Economic Crime and Corporate Transparency Bill

Lord Etherton Excerpts

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Lord Etherton (CB)]

My Lords, for the moment I will restrict my comments for the moment to Clause 183, which amends the Legal Services Act 2007 by inserting a new objective:

“promoting the prevention and detection of economic crime.”

I should say right at the beginning that, like everybody else in the House today—and, I am sure, everybody who is not here today—I certainly support the policy of preventing and detecting economic crime. In that respect, I welcome the broad policy of the Bill.

However, there are two particular points that I think one must bear in mind. The first is that all the powers that are necessary for regulators to regulate the matters that people have spoken about today—and complained about—are there. The problem is that they are not being utilised properly or enforced properly. The existing regulatory objectives include such matters as improving access to justice, protecting and promoting the interests of consumers and promoting and maintaining adherence to the “professional principles”, as they are called. Those professional principles include that authorised persons should act with independence and—critically—with integrity, that they should act in the best interests of their clients, that advocates should comply with their duty to the court to act with independence in the interests of justice and that the affairs of the clients should be kept confidential.

The fact of the matter is that, if a lawyer is himself or herself involved in any kind of criminal activity—the definition of economic crime covers everything in Schedule 7, from theft right through to embezzlement in accounting—not only are they are themselves guilty of disciplinary matters in relation to their professional conduct but they bear the full weight of the criminal law. If it is thought appropriate—and I can quite see why it is thought appropriate—that, because the existing powers are not being used and enforced properly, there needs to be express reference to promoting the prevention and detection of economic crime, we have to be careful that the wording is sufficiently tight so as not to cut across other matters. The word “promoting” in that reference is almost unbounded. The 200,000 or more lawyers who are practising need to understand what they can and cannot do in practice, against the background of established rules such as the fundamental right of confidentiality between a lawyer and a client—that brings me to my second point.

That confidentiality is normally encapsulated in the concept of legal professional privilege. This privilege is the privilege of the client—that is all of us, were we to consult a solicitor or a barrister—not the lawyer. It is a fundamental common law constitutional right. It applies to communications made confidentially for the purpose of seeking or giving legal advice, whether or not litigation was contemplated or pending. There is also litigation privilege, which applies to communications that come into existence for the purpose of litigation.

The reason for this privilege is that there must be the fullest possible communication between the solicitor and barrister, so as to enable the client to be properly advised and represented. In a case in the Judicial Committee in this House reported in 2003, Lord Hoffman described it as follows:

“LPP is a fundamental human right long established in the common law”—

and the European convention.

“It is a necessary corollary of the right of any person to obtain skilled advice about the law. Such advice cannot be effectively obtained unless the client is able to put all the facts before the adviser without fear that they may afterwards be disclosed and used to his prejudice.”

We have to remember that both solicitors and barristers frequently act for and give advice to people who either have committed or may be about to commit financial crimes, fraud, embezzlement, false accounting and all the other matters in Schedule 9, and they may do so for perfectly legitimate reasons, whether in relation to criminal proceedings or to avoid committing an offence—structuring one’s affairs in an honest and appropriate way. How can those who act for such clients comply with their professional obligations if they have a broad duty to prevent and detect economic crime? That is a critical issue: the wording is so wide that it is capable of cutting across, for example, this fundamental right, which has been described, as I said, as a long established common law constitutional right of every citizen. If it is the intention behind the legislation that that right, for example, is to be cut down in the interests of promoting the prevention and detection of economic crime, that must find its place on the face of the Bill so that we can see it there and debate it separately.

In relation to SLAPPs, I can see why it is necessary to deal with them but, again, one has to be very careful how it is worded. It should be on the face of the Bill—a Bill; this Bill or some other Bill—so that it can be properly debated, so that there is no denial of access either to legal advice or to proper representation in court. Subject to those qualifications, which we have to bear in mind, I too welcome the Bill.