22. Written evidence from the Law
Society of Northern Ireland
There are several preliminary points I might
usefully make to provide some context for these issues. The first
is that in the discharge of its responsibilities as regards the
ethics, standards and education of the solicitors' profession,
the Law Society is committed to upholding and promoting the rule
of law. We are committed also to upholding the core values of
the legal profession, including its independence of the state
and the proper and lawful protection of client confidentiality.
We believe that both of these commitments and objectives are right
in principle, and would command the confidence and support of
the Committee.
The practical expression of these commitments
in terms of the involvement of any solicitor involved in criminal
activity is clear. The Society is committed to doing all we can
within the scope of our remit and authority to promote compliance
by solicitors with the law in the conduct of their practice. (For
example, in the immediate context of your inquiry, solicitors'
obligations under the Proceeds of Crime legislation). Solicitors
are of course subject to the normal criminal law.
Where evidence is obtained or received by the
Society in the course of its regulatory work which suggests the
commission of a criminal offence the consequences are two-fold.
First, our policy (based on the terms of the Criminal Law Act
(NI) 1967) is to report the matter to the relevant authorities
where we have a reasonable basis for believing that an offence
has been committed. You will appreciate that the powers conferred
on the Society by statute are (quite rightly) focused primarily
on the protection of the interests of clients rather than the
investigation and prosecution of criminal offences, which is properly
the function of the several prosecution agencies. The Committee
will understand that the Society is not empowered to conduct the
same kind of investigation with the same range of powers available
to the state authorities, and that the Society is not and should
not be an agent of the state. Nevertheless we have in place an
extensive range of monitoring processes, details of which are
summarised in the enclosed Note A. We believe we can demonstrate
that these processes are at least as effective as elsewhere in
the British Isles. In any event in the circumstances I have described
a report is made to the relevant authorities in accordance with
the policy set out above. The Society is also subject to obligations
specific to the proceeds of crime/money laundering regulations
to report money laundering activities of which we become aware.
The second potential consequence where there
is cogent proof of criminality is that this will result in action
taken by the Society to bring professional disciplinary proceedings
against the solicitor concerned before the separate and independent
Solicitors Disciplinary Tribunal. This may result in a range of
disciplinary sanctions being imposed, ranging from fines through
suspension from practice and the ultimate sanction of "striking
off" the solicitor. I comment below in more detail on our
experience to date in respect of cases in which we understand
there to have been some connection between the solicitor and organised
crime.
You mention in your letter that the Committee
has received evidence from a range of sources in the course of
the inquiry. In the terms of your letter these are referred to
as "reports of members of the profession who may be dishonestly
assisting organised criminal gangs". It is not immediately
clear from your letter whether these reports have been received
by the Committee as part of the public record or in the course
of private meetings, but in any event we have no information as
to the basis, source, quality or nature of the evidence which
has been presented to the Committee.
I believe it would be commonly accepted that
the percentage of solicitors who become deliberately and consciously
involved in assisting organised crime is extremely small (there
are currently some 2,000 solicitors in private practice in Northern
Ireland). It seems clear that the vast majority of solicitors
are concerned to be able to observe proper ethical standards,
and are concerned to understand and comply with their obligations
under the law. This is so, notwithstanding the complexities of
those obligations, in particular the uncertain and evolving case
law on the sometimes complex interface between the requirements
to report and the obligation to maintain the confidential nature
of the individual citizen's private affairs, as reflected in the
principle of legal professional privilege (see, for example, the
English Court of Appeal decision in the case of Bowman -v-
Fels).
This being so, a concentrated effort has been
made by the Society to promote understanding and compliance by
the profession with their lawful obligations. I enclose Note B
which identifies the extensive formal guidance promulgated by
the Society, and the various means by which training in this matter
has been delivered. We anticipate that a high priority will continue
to attach to this work in the future.
In the same connection it might be helpful for
me to confirm that contacts and working relationships between
the Society and the prosecution agencies is evolving and improving.
Obviously we share the common objective of upholding the rule
of law. Thus, for example, within the past few months we have
held a meeting with the most senior Assets Recovery Agency personnel
in Northern Ireland, the Society being represented by the President
and me. We had the opportunity to discuss issues of mutual interest,
and the dialogue has resulted in several useful proposals for
enhancing compliance. We have had frequent contact with the police
authorities over recent years, usually in connection with individual
cases. I think it is fair to say also that in part any problems
in effective dialogue have arisen from a perception of disparate
responsibilities within the prosecution authorities which are
not always easily or fully understood. (For example, the PSNI
Fraud Office, the Assets Recovery Agency, the National Criminal
Intelligence Service, the PSNI Economic Crime Bureau, HM Customs
and Excise and the Serious Organised Crime Agency). I confirm
that our intention is to maintain and improve these lines of communication.
As matters stand at present, apart from information
which is in the public domain, we have no knowledge or information
about the reports which have been made to you, or the evidence
on which they are based. This being so, it is impossible for us
to comment. What we can confirm is that as and if the authorities
make information available which requires action by the Society,
those matters will be properly and fully addressed.
Against this overall background, I can deal
more briefly with the series of questions you have raised. Incidentally,
as regards your use of the term "malpractice" I have
assumed that in context the point of Committee concern is not
the various types of regulatory breach which may constitute professional
misconduct, but more specifically malpractice in circumstances
which suggest some financial or other irregularity connected to
organised criminal activity of third parties, perhaps most obviously
paramilitary activity.
1. I have set out in the enclosed Note A
(not printed) the nature of our monitoring and regulatory processes.
I have also explained above the basis on which
information is reported to the authorities as and when it becomes
available to the Society.
2. I have mentioned above that in individual
cases we have had regular contact with the police authorities,
particularly the Serious Fraud Office. I have explained the more
structured basis of our recent contacts with the Assets Recovery
Agency. I have also identified the potential for a more structured
contact at senior level with the Police Service of Northern Ireland
and other prosecution agencies, perhaps on a more unified and
coherent basis.
3. We are aware of two instances in which
the circumstances of an investigation by the Society has suggested
some connection with organised crime. In both cases a report was
made to the authorities at an early stage, immediately after the
Society became aware of the information, and pursuant to the policy
I have set out above. In both cases the solicitor concerned has
already been subject to disciplinary proceedings by the Society
in respect of the conduct of his practice, and both have in fact
been struck off. The question of criminal investigation and proceedings
is a matter for the prosecution authorities.
4. We have no direct knowledge of any other
cases which have been investigated or prosecuted without reference
to the Society, nor as to the extent of any involvement with organised
crime. We understand that two solicitors have been convicted of
failure to comply with money-laundering obligations (in connection
with which professional disciplinary proceedings are pending)
and one other solicitor is presently subject to prosecution.
5. Solicitors are under a general regulatory
obligation to draw the attention of the Society to breaches of
the Society Regulations. This requirement attaches to professional
obligations generally. In terms of obligation to report criminal
activity and evidence thereof on the part of any other person,
solicitors are subject to the same obligations as any other citizen,
subject only of course to the obligations of client confidentiality.
6. The obligation to report in connection
with suspected money-laundering is the same as that which is imposed
on any other business or financial institution, subject only to
consideration of issues of legal professional privilege to which
I have already alluded. As I have explained the policy of the
Society is to promote and encourage full compliance by solicitors
with their legal obligations.
J W Bailie
Chief Executive
6 June 2006
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