Editorial
| Date | 02 October 2017 |
| Pages | 494-495 |
| Published date | 02 October 2017 |
| DOI | https://doi.org/10.1108/JFC-07-2017-0065 |
| Author | Barry Rider |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Editorial
A privilege or a curse!
In the pages of this journal, we have often discussed the impact, often unintended, of
measures taken to address the threat of economically motivated crime on third parties. In
this context, over the years, we have witnessedthe ever-increasing burdens imposed by law,
regulation or just best conduct, on those who mind other people’s wealth in the ordinary
course of their business to be fully aware for whom they act and the circumstances and
derivation of any relevant property. Indeed, in editorials in this and the Journal of Money
Laundering Control we have often commentedon the appropriateness of measures designed
to inhibit the laundering of criminal property and other suspect wealth, when balanced
against the risks and responsibilities and therefore costs imposed on banks, other financial
institutions and increasinglyprofessional advisers. The obligation to report suspicions that
wealth is the proceeds of crime or related to terrorist activity has resulted in arguably the
great burden on intermediaries and their advisers.There are jurisdictions in which there is a
broad obligation to report to the authorities almost all seriouscrime, but in Britain, this has
long been thought unjustified and unacceptable. Having said this, there are, of course,
exceptions and the one that is perhaps most pervasive relates to suspicion that property
constitutes or representsa benefit derived from criminal conduct.
Partly as a result of EU directives, the obligationon those who by way of business handle
other people’s wealth to disclose their suspicions as to its status has been cast over an
increasingly wider group of people. In many countries, broadening this obligation so as to
include lawyers has been controversial. This in large measure is a result of theconfidential
relationship that may well exist between a client, including someone “in house”and a legal
adviser. However, there is a more fundamental concern, which relates to the protection of
individuals and the efficacy of the legal system. This is the question of privilege, which in
many jurisdictions is more or less absolute. It has long been the case in English law that
while a client is entitled to expectconfidentiality in all his or her dealings, where litigation is
a possibility or where the advice relates to a legal issue,the relationship is subsumed by the
much stronger obligation of legal professional privilege (Balabel v. Air India (1988) 1 Ch
317). Many consider thisa vital element in the rule of law. For example, Lord Hoffmannin R
v. Special Commissionersof Income Tax (2003) 1 AC 563 stated:
Legal professional privilege is a fundamental human right long established in the common law. It
is a necessary corollary of the right of any person to obtain skilled advice about the law. Such
advice cannot be effectively obtained unless the client is able to put all the facts before the adviser
without fear that they may be afterwards disclosed and used to his prejudice.
On the other hand, it was long eloquently put by Lord Denning MR that there can be no
privilege to do iniquity. So, the privilege would not arise where the lawyerparticipates in a
crime, such as the facilitation of money laundering. Nor would it arise where the lawyer
steps beyond the proper relationship of a lawyer and acts, for example, as a business
consultant or tax adviser (see Lord Scott, Three Rivers District Council v. Governor of the
Bank of England (No 6) (2004) 3 WLR 1274).It is also generally the case that lawyers may be
properly remunerated in so far as they act in goodfaith and provide services. Albeit this is
by no means true in all jurisdictions including the USA. In a recent case before the Supreme
Court of Jamaica (The Jamaican Bar Association v. the Attorney General of Jamaica (2017)
JMFC 2), the legality of regulations extending the obligation to report suspicious
transactions to lawyers was considered along with issues as to confidentiality and privacy
JFC
24,4
494
Journalof Financial Crime
Vol.24 No. 4, 2017
pp. 494-495
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2017-0065
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