Partner - Business Crime and Regulatory
One of the questions I get asked most often as a member of the Law Society’s Anti Money Laundering (AML) Register is how solicitors should deal with privileged material when the police turn up with a production order under the Proceeds of Crime Act.
Often this will be in the context of a conveyancing transaction, as it is not unusual for fraudsters to use property purchases as a means of laundering money, or fraudulent back to back transactions as a means of artificially inflating a mortgage advance and pocketing the difference.
Occasionally the solicitor will be part of the problem, but more often than not an innocent solicitor will be duped into lending a cloak of respectability to the transaction and then find the police at his or her door demanding the file. At this point the first request should be to see a copy of the production order, and if there isn’t one, a polite reminder that the file is confidential and a suggestion that the police go away and come back properly armed with an order.
Obviously, although it is worrying how often this is misunderstood by solicitors, a production order will exclude privileged material, and privilege is absolute. The police don’t like (or don’t understand) this and will often invoke the fraud exemption – “it’s fraud so you have to hand over everything”. Endearing as this is I always take the view that the decision as to whether the fraud exemption applies is one for the objective judicial mind rather than the investigator in the case and that it is still necessary to review the file for privileged material, before handing it over.
As solicitors often point out, much of a conveyancing file is not privileged, although advice privilege still applies, and you need to get it right. If in doubt, and with the police standing there waiting for the file, my feeling is it is best to hold on to material that you think might be privileged and then take advice from a specialist as to whether it actually is. Also, it can often be the case that if you tell the police in very general terms the category of material that you have withheld, you subsequently find out that they are not interested in pursuing it, as they already have what they need from the material handed over.