07 December 2007, The Independent

Lawyers have long argued that there is absolute protection against the publication of legally privileged advice. Robert Verkaik, Law Editor, finds a case which challenges this.

Her Majesty's Revenue and Customs has recently shown itself capable of carelessly giving away personal details belonging to 25 million people living in England and Wales. So it may strike some as odd that when presented with a legal request for a single piece of information, the same organisation refuses to disclose anything.

Last week, the Information Tribunal criticised Customs for failing to provide information to the barrister James Kessler QC, who chose to apply for sensitive material under the Freedom of Information Act.

Mr Kessler asked to see legal advice that Customs had obtained from the Department of Trade and Industry concerning the abolition of a capital gains tax exemption for UK professional trustees.

But, in its response, Customs told Mr Kessler that this was legally privileged information that was exempted under the Act, a decision the barrister decided to challenge at the Information Tribunal.

Last week the Tribunal upheld that use of the exemption but strongly criticised Customs for not providing substantial reasoning based on the advice. It said "substantial public interest would be served by disclosure of fuller reasoning of why the Government reached the conclusion" and urged Customs to make a further statement.

The case is important because it makes clear that legal professional privilege is not an absolute defence to a request to see advice drawn up by government lawyers. For example, the Government may waive its privilege, which the Tribunal said was an objective, not a subjective, test. In a previous case looking at the Attorney General's advice on the war with Iraq, it was made clear that the leaking of the advice to the media had amounted to a waiver.

The Tribunal's deputy chairman, Annabel Pilling, said: "We agree with the general principle that where legal advice has served its purpose, there may be a stronger public interest argument in favour of disclosure, particularly, if, in fact, no harm would be created." But she added: "We do not consider however that to be the position here."

The Tribunal adopted what was said in the 2006 case Burgess vs The Information Commissioner and Stafford Borough Council, which stated: "The Tribunal wants to make it clear that legal privilege is not an absolute [exemption] and furthermore, it is not enough in each case simply to assert that the Tribunal's previous decision in Bellamy effectively makes the [exemption] an absolute one: that is not correct."

Mr Kessler is exercised by what he alleges is a denial of a fair trial because the Tribunal allowed Customs to submit evidence in support of their arguments in a closed session which he was unable to challenge.

Mr Kessler says the Information Tribunal's decision sets a dangerous precedent and could pave the way for HMRC to submit secret evidence in other cases, which would make it much harder for taxpayers to question HMRC's decisions. He said:

Normally, secret evidence is only ever admissible in terrorist-related cases, where there is a clear case of national security overriding the rights of the other parties to the case. The Tribunal's decision to allow HMRC to make undisclosed representations in a Freedom of Information Act dispute is unique and considerably widens the circumstances in which secret evidence could be used.

Mr Kessler says he will take his case to the High Court where judges will be given the opportunity to set out exactly when legal advice can be disclosed.

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