Canadian Law Societies Challenge Money Laundering Law

VANCOUVER  - The B.C. Supreme Court today granted an injunction exempting lawyers from the new money laundering laws until a constitutional challenge can be heard.

"The decision recognizes the unique relationship lawyers have with their clients," Law Society of B.C. Vice-President Richard Gibbs, Q.C. said.

In granting the temporary exemption, B.C. Supreme Court Justice Marion Allan said the Proceeds of Crime (Money Laundering) Act "authorizes an unprecedented intrusion into the traditional solicitor-client relationship. The constitutional issues raised deserve careful consideration by the court."

The new law required lawyers to report certain financial transactions of their clients to the federal government without advising the client of what they were doing. When the law came into force on November 8, the Law Society of B.C., along with the Federation of Law Societies of Canada, challenged the legislation arguing it violated the constitutional principle that lawyers are independent of the state. The law societies also argued the legislation forced lawyers to breach ethical rules that require them to keep all client information confidential. The Canadian Bar Association was an intervener at the hearing.

"All lawyers support the government's initiatives to stop money laundering, but this law was enacted heedless of the constitutional rights of Canadians," Mr. Gibbs said. "The court's decision preserves the status quo. Lawyers are bound by the Criminal Code and by ethical rules that prohibit them form engaging in money laundering but they don't have to be a secret agent for the state."

No date has been set for the constitutional challenge. "We are ready to go to court today," Mr. Gibbs said, "but the government said it needs at least six months to prepare to defend its legislation."

The Law Society of B.C. is the governing body of the legal profession in British Columbia. The Society's primary mandate under the Legal Profession Act is to protect the public interest in the administration of justice. The Law Society establishes credentials for admission to the legal profession, sets standards of ethics, investigates allegations of misconduct and takes disciplinary action when appropriate.

The Federation of Law Societies of Canada is the umbrella organization of the provincial and territorial Law Societies in Canada.

Law Society of B.C. media contact:
Brad Daisley, Public Affairs Manager
Office: 604-443-5724 or 1-800-903-5300 toll-free in B.C.
Cellular: 604-836-3257
Email: bdaisley@lsbc.org
www.lawsociety.bc.ca