In its recent decision in Federation of Law Societies of Canada v. Canada (Attorney General), the British Columbia Supreme Court (the Court) affirmed the importance of the solicitor-client relationship, and declared certain federal legislation unconstitutional because it would have interfered with that relationship. This case confirms the importance of solicitor-client privilege, and prevents governments from regulating lawyers for the purpose of accessing client information. By prior agreement among the parties, the decision is nationally binding.
The case concerned the challenge by the Federation of Law Societies of Canada (FLSC) to the application of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Act) to the legal profession. The FLSC is the national co-ordinating body of Canada’s 14 provincial and territorial law societies that govern over 100,000 lawyers and 3,500 Quebec notaries in the public interest. The FLSC argued that the Act violated section 7 of the Canadian Charter of Rights and Freedoms by requiring lawyers to act against their clients’ interests.
The purposes of the Act include detecting and deterring money laundering and terrorist financing, facilitating the investigation and prosecution of such offences, and fulfilling Canada’s international commitment to fight transnational crime. The Act established and empowered the Financial Transactions and Analysis Centre of Canada (FINTRAC), which has a mandate to facilitate the detection, prevention and deterrence of money laundering and terrorist financing by collecting information, analyzing it, and disclosing it to law enforcement agencies.
The Act would have required all legal professionals (including Quebec notaries) to:
- identify clients, and verify their identity, whenever a lawyer received C$3,000 or more in the course of a transaction, as a condition of providing the client with legal advice;
- create and obtain certain records in relation to the client and the transaction, and retain those records for at least five years after the completion of the file; and
- produce to FINTRAC any document or information on demand, including by warrantless search, and provide FINTRAC with client names and contact information.
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Detailed news link: here