• First Reference
  • About us
  • Contact us
  • Blog Signup 📨

First Reference Talks

Discussions on Human Resources, Employment Law, Payroll and Internal Controls

  • Home
  • About
  • Archives
  • Conference
  • Resources
  • Buy Policies
You are here: Home / Business / Lawyers' commitment to clients' cause a 'principle of fundamental justice'

By Adam Gorley | 3 Minutes Read March 16, 2015

Lawyers' commitment to clients' cause a 'principle of fundamental justice'

Lawyers are not required to collect client financial information, prepare reports on that information and submit to warrantless searches from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2000, according to an important recent decision of the Supreme Court of Canada.

Lawyers not ‘agents of the state’

The issue has been under dispute since the Act began applying to lawyers in 2001. As written, the Act provides that:

  • Lawyers must verify the identity of those for whom they act as financial intermediaries
  • Lawyers must issue a “receipt of funds record” for such transactions over $3,000 unless the funds have come from a public body, and keep such records for five years.
  • FINTRAC may “examine the records and inquire into the business and affairs” of any lawyer, including searching through computers and obtaining copies or prints of records

principle-of-fundamental-justice-fines-prisonPunishment for failure to comply includes massive fines and imprisonment.
The Federation of Law Societies of Canada argued in Canada (Attorney General) v. Federation of Law Societies of Canada, 2015, that the Act violates the protection against unreasonable search and seizure and the right of security of the person guaranteed in the Canadian Charter of Rights and Freedoms (sections 7 and 8). These breaches effectively turn lawyers into “agents of the state” and law firms into “archives for the police and prosecution.”

Commitment to the client’s cause fundamental

The Supreme Court agreed, the majority going so far as to institute a duty of “commitment to the client’s cause” as a principle of fundamental justice. Justice Cromwell J. wrote in the majority decision:

It should be recognized as a principle of fundamental justice that the state cannot impose duties on lawyers that undermine their duty of commitment to their clients’ causes. Principles of fundamental justice have three characteristics. They must be a legal principle; there must be significant societal consensus that they are fundamental to the way in which the legal system ought fairly to operate; and, they must be sufficiently precise so as to yield a manageable standard against which to measure deprivations of life, liberty or security of the person. The lawyer’s duty of commitment to the client’s cause meets this test.
First, it is a normative legal principle and a basic tenet of our legal system. It has been recognized as a distinct element of a lawyer’s broader common law duty of loyalty.
Second, jurisprudence demonstrates that the principle is sufficiently precise to provide a workable standard. It does not countenance a lawyer’s involvement in, or facilitation of, illegal activities and it is consistent with a lawyer taking appropriate steps to ensure that his or her services are not used for improper ends.
Third, there is overwhelming evidence of a strong and wide-spread consensus concerning the fundamental importance in democratic states of protection against state interference with the lawyer’s commitment to his or her client’s cause.
The duty is fundamental to the solicitor-client relationship and how the state and the citizen interact in legal matters. The lawyer’s duty of commitment to the client’s cause is essential to maintaining confidence in the integrity of the administration of justice.

Dissent

The two dissenting judges concurred that the impugned provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act breach lawyers’ Charter rights, but disagreed that it was necessary to institute the duty of commitment to a client’s cause.

Conclusion

It remains to be seen what will happen to the Act. However, it seems likely that the government will rewrite it to attempt to comply with the Charter, since Canada is a member of the international Financial Action Task Force, and the Act is a key part of Canada’s participation in the task force.
In the meantime though, lawyers are not required to comply with the information collecting and reporting provisions of the Act. Importantly, lawyers do still fall under justified record-keeping obligations provincially, and of course it remains a crime to directly or indirectly participate in illegal activities like money laundering or financing terrorism.

Finance and Accounting PolicyPro

Finance and Accounting PolicyPro

Policies and procedures are essential to communicating internal controls but it takes a lot of work to create and maintain them. Finance & Accounting PolicyPro can save you a significant amount of time to draft and update your policies. FAPP offers over 140 sample policies, procedures and authoritative commentary in the areas of finance, corporate governance, operations and marketing.

learn more
  • About
  • Latest Posts
Follow me
Adam Gorley
Editor at First Reference Inc.
Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more.
Follow me
Latest posts by Adam Gorley (see all)
  • Can you implement a mandatory vaccine policy or ask employees if they have been vaccinated? - June 10, 2021
  • Do you know the latest on terminations? Find out at the Ontario Virtual Employment Law Conference - May 11, 2021
  • Announcing the 2021 Virtual Ontario Employment Law Conference - April 15, 2021

Article by Adam Gorley / Business, Finance and Accounting, Privacy / agents of the state, archives for the police and prosecution, Canada v. Federation of Law Societies of Canada, canadian charter of rights and freedoms, Charter, commitment to the client's cause, FATF, Federation of Law Societies of Canada, Financial Action Task Force, financial intermediaries, Financial Transactions and Reports Analysis Centre of Canada, FINTRAC, fraud, lawyers, legal compliance, legal profession, money laundering, principle of fundamental justice, Proceeds of Crime (Money Laundering) and Terrorist Financing Act, receipt of funds record, record keeping, security of the person, solicitor-client privilege, supreme court, terrorist financing, unreasonable search and seizure, warrantless searches

Share with a friend or colleague

Get the Latest Posts in your Inbox for Free!

About Adam Gorley

Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more.

Footer

About us

Established in 1995, First Reference is the leading publisher of up to date, practical and authoritative HR compliance and policy databases that are essential to ensure organizations meet their due diligence and duty of care requirements.

First Reference Talks

  • Home
  • About
  • Archives
  • Conference
  • Resources
  • Buy Policies

Main Menu

  • About First Reference
  • Resources
  • Contact us
  • 1 800 750 8175

Stay Connected

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

We welcome your comments on our blog articles. However, we do not respond to specific legal questions in this space.
We do not provide any form of legal advice or legal opinion. Please consult a lawyer in your jurisdiction or try one of our products.


Copyright © 2009 - 2022 · First Reference Inc. · All Rights Reserved
Legal and Copyright Notices · Publisher's Disclaimer · Privacy Policy · Accessibility Policy