Client trust 'at risk' as UK falls into line with Europe

MONEY LAUNDERING: Law unification puts solicitors on spot

Government proposals to unify money-laundering regulations - announced in the Queen's Speech - threaten to undermine client confidentiality, lawyers warned this week.The unification of law exposes solicitors to prosecution if they fail to report suspicious clients to the police.

At the moment, lawyers can only be prosecuted for failure to report drug-trafficking offences.

Kevin Robinson, a white-collar crime specialist with Sheffield-based Irwin Mitchell, said: 'The fact that the National Criminal Investigation Service (NCIS) complains that it gets very few calls from solicitors reflects the tension that exists for solicitors between reporting obligations and client confidentiality.' Mr Robinson said that if thegovernment does introduce such measures 'there will need to be clear guidelines to preserve lawyers' primary duty of confidentiality, without which clients will not trust them'.There is also concern that a new reasonableness test for suspicion will be used for a new single offence - rather than actual suspicion.Louise Delahunty, a partner at specialist London fraud firm Peters & Peters and chairwoman of the Law Society's money laundering and serious fraud taskforce, said this would be of concern to solicitors when deciding whether to report clients.The proposals are designed to bring English law in line with European practice, and complement a Proceeds of Crime Bill, which would give the state power to sue for the recovery of criminal assets in civil proceedings in the High Court.Jeremy Fleming