Lawyers exempted from anti-terror law, SCC rules

The Supreme Court of Canada today raised a bulwark against government policies intended to weaken solicitor-client privilege in order to uncover criminal transactions.

The unanimous judgment in Canada v. Federation of Law Societies, written by Justice Thomas Cromwell on behalf of the court, renders provisions of Proceeds of Crime (Money Laundering) and Terrorist Financing Act unconstitutional as they apply to lawyers.

The law — which still applies to non-legal professionals — would have required lawyers to record their clients’ financial transactions and make them available to the Financial Transactions and Reports Analysis Centre of Canada. It also would have given investigators search and seizure powers to obtain those records without a warrant.

“These provisions authorize sweeping searches of law offices which inherently risks breaching solicitor-client privilege,” the judgment states. “The search powers … as applied to lawyers, along with the inadequate protection of solicitor-client privilege … constitute a very significant limitation of the right to be free of unreasonable searches and seizures.”

The legislation had attempted to address solicitor-client privilege by drawing boundaries around how it would apply to legal counsel and by providing a mechanism for claims of solicitor-client privilege. Those measures, however, were found woefully inadequate by the Supreme Court, which in its ruling acknowledges the lawyer’s duty of commitment to clients as a fundamental principle of justice — giving it near absolute protection.

As the ruling explains, this duty of commitment is undermined by legislation that would impose a maximum of five years of imprisonment for lawyers who keep certain client information in confidence. The legislation, in other words, creates a conflict where legal counsel would be forced to choose between their clients’ interests and their own.

Tom Conway, president of the Federation of Law Societies, which brought the constitutional challenge, says he’s relieved by the ruling.

“We’re very pleased with the decision. The Supreme Court of Canada has recognized that a lawyer’s duty of commitment to the client’s cause is a fundamental principle of justice. That’s a very important statement about core principles that are at the heart of Canada’s legal system.”

Conway says the anti-terrorism legislation was excessive in how it applied to lawyers, particularly given the measures that law societies across the country have already put in place to counter abuse of solicitor-client privilege.

“In 2004, the Federation of Law Societies of Canada adopted a model rule that dealt with cash transactions, so we’ve had a no-cash model rule for quite some time,” says Conway. “Then in 2008 the Federation of Law Societies adopted a model rule dealing with client identification and verification requirements.”

Conway notes that law societies already undertake regular audits of member activities to ensure lawyers are complying with the “no cash” and “know your client” rules.

“Any member of the legal profession who’s caught participating in these kinds of activities will be subject to law society discipline and possibly disbarment, in addition to any criminal charges that may be applicable,” he says.

Sukanya Pillay is the executive director and general counsel of the Canadian Civil Liberties Association, which was an intervener on the appeal. The CCLA argued that the legislation breached s. 8 of the Charter — which the court confirmed — but also that the legislation would have a detrimental impact on access to justice.

“We believe that access to justice is compromised where legal advice is unavailable,” she says. “We were very concerned that the requirements of the legislation turned lawyers into unwitting agents for the state, requiring them to warehouse records and documents that could be used in future prosecutions, and that this would have a chilling effect on clients and their lawyers, thereby further undermining access to justice.”

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