There are provisions in the Proceeds of Crime Act 2002 and in the Terrorism Act 2000, which penalise, with the threat of imprisonment, persons who fail to disclose varying degrees of knowledge, belief or suspicion of the commission by others of money laundering and terrorist offences.
Lawyers are, however, under a professional and legal obligation to keep the affairs of clients confidential and to ensure that all members of their staff do likewise. This duty of confidence is fundamental to the relationship that exists between lawyer and client. It extends to all matters divulged to a lawyer by a client, or on his or her behalf, from whatever source. The circumstances in which lawyers are able to disclose client communications are strictly limited. Certain confidential communications, however, can never be revealed without the consent of the client; they are privileged against disclosure. This protection is called legal professional privilege ('LPP').
Lawyers also have a duty of full disclosure to their clients. However, Sections 333A and 342 of the Proceeds of Crime Act 2002 prohibit disclosure of information in circumstances where a suspicious activity report has been made and/or where it would prejudice an existing or proposed investigation.
This section considers the tension between a lawyer's duties and these provisions of the Proceeds of Crime Act 2002 and the Terrorism Act 2000. In particular, the meaning and scope of LPP, the nature of the comparable protection (the privilege reporting exception) afforded to other relevant professional advisers (such as accountants), and the differences between LPP and the privilege reporting exception are outlined.