An obligation taken too far?

Whatever the rights and wrongs of the Government's decision last week to drop mortgage fraud proceedings against Mr Justice Gee on health grounds, the case highlights the problems surrounding the thorny issue of confidentiality.

During his first trial, which ended in a hung jury, Judge Gee's counsel conceded that lies were told in a string of mortgage applications against his law firm, but added that “any conveyancing solicitor was entitled to believe applicants were decent, honest people”.

Such a belief, which would have been prevalent among busy conveyancing solicitors in the heady days of the 1980s boom, would have been re-inforced by the cherished duty of confidentiality which is drummed into budding solicitors from law school onwards.

As a result, few observers were surprised when the UK's National Criminal Intelligence Service last month revealed that solicitors had only reported 236 suspicious transactions, down from a measly 300 the previous year.

The profession's official response – that solicitors have become so rigorous that many launderers have been frightened away from instructing them – is hard to believe.

Occasionally rules requiring solicitors to report their clients can go too far, as appears to be the case in Ireland where solicitors may be required to report all suspected criminal activity. (See The Lawyer, 6 October, page 48)

Banks with thousands of clients doing transactions every day can afford to report the odd offender but solicitors, with their more long-term, trusting and intimate client relationship, will find it much harder to make the call.

It is difficult to stand back from a transaction on the suspicion that the client is doing something unlawful – is suspicion reason enough to report what you know to the authorities or to your other partners?

But the duty of confidentiality is not the only – nor the most important – duty a solicitor holds. He also has a duty of professional integrity.

It is time the profession took a look at the duty of confidentiality rules – law schools and firms should communicate a more subtle message.

It should be clearly spelt out that the duty of confidentiality to a client should end when the solicitor suspects he is being used as a vehicle for fraud or money laundering.