MY SAY: When tax advice crosses the line

LEGAL Professional Privilege, or LPP, is a fundamental right within our democracy to ensure we maintain confidentiality between legal representatives and the client.

It means legal strategies and advice are kept between the legal representative and their client.

It's a principle that's worth fighting for - perhaps until now.

I'm not at all shocked at the allegations to emerge from the Panama Files.

We have a law firm that is headquartered in a known tax haven, with celebrities, politicians and their families on the client list.

It's alleged these individuals are involved in tax avoidance through the creation of shell companies in tax havens that receive income off the books and out of reach of their home tax authorities.

In a country that's battling a $400 billion government debt crisis, it's fair to ask why most ordinary Australians are investing anywhere between 15 and 25 minutes of every hour of every day we work to go to the government in income tax, while others that are rich enough benefit from LPP from Panama do not?

Another question to ask is why a law firm?

In recent months I've seen a number of law firms put up their hand to offer services as "data breach coaches" or "data breach specialist advisers".

Again, why law firms?

It's about using the veil of lawyer-client privilege to ensure that if things were to ever get public, there can be claims made under our system for LPP.

This means what is known, strategised and implemented can be kept secret.

It means that those of us who invest 15 to 25 minutes every hour of every day to the government in the form of income tax will never know how or why certain decisions were made and in whose interests when a data breach occurs and actions need to be taken.

I've seen some horrific examples of organisations behaving very poorly when it comes to responding to data breaches.

It's a very grey area to be navigated by law firms who wish to advertise services that have the risk of blurring what's "legal advice" to actually "aiding and abetting" activity.

The allegations at the centre of the Panama files controversy is that this law firm wasn't just providing advice, it was enabling and facilitating crimes that within Australia go directly to influencing how many minutes worked each day by ordinary Australians go to paying tax.

When it comes to issues where there are broader community interests at stake, such as paying taxes and responding to data breaches, maybe we need to rethink the scope of what's in or out of legal professional privilege.

* Dr David Lacey is a Senior Research Fellow at the University of the Sunshine Coast and Director of IDCARE.



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