Proceeds of Crime Bill

[back to previous text]

Mr. Hawkins: Like my hon. Friend, I am becoming more and more concerned. The more the Minister intervenes, the worse the position becomes. I apologise to my hon. Friend, as, having interrupted him, I am now going to raise a point of order.

On a point of order, Mr. Gale. Am I right in thinking that when a matter arises at the end of the Minister's response to the hon. Member who moved the amendment, and the mover of the amendment speaks again before there is time for other hon. Members—such as the hon. Member for Orkney and Shetland and I—to intervene, you could, if you felt it appropriate, and with the leave of the Committee, allow hon. Members who wished to take up that matter to do so after the mover of the amendment has finished speaking? Otherwise, the hon. Gentleman and I will be able to raise the further significant points that arose at the end of the Minister's response only as interventions on my hon. Friend the Member for Beaconsfield. I seek your leave, Mr. Gale, to make a further short contribution before the amendment is put to a vote.

The Chairman: The convention is clear: once the hon. Member who moved the amendment has been called to reply, it is anticipated that no other hon. Member will be called. However, in the circumstances

Column Number: 1151

that the hon. Gentleman has outlined, the Chair has the right to call other hon. Members, and in a moment I shall consider whether I am minded to do so.

Mr. Grieve: In conclusion, I accept that section 52 of the Drug Trafficking Act 1994 defines, in a highly acceptable way—interestingly, the Bill does not do so—legal professional privilege, which applies if information is communicated

    ''(a) by, or by a representative of, a client of his in connection with the giving by the adviser of legal advice to the client;

    (b) by, or by a representative of, a person seeking legal advice from the adviser; or

    (c) by any person—

      (i) in contemplation of, or in connection with, legal proceedings; and

      (ii) for the purpose of those proceedings.

(9) No information or other matter shall be treated as coming to a professional legal adviser in privileged circumstances if it is communicated or given with a view to furthering any criminal purpose.''

The Minister must accept that the matter under discussion is much wider than the furthering of a criminal purpose. It is about suspicion, and declaring and providing information merely because something has floated past one's eyes unexpectedly. That is a much wider problem for lawyers than the definition in section 52 of the Drug Trafficking Act, because the circumstances are restricted in that Act. A legal adviser would have to waive the privilege when considering something that was

    ''communicated or given with a view to furthering any criminal purpose.''

I do not much disagree with the definition of legal professional privilege given in the 1994 Act, but we do not have one in the Bill—at least, not in this clause.

Vera Baird (Redcar): I think that there is one in clause 324(8) in the same terms. I followed the words as the hon. Gentleman read them out.

Mr. Grieve: I apologise to the hon. Lady. She is quite right. However, it still remains the case that the circumstances in which information is likely to come to light are wider in the Bill. I remain concerned about subsection (5)(b). Rather than continue the debate, we should put the matter to the vote, if only to express our concerns.

Mr. Carmichael: I shall be brief, Mr. Gale, because I have already made my point about the Minister's approach, which I urge him to reconsider. I hope that that turns out to be one of those things that is said in Committee but not followed in practice. It is right that the serious concerns felt by me and others should be properly registered.

I have read subsection (8), to which the hon. Member for Redcar has drawn the Committee's attention. Applying my practical mind to that, I can foresee occasions on which solicitors, advocates and barristers might have substantial doubts about whether they are covered by professional legal privilege. Subsection (8) gives a wide and bald definition, which I am pretty certain would, if tested in the courts, give rise to a substantial body of case

Column Number: 1152

law. It has long been recognised that the lawyer-client relationship is in the interests of public policy, and for that reason the amendment is worthy of support.

Mr. Ainsworth: The hon. Gentleman says that the definition would give rise to a substantial body of case law. I ask him to consider whether it would give rise to a substantial number of reports. He and other Opposition Members seem to be saying that there is nothing wrong with the current system. In 2001 NCIS received just 303 reports from 85,000 practising solicitors. Does the hon. Gentleman suggest that that number is acceptable, considering the number of financial transactions that are dealt with by solicitors? Would not he like there to be a substantial increase and improvement in the number of reports made?

Mr. Carmichael: There could be any number of explanations for those figures. Perhaps people are not using solicitors for money laundering as much as was initially thought. There are many more significant players in the regulated financial services sector, particularly since the passing of the Financial Services and Markets Act 2000. Solicitors are now bit-part players in that market. I am not surprised by the small number of reports made by solicitors. It is accountancy, stockbroking and other banking sectors that are worthy of examination.

