In October 2011 I wrote about the BC Supreme Court decision in Federation of Law Societies of Canada v. Canada (Attorney General), 2011 BCSC 1270 in which the Court held that provisions of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related Regulations were constitutionally inapplicable to lawyers. Specifically, the Court held that provisions of the legislation requiring lawyers to collect and maintain confidential information about their clients, and their clients’ activities, violates section 7 of the Canadian Charter of Rights and Freedoms and cannot be saved under section 1 of the Charter.
The federal government appealed to the BC Court of Appeal which issued its Reasons for Judgment on April 4, 2013 upholding the decision (2013 BCCA 147). What is particularly interesting about the Court of Appeal decision is that while the Supreme Court decision (and earlier related decisions) were largely decided on the basis of a concern that the legislation does not adequately protect solicitor/client privilege, the Court of Appeal based its decision on the fact that the legislation interferes with the independence of the Bar, a value that the Court characterized as a principle of fundamental justice within the meaning of section 7 of the Charter. In coming to this conclusion, the Court of Appeal accepted the arguments of the Federation of Law Societies, supported by the Law Society of British Columbia, the Canadian Bar Association, the Chambre des Notaires du Québec and the Barreau du Québec, that the legislation puts lawyers in a position of conflict between the duty of loyalty owed to their clients and the obligation to the state created by the legislation. The various law bodies have argued all along that this conflict is untenable in that it undermines the independence of lawyers and therefore prejudices the proper administration of justice in Canada.
While the decision represents a victory for the legal profession, it is arguably of greater significance to the clients that we serve in that it recognizes that clients must be free to consult legal counsel and to speak fully and frankly with their lawyers in order to ensure that they receive proper legal advice.
The federal government is still considering whether it will seek leave to appeal to the Supreme Court of Canada.