The Law Society is to make its long-awaited court challenge to the money laundering regulations in a Court of Appeal case to be heard at the end of November.

The case, Bowman v Fels, represents the first opportunity for the Court of Appeal to consider the money laundering provisions of part 7 of the Proceeds of Crime Act 2002 (POCA), and in particular the extent of legal advisers' duties.


A key issue at stake is the interpretation of Dame Elizabeth Butler-Sloss's comments in P v P [2003] EWHC Fam 2260. She said that once a report or disclosure has been made to the National Criminal Intelligence Service (NCIS), a person must not take any further steps in relation to an 'arrangement' until notice of consent, deemed consent under POCA, or refusal of consent is obtained from NCIS.


The Court of Appeal will consider whether in the interim period legal advisers can continue preparing for an imminent trial. The judges will also assess what information about a report or disclosure to NCIS should be told to an opposing party's legal advisers.


A Chancery Lane spokesman said: 'The Law Society is intervening in the case because it involves legal issues of general importance to the profession. It is hoped that the appeal will also clarify the circumstances in which disclosures need to be made to NCIS during the conduct of litigation.' It is understood that the Law Society will be advocating for a narrow interpretation of the regulations.


In August, Law Society President Edward Nally had indicated that a court challenge was imminent (see [2004] Gazette, 19 August, 1).


Speaking at the Solicitors 2004 conference in Birmingham last Friday, he said: 'The Law Society will not ignore the growing uncertainty and concern being voiced by the profession and our clients about the impact of POCA and the Money Laundering Regulations of 2003. The current regime is too complex and onerous.'


Mr Nally also called for the 'all crimes' test under POCA to be reviewed, and for the government to report on the regime's impact.


See Conference speech