Legal privilege for accountants opposed by lawyers

The Independent quotes the Bar Council as saying such moves could lead to another Enron as accountants would be relieved of their duty to blow the whistle on money laundering. The Home Office is proposing to amend the current money-laundering regulations because they are not compliant with European Union law, which gives accountants the same legal protection as lawyers. As the law stands, accountants must report suspicious activity by their clients. Members of the legal profession have only to show that they have exercised their discretion responsibly in deciding whether to alert the authorities. Accountants, it is argued, do not have the legal training to make this judgment. Full report in The Independent

New Zealand intends to follow the same route. Finance Minister Michael Cullen has announced that tax advice from chartered accountants is to be legally privileged, just like that from lawyers. The New Zealand Herald reports accountants have welcomed the move, saying this would level the playing field. Deloitte’s tax partner Thomas Pippos said some senior tax accountants believed lawyers had used privilege as a marketing tool, advising their clients not to seek advice from accounting firms because the advice was not privileged. A new tax Bill will be introduced in November. Full report in the New Zealand Herald

The issue of solicitor-client privilege comes under scrutiny in Canada where a report in The Globe and Mail says lawyers are anxiously discovering that privilege has its limits, particularly in the increasingly scrutinised world of corporate law. The Enron Corp and Hollinger International scandals are making plain that a lawyer\'s advice can in some cases be fair game for public or even courtroom consumption. It is becoming especially unsettling for so-called corporate, or in-house, counsel – the salaried lawyers who work directly inside companies and who may hold dual responsibilities as both business executives and legal watchdogs. ‘There are more and more cases of people trying, successfully, to obtain evidence from corporate counsel that might previously have been thought to be protected by privilege,’ says insolvency lawyer Fred Myers. Full report in The Globe and Mail

And in Australia, in-house lawyers have been given a jolt after a judge ruled a defence force lawyer could not claim professional privilege because he was obliged to follow orders. The Sydney Morning Herald reports Justice Ken Crispin, of the ACT Supreme Court, said documents relating to the dismissal of Squadron Leader Russell Vance were not protected because the defence lawyers did not have sufficient independence to support a solicitor-client relationship. He said their first duty was to follow orders, which meant they could be obliged to act in a way that could violate professional ethics and their duty to a court. Full report in the Sydney Morning Herald