Proceeds of Crime Bill

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Mr. Ainsworth: I am advised, from more than one source, that legal professional privilege is defined in section 10 of the Police and Criminal Evidence Act 1984.

We do not believe that the amendment is necessary. The clause as presently drafted assumes that the professional legal adviser, acting on information given to him by his client, would know whether the information came to him in privileged circumstances. We do not think that it is a problem that the word ''believes'' is not explicitly stated, because in order to commit the offence of failure to disclose, the professional adviser must know or suspect, or have reasonable grounds to suspect, that money laundering is going on. If he knows or suspects that, he must have some idea that information may be being communicated with a view to furthering a criminal purpose—that is, money laundering. If the legal adviser does not know or suspect, or have reasonable grounds for knowing or suspecting, anything, he cannot be guilty of a failure to disclose in the first place.

There will be circumstances in which the adviser knows or suspects that there is money laundering and it is clear that legal privilege does apply. A client might be charged with a criminal offence and give information about money laundering to his legal adviser. The adviser would then know that money laundering was going on, but he could be confident that the information was given to him in order to prepare a defence rather than to pursue a criminal purpose.

Other circumstances might be less clear cut. In conveyancing or divorce proceedings, a legal adviser may come across information that leads him to suspect money laundering. However, he may not be sure whether the conveyancing or divorce settlement is part of the money laundering, or whether the information is given to him in order to pursue the criminal purpose of money laundering. In those circumstances, we think that the legal adviser should make a report. The legal adviser will be protected from any professional duties of confidence by clause 327, so there is no risk to him in making a report.

Therefore, where the legal adviser has any doubt as to whether information that comes to him is privileged, he should go ahead and disclose. We believe that the majority of legal advisers would act in good faith in that regard. The existing offence of failure to disclose suspicion of the laundering of drug money contains the same definition of legal privilege.

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That has not—so I have been told—given rise to any difficulties.

Mr. Grieve: I continue to be concerned about the matter, but I will consider it again, in the light of the Minister's comments about the statutory definition in the Police and Criminal Evidence Act. It might be more appropriate to consider my specific concern about the erosion of legal professional privilege at a later stage of our discussion of the Bill.

Mr. Alistair Carmichael (Orkney and Shetland): Does the hon. Gentleman agree that the Minister's comments about legal advisers making a disclosure if in doubt reinforce the need for the amendment? If the legal adviser makes a disclosure when he is in doubt, and it turns out that the information should not have been disclosed, he will be in breach of his duty of client confidentiality.

Mr. Grieve: Yes, that would be a serious breach of professional conduct. I have frequently expressed such concerns, as that problem arises throughout the Bill.

The hon. Gentleman may recall that an earlier part of the legislation did not contain a reference to legal professional privilege in connection with requiring people to answer questions. I think that it was the hon. Member for Redcar (Vera Baird) who said that it was extraordinary that there was no such reference, and the Minister responded by saying that it did not matter, because there could be no suggestion that the clause eroded legal professional privilege.

I found that odd at that time, and I find it even odder now I have been informed that there is a statutory definition of legal professional privilege in another piece of legislation. I wish to examine that definition, and the context in which it arises. It is worth bearing in mind that the Police and Criminal Evidence Act deals with certain restrictive facts and matters, rather than with the total ambit of legal professional privilege.

Mr. Carmichael: It is also worth bearing in mind that that Act applies only to England and Wales. I am not aware that there is a statutory definition in Scottish law—other than in the Solicitors (Scotland) Act 1980, in which it will be defined in broad terms. Moreover, even that will not cover members of the Faculty of Advocates.

Mr. Grieve: I was busy scrabbling through my Archbold to see if I could find that, but I could not do so in the available time. The hon. Gentleman has made an important point.

I have to decide whether to press the amendment to a Division—and I see that my hon. Friend the Member for Surrey Heath is encouraging me to do that—or to reflect on the matter further in the light of the Minister's comments. The only reason why I was minded to withdraw the amendment was because I could see that further opportunities might arise later in the Bill to look at the extent to which legal professional privilege was being tinkered with.

