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Proceeds of Crime Bill

Proceeds of Crime Bill

Column Number: 1157

Standing Committee B

Thursday 24 January 2002


[Mr. Bill O'Brien in the Chair]

Proceeds of Crime Bill

Clause 324

Failure to disclose: regulated sector

Amendment proposed [this day]: No. 488, in page 187, line 40, after 'and', insert 'believes'.—[Mr. Grieve.]

2.30 pm

Question again proposed, That the amendment be made.

Mr. Dominic Grieve (Beaconsfield): This morning, I was guilty of taking the Committee off at a slight tangent. [Hon. Members: ''Hear, hear.''] The Minister might also have been guilty of that. Therefore, a few matters should perhaps be clarified.

Apart from the definition in respect of professional legal privilege in section 10 of the Police and Criminal Evidence Act 1984 that deals with the seizure of documents, clause 324 derives from section 52 of the Drug Trafficking Act 1994, which is reproduced—almost unaltered, but with a slight variation of no importance—in subsection (8). That definition of professional legal privilege is acceptable.

In the light of the widening of the obligation on the professional legal adviser, the Committee must decide whether to support the amendment's introduction of a defence for the adviser, if he ''believes'' that the information or other matter came to him in privileged circumstances.

I believe that that defence should be introduced. Under the Drug Trafficking Offences Act 1986, someone can commit the offence of failing to disclose only if they know or suspect. The way in which clause 324 is worded, they can commit the offence if they are negligent. Because of that, the legal adviser should be given the extra safeguard that he cannot be prosecuted where he has honestly made an incorrect assessment that the information came to him in privileged circumstances.

I also wish to raise a further matter, which we shall return to when we discuss some later amendments. The statutory definition that is provided is not exhaustive: a glance at ''Halsbury's Laws of England'' or ''Archbold'' illustrates that this is an evolving area of the law, where definitions are not set in stone. It concerns me that a professional legal adviser who acts honestly and responsibly with a client, but who fails to make a correct assessment, could be criminalised—if, for example, he should have made a declaration to NCIS, because the information that he received did not fall within the circumstances of professional legal privilege, although he believed that they did.

If the Minister were to come up with an alternative, even the introduction of the word ''reasonably'', I might be prepared to consider it. In its absence, however, professional legal advisers are entitled to

Column Number: 1158

protection, especially given that privilege does not exist to help lawyers but is a legal obligation on them. The usual way in which that legal obligation is challenged is in court proceedings. However, the irony is that a person may commit the criminal offence without the matter having previously been discussed in a court, which would decide whether the circumstances are such that the privilege has been waived or never existed in the first place.

Vera Baird (Redcar): I am puzzled that the hon. Gentleman thinks that the negligence knocks on to the question of privilege. The offence, which we discussed extensively yesterday, would be negligently knowing or suspecting that money laundering was occurring. That has no bearing on privilege. The information comes to the lawyer. Whether or not he knows or believes that it relates to money laundering, he ought to do so. However, the question of whether the information that comes to him is privileged is not connected with the way in which he can be guilty of non-disclosure.

I would have thought that privilege was a fairly clear concept, which is clearly set out. As the hon. Gentleman now realises that there is a proper definition of privilege in this and other legislation, I cannot understand the purpose of persisting with the matter.

Mr. Grieve: I am afraid that the hon. Lady does not persuade me with that argument. The problem that may confront the professional legal adviser becomes even more complicated as a result of the introduction of the possible offence committed through negligence. It is always difficult to find an example that fits exactly, but one comes to mind. A lawyer is asked to carry out a transaction for a client, and at the same time he believes that in the course of doing so he has been providing legal advice. He may not even believe that he has been given information that indicates that money laundering has taken place, but he might subsequently be convicted, first on the basis that he ought to have realised that money laundering was an issue, and secondly on the basis that he ought to have realised that his actions were not privileged, whereas he thought that they were. That seems to be a double whammy.

