Bahamas Case Bad For Banking And Professional Confidentiality

by Mike Godfrey, Tax-News.com, New York

02 August 2002

The Bahamas' Supreme Court has supported the jurisdiction's Appeal Court in confirming that legislation pased in 2001 in response to pressure from the OECD and FATF over-rides the duty of a lawyer or other professional adviser to keep confidential details of communication with her clients.

Maurice O. Glinton and Leandra Esfakis, joined by the Bahamas Bar Association, had claimed that to the extent that the legislation subjected "financial services providers" (including lawyers) to routine inspection of their offices and client lists, this placed the lawyer in direct conflict with his or her sworn duty to protect the client’s confidentiality.

The Chief Justice insisted that he was bound by a previous ruling of the Bahamas Court of Appeal, suggesting not that the arguments presented were wrong, but that there can be no injunction on a constitutional matter against a piece of legislation already in force.

Dr Gilbert N M O Morris, Executive Director of The Landfall Centre, says that the position of the Chief Justice is at odds with the situation in a number of other common law jurisdictions, mentioning Bermuda and Canada in particular, where interlocutory relief is possible.

In Dr Morris's opinion, an appeal against the Supreme Court to the House of Lords, which he says is likely, will succeed. Dr Morris quotes Regina v Special Commissioner and Another, Ex P Morgan Grenfell & Co Ltd (2002) in which their Lordships' ruling gave protection, not only for Legal and Professional Privilege (LPP), but also against arbitrary information exchanges.

The importance of this case, and others like it, is considerable, since it brings traditional common law concepts up against prevailing international morality, in which events like 9/11 have lent strength to those who would demolish traditional protections for individual affairs. It remains to be seen who will win.

Recommended