Solicitors could face an invidious choice between risking imprisonment for failing to report criminal offences that took place abroad and being sued by clients if they do, experts warned this week as the Serious Organised Crime and Police Act 2005 (SOCPA) comes into force.

Lawyers said the provisions in the Act, which were designed to address some of solicitors' concerns over their onerous reporting duties contained in the Proceeds of Crime Act 2002 (POCA), could leave them in a 'double bind'.


Under a section still to be implemented, solicitors will no longer have to report suspected offences committed overseas to the National Criminal Intelligence Service, if they can prove the conduct was not criminal in the country where it occurred. However, if they make a report because it is too difficult to be certain, they could face action for breach of confidentiality.


Peter Burrell, a partner at City firm Herbert Smith, said: 'What happens if the client suffers loss as a result of a report made by a solicitor, when it turns out that the conduct was legal and there was no need to make a report in the first place? Lawyers could find themselves in breach of contract accidentally.'


Jon Holland, a partner at City firm Lovells, said: 'The amendments are pretty close to useless in removing the need for lawyers to report overseas offences. It will often be easier just to report a suspected offence, rather than going through all the hoops to show that it was not unlawful in that country.


'You can go to a lawyer in the country in question... but you risk 14 years' imprisonment if he has got it wrong, and his professional indemnity insurance policy won't be much help to you. Lawyers are not going to want to take that risk. But they are in a double bind, as they could be open to an action for breach of confidentiality if they do make a report.'


Louise Delahunty, a partner at London fraud law firm Peters & Peters, added: 'POCA protects disclosures, but if an incorrect disclosure is made there is the danger of action for breach of confidentiality.'


Law Society guidance on SOCPA will shortly be on www.lawsociety.org.uk.