Georges Marciano for Governor of California 2010

March 4, 2009

Lawyers to Turn Informers

Filed under: Uncategorized — Georges Marciano @ 10:26 pm

Lawyers to turn informers

Credit ManagementDec 2003


Lawyers and accountants have an obligation, under the Proceeds of Crime Act, which came into force this year, to report any ‘suspicious transactions’. The intention is to tackle money laundering, but the most senior family judge, Dame Elizabeth Butler-Sloss, has ruled that lawyers must report even the smallest tax evasion.

We know the effectiveness of a poacher turned gamekeeper, but what of the dilemma of a lawyer who must, by law, turn informer?

Until now, client privilege has meant that what a client told his solicitor, or what the solicitor found out about him, was confidential. Now, suspicious transactions must be reported. One solicitor has pointed out that if a solicitor knows, or suspects, that a client is paying cash to a builder to avoid VAT, it must be reported. If a client offers to pay a solicitor in cash, “and let’s forget the VAT”, not only must the solicitor decline – as any reputable solicitor would – but the solicitor must report the client.

Couples who are divorcing face the prospect that if their solicitors have even the slightest suspicion of tax evasion, there is a duty to report it. Failure to do so could lead to a prosecution against the solicitors, with a maximum penalty of 14 years imprisonment.

So, in the interests of preventing money laundering and fraud, solicitors have to rat on their clients. They must report the matter to the National Criminal Intelligence Service, and they must advise the client that they are doing so. Suppose that the investigation proves that the client was totally honest? Has the client any rights against the solicitor who caused his conduct to be investigated – and, no doubt, for the associated ‘stress’ of any investigation?

There could be some interesting cases to come.

Copyright Institute of Credit Management Ltd. Dec 2003
Provided by ProQuest Information and Learning Company. All rights Reserved;col1

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