The European Court of Justice has questioned whether legal professional privilege is a fundamental right or a core principle of professional practice, and also whether it provides lawyers with a competitive advantage, delegates in Chicago heard.

Colin Tyre QC, the Scottish advocate who is also vice-president of the Council of Bars and Law Societies of Europe (CCBE), told a session on anti-money laundering that the probe came during argument in the legal profession's challenge to the Second Money Laundering Directive - which prompted the Proceeds of Crime Act 2002 - earlier this month. It is understood that the questions did not betray which way the court is thinking.


Mr Tyre reported that European institutions and several national governments intervened to oppose the Belgian bar in its challenge to the directive. The CCBE was the only body to intervene on the bar's side.


The pair argued that the obligation to report suspicious transactions breaches the right to fair trial in the European Convention on Human Rights because the client is likely to be deprived of the services of his lawyer once the report has been made, and also


because the client is condemned by virtue of information he gave to his lawyer.

Mr Tyre explained that the EU treaty requires the union to respect fundamental rights guaranteed by the convention, so a breach of the convention would be a breach of the obligations under the treaty.


They submitted that other fundamental rights were threatened, such as the independence of lawyers, confidentiality, and the right to respect for private life.


In response, the European Commission said the exception in the directive, which applies to advice given 'in the course of ascertaining the legal position', offered a sufficient margin of discretion to national legislatures to accommodate lawyers' concerns; the Belgian bar and CCBE countered that it was so vague as to breach the right to a fair trial, especially given the different ways in which it has been interpreted across the EU.


The Advocate-General is expected to deliver his opinion on the case in November, although it could be another year before the full court comes to its conclusion.


Meanwhile, Nadim Kyriakos-Saad, a lawyer at the International Monetary Fund, revealed that the fund has begun researching lawyers' compliance with anti-money laundering requirements.