The Law Society has reiterated its objection to general counsel being included in an accountability regime introduced for top executives following the 2008 financial crash.
The Financial Conduct Authority published proposals over the summer to extend its senior managers and certification regime to all financial services firms, making individuals more accountable for their conduct and competence. However, it has still not announced whether the regime will extend to the head of the legal function.
In response to a consultation on the question, Chancery Lane stresses the importance of excluding the legal function. Significant risks for clients and solicitors include legal professional privilege being eroded, the Society warns.
Legal professional privilege, which has existed for over 400 years, 'ensures that clients can freely consult with lawyers safe in the knowledge that the information they provide and the advice that they receive cannot be used against them,' the Society says. 'Furthermore legal professional privilege plays an important role in ensuring the proper administration of our justice system and is vigorosuly protected by our judiciary'.
As a result, lawyers' ability to provide full and frank advice to its clients such as their employer, could be impaired. The Society says: 'In the event of an investigation by the FCA, a lawyer within a firm may take the view that it is in their personal interest for [privilege] to be waived by a client and certain documents disclosed where those documents may demonstrate that the lawyer acted properly. However, the client may take the opposite view and decide not to waive privilege.'
The Society urges the FCA to consult fully on removing the legal function from the regime. In the meantime, the watchdog should not take enforcement action against lawyers who are currently caught up in the regime.
Meanwhile Chancery Lane has announced that it is seeking permission to intervene in the appeal in a between the Serious Fraud Office and mining company the Eurasian Natural Resources Corporation which is likely to test whether internal legal documents relating to criminal investigations must being handed over to prosecutors.
Joe Egan, Law Society president, said: ‘The right for anyone to communicate confidentially with their lawyer is a fundamental part of our legal system and we want to ensure that this right is protected for all of us, including corporations.’