I am slightly concerned about the implication of some of what the Minister says. He seems to be saying that solicitors as a body are acting unprofessionally. I know that the Law Society of Scotland was rigorous in its audits of the firm that employed me. I can think of one particular occasion when I was pulled in to speak to the auditor and explain why I had not asked a new client for identification in accordance with the money laundering regulations. As it transpires, it was proper for me not to have asked for identification in those circumstances because the client was known to me previously, so I had complied with regulations. I suggest to the Minister that if a solicitor undertaking a small conveyancing transaction in a small legal firm in Macduff is subject to that level of scrutiny, there is not much in the professional money laundering regulations that can be criticised.

11.15 am

Mr. Hawkins: I wish to reinforce the good points made by the hon. Member for Orkney and Shetland and my hon. Friend the Member for Beaconsfield. The hon. Gentleman is probably being too moderate, however, in his balanced and reasonable response to the Minister. I have become more shocked each time the Minister has spoken in the debate. The most shocking thing of all was his intervention in the speech of the hon. Member for Orkney and Shetland, when he said that the Government regarded the matter as a quota exercise. The Minister compared the number of firms of solicitors with the number of reports. I think that he was quoting the global total for England and Wales, but no doubt he will say whether those figures included Scotland.

Neither the Minister nor NCIS can know whether those reports were proper reports, or whether they were the only proper reports. I agree wholeheartedly

Column Number: 1153

with the hon. Member for Orkney and Shetland that as such matters have become increasingly dominated by the City of London, lawyers have become more like bit-part players. That does not mean that the Faculty of Advocates, the Law Society of Scotland and the Law Society of England and Wales do not have huge worries about the extension of negligence to junior staff under the Bill—but I would be out of order if I repeated them, Mr. Gale.

As I suggested earlier, the Minister may be chipping away at legal professional privilege. I have been a Member of Parliament for nearly 10 years and, with others who are legally qualified, I have been involved in many debates to defend both the basis for, and the concept and the retention of, legal professional privilege against the anti-lawyer voices in all parties that have become increasingly strident and worrying. We do not want to make assumptions, as the Minister does, that the very fact that there are only a certain number of reports means that there should be more.

I accept that it would be a proper response to the Bill to say that there will need to be much more reporting by financial institutions and the City of London. Although we have expressed concern that because of the absence of de minimis provisions, there will be many more reports than would be necessary to hit the real criminals, it is proper that there will be a big increase, as there already has been under the current arrangements since 11 September.

How many reports there are, and how many there should be, is relevant to the clause. I have to hand the figures that the Minister and I discussed generally in a previous debate. The NCIS website shows that there was a dramatic increase from 14,500 reports in 1999 to just over 18,000 in 2000. Before 11 September, it was anticipated that under the current law there would be a jump from 18,000 to 33,000. However, after 11 September it was anticipated that the figure would increase further to 40,000.

The Minister and I agree that it is proper that there should be an increase in reports, but those reports from the financial sector reinforce in spades what the hon. Member for Orkney and Shetland said. Despite the huge increase in reporting—with which those in both the financial and the legal sector say that NCIS is not equipped to cope now, never mind what will happen as a result of the further reports—the legal proportion is tiny. That point was made by the hon. Member for Orkney and Shetland, as well by my hon. Friend the Member for Beaconsfield and myself.

I am deeply worried by certain comments that the Minister has made. I know that he is a reasonable man, and is not trying to take a personal stance entirely at odds with his briefing. However, I cannot stress too strongly how worried we would all be if his unguarded remarks, which will be recorded in Hansard, were to undermine the basis on which clients are protected.

I do not blame the hon. Gentleman, because he has never been involved in the legal profession, but he has not fully thought through the implications of some of the comments that he made ''on the hoof'' when he intervened during the speeches of my hon. Friend the

Column Number: 1154

Member for Beaconsfield and the hon. Member for Orkney and Shetland. This is not a personal attack on the Minister, but he will probably find that—even if he cannot accept our proposal or something akin to it—he has to write one of his clarificatory letters saying that that was not really the Government's intention.

I am grateful to you, Mr. Gale, for exercising your discretion and allowing me to express the seriousness of my worries. I hope that in a moment we shall be able to reflect the extent of those worries by pressing the amendment to a Division. Perhaps something along the lines of my hon. Friend's amendment will be accepted as a Government amendment in another place or on Report.

 
Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index


©Parliamentary copyright 2002
Prepared 24 January 2002