Watching the UK news on television while holidaying in Spain, I saw an item about a client who had been arrested for a major fraud.

Despite his request that my firm should represent him, I was unable to because we had informed the investigative authority of our suspicion that he might be laundering money.

This gave rise to several professional dilemmas:-- Should my firm continue to act? We were carrying out property transactions for him, and it was the number of these, unsupported by any mortgage, that led the conveyancing partner to report.

The investigative authority would want normality to prevail, but that leaves the dilemma that not to inform the client would seem partly to be a conflict -- almost a form of entrapment.However, to inform the client might be tipping him off, which is itself a criminal offence.

I did not have to agonise over this because the client had already been under investigation, and was arrested and charged very quickly.

However, if there had been a long period between the reporting and any subsequent proceedings, it would have been a real difficulty.-- How do I tell the client that I cannot act for him in these proceedings? Again I was fortunate because I was able to say that I had been on holiday and that the investigating authority would certainly want to see my firm's files, which would give rise to a potential conflict, or at least put us in a sufficiently embarrassing position and make it inappropriate to act.-- All those in the firm who had carried out work for the client had to attend an interview with the investigating authority and it is an offence to refuse.

Similarly, all files were made available.-- I understood that the client would never know my firm had pointed the finger.

However, before he appeared at court, he made it clear he did.I had paid little attention to the money laundering provisions or, indeed, any debate about the resulting erosion of legal privilege, naively assuming that it would never be a problem for a west country practitioner like me.I recently attended a European Bars Federation meeting where legal privilege was debated.

Our European colleagues were horrified to learn of my experience, and to discover that a number of solicitors were being prosecuted for failing in their duty to report.They felt passionately about the right of legal privilege being a cornerstone of a democratic legal system.

All the delegates believed privilege should be retained without dil ution for lawyers giving advice or involved in litigation.

A requirement to report should only arise where the lawyer was not acting as such but as a financial manager or intermediary.I found it disturbing that Turkey was the country which seemed least likely to face the erosion of legal privilege.

Furthermore, England and Wales seemed to be the only country which was subject to legislation and practice rules.

I was even more concerned to read Louise Delahunty's article 'Coming Clean' (see [2000] Gazette, 28 April, 14), suggesting that the restrictions on legal privilege are likely to be eroded even further.I understand that one solicitor has fled the country as a result of threats to his family after complying with his duty to report; the delegates from Italy and Sicily were particularly worried.While all of the lawyers present accepted the need to come down hard on money laundering, none felt it justified the dilution of a fundamental principle.

There was also considerable doubt as to whether the imposition of this requirement had actually proved of any real benefit in the UK in combating this form of criminal activity.