LawZone Newswire – Issue 250

Last month Tony Blair trailed the idea of lowering the burden of proof to make life a bit easier for the US-style crime busters who will target gangsters, people-traffickers and drug barons. And only last week it was revealed that lawyers might have to grass up their own clients as part of the battle against organised crime.

As reported in the previous issue of the LawZone Newswire, the government has been chipping away at the once sacrosanct principle of client confidentiality through the Proceeds of Crime Act 2002. This week sees another whopping chunk removed as the Money Laundering Regulations 2003 come into force creating a brand new offence under the Act of ‘failing to report’ in situations where a lawyer has ‘reasonable grounds’ to suspect money laundering.

The assault on client-lawyer relations is coming from all sides. According to The Times, solicitors and other professionals would be forced to disclose confidential client information under sweeping new police powers for SOCA being planned by ministers. Lawyers will be obliged to answer investigators’ questions and a failure to do so would leave them open to being fined or even sent to jail.

“My heart sinks,” said Shami Chakrabarti, director of Liberty. “It is always talk tough, legislate first and think later. Yet again it is the rush to the statute book before you have even made the case and looked properly at existing powers.” Of course, the idea of lawyers becoming “informants for the police”, as Liberty put it, will stick in the craw of defence lawyers, every bit as much it does for family lawyers being obliged to report their clients for paying the nanny cash in hand. “Lawyers are there to represent their clients and work out their best line of defence,” argue Liberty. “No lawyer would encourage their clients to lie – that would be a complete breach of their professional standards.”

Putting professional ethics aside for one moment, it was reported this week that, owing to the Proceeds of Crime legislation, banks and other financial institutions had filed almost 95,000 suspicious activity reports to National Criminal Intelligence Service (NCIS) last year, and that number is expected to hit 200,000 this year. There is a point when NCIS becomes swamped with reports which it hasn’t got the manpower to do anything with – many lawyers suspect the law enforcement body is there already.

Top Stories this Week:

Discrimination against pregnant women: 1,000 legal actions brought every year
Every year over 1,000 women take legal action claiming they were sacked because of their pregnancy, according to a report published by the Equal Opportunities Commission which called for more research into whether the tribunal system discriminated against expectant women.

Defamation: draft Rome II regulation to allow privacy law through the backdoor?
Media lawyers were voicing their concerns over plans for EU harmonisation this week that would allow claimants to sue for privacy using the law of any country where the material has been published.

Freshfields lobby clients to join campaign for capping of directors’ liability
Magic Circle firm Freshfields Bruckhaus Deringer last week contacted its clients as part of a campaign to persuade ministers for a change in the law to enable directors to limit their liability.

Mental Incapacity Bill “not about euthanasia”, says minister
Ministers last week unveiled improvements to its draft Mental Incapacity Bill which would provide a new statutory framework to protect vulnerable people, carers and professionals.

Courts’ way to award interest is “confused, arbitrary and outdated”
The way in which the courts award interest on debts and damages was “confused, arbitrary and outdated” and gave the impression that the legal system was “living in the past”, according to a report published by the Law Commission last week.