The principle of client confidentiality is under attack from all sides and private client lawyers do not expect the situation to improve any time soon.
The chief culprit for the erosion of lawyer/client privilege is the Proceeds of Crime Act 2002, which requires lawyers to report their clients’ suspicious transactions to the National Criminal Intelligence Service (NCIS) or face possible criminal charges. Informing clients that you have reported their transaction could potentially produce the same result, leaving private client lawyers with an impossible dilemma between their duty to the client and their legal obligation to report transactions.
Unfortunately, the act does not very carefully define what actually constitutes a ‘suspicious’ transaction, and for that matter what the ‘proceeds of crime’ are. The definition seems to be very broad, as is the range of crimes covered. While legal professional privilege may apply where the client has asked for specific legal advice, it is currently far from clear in which situations those would be as, again, the language of the act is not very clear.
