LPP is for lawyers only, for now

The Supreme Court has deemed that non-lawyers who give legal advice – such as accountants and potentially compliance experts – do not have these communications covered by Legal Professional Privilege. Steven Francis and Robbie Constance examine the ramifications for financial services firms and the compliance industry.

Steven Francis is a partner and Robbie Constance a senior associate with law firm RPC (Reynolds Porter Chamberlain). Contact them at steven.francis@rpc.co.uk and robbie.constance@rpc.co.uk.

John Green and Paul Rowley, who were partners in making property purchases, had a loan liability with RBS of £1.5m repayable in 15 years on an interest only basis. In May 2005 they met with two managers at the bank and were sold an interest rate swap as a means of hedging their loan liabilities. But after the financial crisis, when interest rates fell to 0.5%, Green and Rowley “fared very badly under the swap” according to the judgment. The swap still had six years to run but when they enquired about terminating it early they discovered this could cost them up to £138,650.