075 (TC) provides some insight into how disclosure requests by the FRC should deal with claims to privilege by the accountancy firms under investigation.

The facts

In November 2019, HMRC served an information notice requesting various documents “for the purpose of checking the taxpayer’s tax position” in tax year 2002/03.

Mr Wiseman appealed the notice and applied to the FTT for a declaration that the documents – which were communications between Mr Wiseman and his solicitors, Turcan Connell – were privileged and should not be disclosed.

The legal background

Mr Wiseman relied on Paragraph 23 of Schedule 36 of the Finance Act 2008, which states that an information notice from HMRC “does not require a person to provide privileged information, or to produce any part of a document that is privileged”.  There is a directly analogous provision under SATCAR[1], entitling auditors under investigation by the FRC to withhold privileged documents.  

While regulators must respect privilege as a doctrine, whether or not documents actually attract privilege is an area of constant debate between regulators and those under investigation or review.

LPP comprises two distinct strains: Litigation Privilege and Legal Advice Privilege (“LAP”).  The former was not relevant to these proceedings (as the documents were not created at a time when “litigation” – or other adversarial proceedings – existed or was in reasonable contemplation).

LAP has been summarised in Three Rivers[2] as applying to:

  1. Confidential communications;
  2. Passing between a client and a client’s lawyer;
  3. Which have come into existence for the purpose (see below) of giving or receiving legal advice.

“Legal advice” includes not just information as to what the law is, but also “advice about what should prudently and sensibly be done in the relevant legal context”.[3]

The recent Court of Appeal judgment in CAA v R (oao Jet2.com Limited)[4] established that to attract privilege, a communication must have the dominant purpose of giving or receiving legal advice.

The FTT’s decision

The FTT considered each document separately.

It concluded that seven letters and two telephone attendance notes between Turcan Connell and Mr Wiseman were created for the dominant purpose of giving legal advice, and were privileged from disclosure.

Notes of two further meetings between the lawyers and Mr Wiseman required more nuanced consideration.  The FTT did not agree with Mr Wiseman that “dominance” had been established in both instances.  It held that the primary focus of one meeting was for Tenon (a third party advisor) to inform Mr Wiseman of non-legal matters.  Accordingly, the FTT held the notes of this meeting were not privileged, and awarded their disclosure to HMRC.


The ability to seek legal advice under the protection of LPP is a recognised human right and should be respected by regulators.  At times a regulator may press for fuller disclosure –  as HMRC did in this case – however, maintaining a legitimate legal right should not be the subject of regulatory criticism.

LAP is narrower than Litigation Privilege.  There are lessons to be learned from the FTT’s interpretation of the “dominant purpose” test so far as it related to notes of meetings at which lawyers were present.  This decision is a helpful reminder that the mere attendance of a lawyer in a meeting or call will not guarantee the application of LAP.  Lawyers should carefully consider whether their involvement can be properly characterised as for the purpose of their giving legal advice – particularly in meetings alongside experts, witnesses and other third parties where lawyers’ attendance may not be clearly for the purpose of obtaining their advice.  Given the FTT’s decision that these notes were not privileged, we think it likely that while solicitors were present at the 31 July 2002 meeting, their involvement was limited (and it is possible they may in fact have attended mainly or solely to ensure the note attracted privilege).

In contrast, Litigation Privilege covers all documents created in contemplation of disciplinary proceedings, which shall for example include records of interviews of staff providing evidence relevant to such proceedings. Under the Audit Enforcement Procedure (“AEP”), we consider it is reasonably clear that litigation is in contemplation, and Litigation Privilege may apply as soon as the FRC gives a Notice of Investigation under Rule 11 (such Notice is only given when a Case Examiner has concluded that there is information about a Statutory Auditor or Statutory Audit Firm which raises a question as to whether they have breached a Relevant Requirement.)

We sound a note of caution for those firms subject to preliminary enquiries by the FRC before a decision to investigate them has been taken.  For those firms caught up in an investigation where it is not clear that they will be the subject of disciplinary proceedings, careful consideration may need be given to whether or when Litigation Privilege can be claimed.


[1] Schedule 2, Paragraph 1(8)

[2] Three Rivers District Council & Others v Governor & Company of the Bank of England [2003] EWCA Civ 474, 2003 WL 1610352 (“No. 5”) / [2004] UKHL 48 (“No.6”)

[3] Per Taylor LJ in Balabel v Air India

[4] [2020] EWCA Civ 35


Jamie Tomlinson

Jamie Tomlinson

London - Walbrook

+44(0)20 7894 6014

Francesca Muscutt

Francesca Muscutt

London - Walbrook

+44 (0)20 7894 6189

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