The hon. Lady says that the categories are well established. I am not sure that I entirely agree with her about that. As I tried to do over lunch, one simply needs to look at some of the more recent case law on the subject to see that there is still scope for the law to evolve in that area. I had not intended to explore that issue now, as it would be better to deal with it in relation to a subsequent amendment. However, certain areas continue to be explored. I hope that the hon. Lady has understood my point.

Vera Baird: I must say that I do not understand. I cannot see a connection in relation to the circumstances in which information comes to a solicitor, whether it is privileged or not—the definition of what is privileged has survived since 1984, and is the same as it was under the previous legislation. The hon. Gentleman has not suggested ways in which it has hitherto caused difficulty. This compartment of law is fairly watertight—I do not accept what he says about its continuously evolving—

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and I cannot identify a link with the question of negligently not disclosing such information. How does the material come into the person's possession? Does it come in a privileged way or not? The test of negligence is not applied to that question because the material is either privileged or it is not.

There was, perhaps, a tangential move by the Minister and others earlier. If a lawyer came across material that might be in a grey area of privilege, surely he would take that to his professional conduct body anonymously without disclosing the client's identity. He could set out a theoretical proposition and satisfy himself one way or the other.

Mr. Grieve: The hon. Lady may have misunderstood me—that is probably my fault. A professional legal adviser faces a potential double problem. The first question that he must ask himself is, ''Do I know or suspect that money laundering is taking place from the specific information that I have been given?'' If he considers, knows or suspects that money laundering is occurring and that he is being used for the purpose of furthering criminal conduct, no issue of privilege arises, and he tells NCIS.

The second problem arises if the adviser does not know or suspect, but subsequent examination with the benefit of hindsight suggests that he should have had reasonable grounds to know or suspect. That subject troubled the hon. Lady and me, and it was the subject of an extensive debate. In such a case, the adviser may be sent to prison and criminalised. The question of privilege arises when considering that case. It is possible that the adviser considers that the information that came to him was privileged, and not to do with money laundering. It could be held subsequently that the information was not privileged and that the adviser should have had reasonable grounds for knowing or suspecting.

I stand by the fact that a professional legal adviser faces a potential double problem. We will leave one issue aside because the Committee appears to have reached a decision on keeping the negligence offence that a person ought to have known or suspected. However, it would be sensible and desirable not to criminalise and prosecute the adviser if it could be shown that he believed that information came to him in privileged circumstances, even though a subsequent examination, with the benefit of hindsight, showed that the information was not subject to legal professional privilege.

Stephen Hesford (Wirral, West): Would that not give a criminally minded professional legal adviser a complete get-out for any time that he acted criminally? He could claim subsequently, ''I thought I was covered, although it was patently obvious that I wasn't, but I didn't realise.''

Mr. Grieve: I do not think so. As we discussed on Tuesday, a court or jury is able to find that a person knew something, although he denies that he did. An examination of surrounding circumstances ought to make it perfectly possible for a court that is faced with a solicitor who says, ''Oh well, I accept, now I look at

Column Number: 1160

it, that the information was not privileged, but at the time I considered that it was,'' to decide whether that was the case after examining the surrounding circumstances. If the court decided that it would be impossible to reach the solicitor's conclusion, it would be sure that he knew that the information was not privileged, and the solicitor would be convicted. Courts have to do that all the time when considering offences. I accept that it might make the hurdle of conviction more difficult, but I do not believe that it makes it impossible.

Vera Baird: Is the hon. Gentleman suggesting that the clause creates a separate offence: that of negligently thinking that something is privileged when it is not? It does not do that at all. Is not he mixing up two bits of the clause?

2.45 pm

Mr. Grieve: I am always prepared to listen carefully to what the hon. Lady says, but I do not think that I am mixing them up. I am trying to follow her argument. I accept that, as matters stand, a professional legal adviser does not commit an offence if the

    ''Information or other matter comes to a professional legal adviser in privileged circumstances''.

If a court were to conclude that the information did not come to him in privileged circumstances, and if he does not communicate it, he lays himself open to prosecution and conviction, even if he could show the court that he did not disclose it because he genuinely believed that he had received it in privileged circumstances. Such a person could be negligent or make a mistake and still not be able to avail himself of the Bill's protection.


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Prepared 24 January 2002