Lawyers deflect European threat to fraud privilege

Europe's lawyers have successfully lobbied the European Parliament to protect legal professional privilege from being impinged by a European anti-money laundering directive.The directive was scheduled to be approved by the Council of Ministers this month, but has now been delayed by six months.

The draft directive sought to oblige lawyers to report suspicious clients to the relevant authorities with only one exception: when the lawyer is acting for the client in relation to live court proceedings.The Law Society, in collaboration with the Council of Bars and Law Societies of Europe (CCBE), successfully lobbied to have the draft directive changed to allow lawyers to be exempt when they are giving clients general legal advice.Meanwhile, the annual report of Financial Action Task Force said it detected the increased presence of certain professions, especially solicitors, in money laundering operations.Louise Delahunty, a partner at London fraud firm Peters & Peters and chair of the Law Society's money laundering and serious fraud task force, said: 'I don't think this means that solicitors are knowingly involving themselves in organised crime and money laundering.

It's happening because of a global increase in fraud and professions that handle money are being targeted as fraudsters' activities increase and become more sophisticated.'

Jeremy Fleming