UK Lawyers Welcome Money Laundering Ruling

by Robin Pilgrim, LawAndTax-News.com, London

11 March 2005

UK lawyers have welcomed the clarification of the country's money laundering rules issued by the Court of Appeal in the case of Bowman v Fels on Tuesday.

The case concerned the obligation of solicitors to report money laundering suspicions or face prosecution, and was sparked by a legal property dispute between an unmarried couple, which found its progress through the courts halted over unrelated tax evasion suspicions.

Delivering their verdict earlier this week, three Appeals Court judges announced that they were of the view that the UK's money laundering legislation is not intended to cover "the ordinary conduct of litigation by legal professionals". This means that lawyers in the UK will not be required to report money laundering suspicions about their clients which arise during litigation.

Janet Paraskeva, the chief executive of the Law Society, welcomed the decision, announcing that:

“This radical judgment will eliminate confusion and potential disruption for thousands of clients and lawyers involved in litigation."

She continued:

"The Law Society intervened in this case because we believed that the current interpretation of money laundering legislation was too wide-ranging. An earlier ruling meant that once a solicitor had a suspicion, however small, he or she could not continue with the case until NCIS [National Criminal Intelligence Service] had given consent. As a result, thousands of family cases, for example, were affected because of possible minor tax evasion. This is not what the legislation intended and it has created uncertainty both for solicitors and their clients."

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