A duty of commitment

By CBA/ABC National February 13, 201513 February 2015

The Supreme Court rules that the solicitor-client privilege must remain “as close to absolute as possible."

A duty of commitment

Last week the Supreme Court of Canada held that search power provisions in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act were unconstitutional when applied to lawyers.

“This is a great victory for both the independence of the legal profession and the public,” CBA President Michele Hollins said, reacting to the decision.

Under the Act, financial intermediaries, including lawyers (and notaries in Quebec), have to report suspicious transactions and large cash transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). They are also required to collect, record and retain material, including information verifying the identity of those on whose behalf they pay or receive money. What’s more the Act allows FINTRAC to search for and seize that material and imposes fines and possible prison terms for non-compliance.

The CBA intervened in the case, supporting the challenge by the Federation of Law Societies that the provisions unjustifiably violated both s. 7 and s. 8 of the Charter. By requiring lawyers to obtain and retain information about their clients, they argued that the scheme turned lawyers into “unwilling state agents” and “law offices into archives for use by the police and prosecution.”

The top court agreed: “Lawyers must keep their clients’ confidences and act with commitment to serving and protecting their clients’ legitimate interests. Both of these duties are essential to the due administration of justice,” Justice Thomas Cromwell wrote for the majority. “However, some provisions of Canada’s anti-money laundering and anti-terrorist financing legislation are repugnant to these duties. They require lawyers, on pain of imprisonment, to obtain and retain information that is not necessary for ethical legal representation and provide inadequate protection for the client’s confidences subject to solicitor-client privilege.”

“The case is about clients, not lawyers,” says Craig Ferris, a partner at Lawson Lundell who intervened on behalf of the CBA with Laura Bevan “ It’s exempting lawyers because it is the client’s information that has to be protected.” Ferris adds that the ruling is important because of the Court’s recognition of the lawyer’s duty of commitment to a client’s cause as new principle of fundamental justice. “There is an ethical duty for the lawyer to be free of conflict of interest,” he told National. “The lawyer must be free to zealously defend the client without fear of state interference.”

Even so, the top court stopped short of recognizing, as a principle of fundamental justice, the broadest possible interpretation of independence of the bar – one that would make it completely “free from incursions from any source, including from public authorities.” That means that self-regulation of the profession is not, in and of itself a constitutionally entrenched notion. Referring to a 2004 decision in Finney v. Barreau du Québec, Justice Cromwell re-iterated the Court’s view that “self-regulation is certainly the means by which legislatures have chosen in this country to protect the independence of the bar” but that doesn’t necessarily mean “that legislative choice is in any respect constitutionally required.”

The majority preferred to accept a narrower version of the independence of the bar, ruling that “the state cannot impose duties on lawyers that undermine their duty of commitment to their clients’ causes.”

By adopting this narrower understanding, the court leaves the door open for government to develop new regulations which meet required constitutional protections for solicitor-client privilege. The CBA says it’s willing to work with law societies and the government to enact a record-collection scheme that complies with the Charter.

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