The Judicial Studies Board's Equal Treatment Advisory Committee examined whether women should be allowed to wear the full facial covering, the niqab.
Decisions should be made on each case and veils should not interfere with the administration of justice, it found.
It follows the adjournment of a case in Stoke-on-Trent, Staffs, after a legal advisor refused to remove her veil.
Judge George Glossop said he was having difficulty hearing legal executive Shabnam Mughal at the immigration court in November.
| We respect the right to wear the niqab as
part of religious beliefs, although the interests of justice remain
paramount Mrs Justice Cox, Committee chairwoman |
The guidelines say forcing a woman to choose between her religious identity and taking part in a court case could have a "significant impact on that woman's sense of dignity" and could serve to "exclude and marginalise" her.
Committee chairwoman Mrs Justice Cox said: "We respect the right for Muslim women to choose to wear the niqab as part of their religious beliefs, although the interests of justice remain paramount."
She said a judge may consider taking action to allow a fair hearing for women wearing a niqab and others in proceedings.
The guidelines say if the wearer is a victim it should not be "automatically assumed" that the niqab would create a problem.
"Nor should it ever be assumed without good reason that it is inappropriate for a woman to give evidence in court wearing the full veil."
| It is heartening to see the courts base their
guidelines on the merits rather than on intolerance and prejudice Massoud Shadjareh, Chairman, Islamic Human Rights Commission |
Any request to remove a veil should be considered carefully and be "thoughtful and sensitive" and the courtroom could be cleared of those not involved in the case for her proceed.
Judges should assume female Muslim lawyers are entitled to wear the veil, the guidelines say.
A judge may consider excusing a juror if a challenge is made by one of the parties, providing the objection is genuine.
The Islamic Human Rights Commission said it welcomed the guidelines.
Chairman Massoud Shadjareh, said: "In the climate of Islamophobia we live in, it is heartening to see the courts base their guidelines on the merits rather than on intolerance and prejudice."