I agree with the hon. Gentleman that the Minister's specific line on ''If in doubt, declare what is going on to NCIS'' does not address the problem at all. The absolute duty of maintaining confidentiality means

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that legal professional privilege exists for the benefit not of lawyers but of clients. It exists to allow people free access to lawyers to get legal advice, and may be waived if the client wishes. It does not protect lawyers, but those whom they provide with advice. The idea that a person who is in doubt may go off and spill the beans to NCIS is wide of the mark.

11 am

Mr. Hawkins: My hon. Friend is right. I agree with the hon. Member for Orkney and Shetland (Mr. Carmichael) because some of the Minister's comments toward the end of his remarks caused me, too, to worry. Does my hon. Friend agree that we have been aware for many years—perhaps since before either of us entered the House—that it is the ambition of many of those in government to chip away at legal professional privilege? I am not talking only about the present Government, because the apparatus of the Home Office under successive parties has wanted to do that. I can remember debates in the 1992–97 Parliament in which there were frequent efforts to chip away at that privilege.

My hon. Friend is correct to say that the privilege is designed to protect clients. Although the hon. Member for Glasgow, Pollok said that that was ''a likely story'', it remains the case, and the Government's Back Benchers must be conscious of that.

Mr. Grieve: I agree entirely with my hon. Friend. I mentioned that there were further issues under the investigatory powers in part 8 of the Bill that caused me serious worries.

Mr. Ainsworth: May I repeat my point and, I hope, satisfy the hon. Gentleman? The legal adviser will be protected from any professional duties of confidence by clause 327, which I am told overrides the duty of confidence to the client.

I can also tell the hon. Gentleman—I have said this before—that the same definition of legal privilege is in the current money laundering regulations. Currently, NCIS encourages people to seek advice from the ethics division of the Law Society if they are uncertain whether to disclose. The hon. Gentleman is worried about encroachment, but I am not sure that he has real grounds for that.

Mr. Grieve rose—

Mr. Carmichael rose—

Mr. Grieve: I get the impression that the debate could continue fruitfully beyond my response to the Minister, and I hope that that will be possible. I see you shaking your head, Mr. Gale, so I shall give way to the hon. Member for Orkney and Shetland now.

Mr. Carmichael: Again, does the hon. Gentleman share my concerns about what the Minister said? He said that solicitors are encouraged to report matters to the ethics division of The Law Society. That is perfectly proper, but it is different from what he said earlier about reporting things when in doubt.

Mr. Grieve: I entirely agree with the hon. Gentleman. On occasions, I have sought the advice of my professional body about problems that arose in my professional practice. The Minister says that

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notwithstanding the advice that the Bar Council gave me, I should be under an obligation to disregard that advice in a case of doubt. Curiously, the more our discussion continues, the more convinced I am that the amendment should be put to the vote. I am increasingly worried about the general drift on legal professional privilege.

Mr. Ainsworth: Is the hon. Gentleman trying to achieve a position whereby a lawyer who is conducting financial activities for his client should escape the requirements of the clause when no criminal proceedings are involved? That is how it appears.

Mr. Grieve: No, the Minister is wrong. If a lawyer is conducting purely financial dealings for his client, without providing advice, and the lawyer says subsequently, ''I believed that I was covered by legal professional privilege,'' he would be laughed at, and rightly so. However, circumstances will arise in which an individual will legitimately be asked by a client to do two things at once. The question arises: which is the primary and which is the secondary function? Grey areas exist, and a solicitor would be sensible to ring up the Law Society of England and Wales, or the Law Society of Scotland, and obtain advice. The Minister is not saying, ''If in doubt, you can get the advice of your professional body, and the Government would not then criticise you.'' He is saying that a legal adviser can be prosecuted on the grounds that he was negligent if a view is taken subsequently, with the benefit of hindsight, that legal professional privilege was not attached to the advice or activities that he was carrying out. That troubles me.

On the whole, negligence should be a matter for professional bodies, and criminality should be a matter for the courts. I do not care for the mixing of the two, especially when lawyers may be placed in difficult situations.

 
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Prepared 24 January 2002