The Federation of Law Societies of Canada, which regulates the profession, backed by the Canadian Bar Association (CBA), which represents the interests of lawyers, has won seven successive court battles. The federal government has faced the legal equivalent of a no-hitter.
Despite its string of losses, the federal Department of Finance is undeterred. While it has agreed to discuss the situation with the legal profession, lawyers are still firmly in its sights.
“Our main objective is to create money-laundering legislation that protects Canadians. We believe that all intermediaries should be included, and that includes lawyers,” says Andrée Houde, spokeswoman for the department. “We have now gone back to the drawing board.”
At issue are regulations under the Proceeds of Crime and Terrorist Financing Act. That legislation requires a long list of intermediaries, such as financial institutions, real estate agents, brokers and investment dealers, to report cash transactions of $10,000 or more, plus any suspicious transactions, to the new federal Financial Transactions and Reporting Analysis Centre (Fintrac). The list also included lawyers.
When the regulations were first announced on Nov. 8, 2001, Canada’s 14 law societies sprang into action, seeking an injunction in a British Columbia court to prevent the regulations from applying to them.
“It was a no-brainer for us,” says Regina lawyer Maurice Laprairie, past president of the federation.
“It had to be for all 14 law societies to get together like this. By including lawyers among the list of intermediaries required to report to Fintrac, the regulations attacked two of the most important principles our system of justice is based on. The new regulation would make us spies and agents of the government.”
The lawyers won their injunction and applied to the Department of Justice to have that ruling apply all across Canada. The federal government said no. The federation and the CBA then won similar rulings from courts in Alberta, Ontario, Nova Scotia and Saskatchewan. The Supreme Courts in British Columbia and Ontario also ruled in favour of the lower-court decisions.