Accountancy firms face prosecution in Portugal

Portugal's attorney general, Cunha Rodrigues, is deciding whether to prosecute Ernst & Young, Price Waterhouse and Coopers & Lybrand over allegations that they advised on Portuguese law.

Dr Soares Machado, president of the Lisbon Bar Association, said that the Bar had lodged a complaint against all three with Rodrigues.

Two years ago, he said, Ernst & Young filed an action in the Lisbon court against two clients that had not paid the fees owed for legal advice it gave on Portuguese law.

But in Portugal, the practice of law by anyone other than lawyers is prohibited in both the statutes of the Portuguese Bar Association and in the country's criminal code.

Machado said that the judge in the Lisbon court referred the incident to the Bar association which subsequently passed on the information to the attorney general.

The Bar Association also notified the attorney general that Price Waterhouse and Coopers & Lybrand had promoted Portuguese law capabilities in publicity material.

John Duggan, partner at Price Waterhouse in Lisbon, who said he was also speaking for Coopers & Lybrand, confirmed that a brochure from the management consultancy arm of the firm in 1990 had indicated that Price Waterhouse offered Portuguese tax advice, but he believed that the issue was of little relevance to today's situation.

He emphasised: "I can say with absolute certainty that Price Waterhouse has never advertised an ability to provide legal services."

He added: "The reality of the situation is that the law states the provision of tax consultancy is reserved for the legal profession but the legal profession does not have the ability to provide the taxation services that are needed by clients. If it continues with this action, the Bar could put itself in an embarrassing position."

Machado said: "Lawyers have specific rules on ethics governing publicity of services, confidentiality and conflicts of interests which the accountants don't have to respect. They should not have the privilege to represent clients."