Money laundering, terrorist financing and the Bar: an update
On 27 April 2017 the Criminal Finances Act 2017 was granted Royal Assent. This opened the way to substantial amendments to the proceeds of crime and anti-terrorist financing legislation, including the extension of the ‘consent regime’ moratorium period, ‘unexplained wealth orders’ and ‘further information orders’. More recently still, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations came into force on 26 June 2017. Both items of legislation follow on from earlier additions and alterations to the already frequently amended law in this field.
The seemingly remorseless slew of legislation, authority and rules of practice can feel almost overwhelming. The associated obligations flowing from government efforts to combat money laundering and terrorist financing areequally challenging. In order to address this the Bar Council, through the Money Laundering Working Group, is leading a dialogue with the government to help it understand the unique nature of practice at the Bar and, where possible, to reduce the regulatory burden upon the profession.
Message from the front
It is important that the Bar’s message on this front is heard. Lawyers were ranked third in a list of professions most vulnerable to money laundering by the Home Office last year, beaten only by bankers and accountants. The 2015 National Risk Assessment adjudged the legal sector to be ‘high risk’. Unfortunately, the label was applied to the whole sector with no distinction being made between the profession’s constituent parts. Barristers were labelled ‘high risk’ despite the assessment not containing a single reference to barristers or the Bar. The Bar Council is working hard to ensure that a different approach is taken, and the right conclusion reached, in the new National Risk Assessment.
Bar has a low-risk profile
For various reasons, the Bar is simply not attractive to money launderers and the financiers of terrorism. The majority of barristers are in private practice, whether in chambers or sole practitioners and receive their instructions either directly from the public or, more commonly, from another professional. In relation to the latter, the instructing professional will ordinarily already be subject to the UK’s anti-money laundering and counter terrorist financing (AML/CTF) regime. Additionally, that person will be closer to the lay client, and is likely to have a more active and wider role than any barrister in relation to a particular transaction or situation.
Moreover, as concerns instructions from a professional client, barristers are bound by the ‘cab rank rule’, which means that they are not free to decline any lawful instructions, and cannot ‘pick and choose’ their clients or the instructions that they are willing to accept. In relation to both types of instructions, barristers are not permitted to handle client funds or carry out or execute transactions for clients.
In addition, the majority of work carried out by barristers in private practice is advocacy or advisory based. Most commonly, it is related to disputes, rather than transactions. As such it falls outside the area of greatest risk to money laundering and terrorist finance activity. While some practitioners in specialist fields of practice are involved in non-contentious transactional work (eg tax barristers and Chancery barristers involved in advising on trust formation), they are generally instructed by other professionals (usually solicitors) who deal directly with the lay client. Even then the barrister will not be the person carrying out or executing the transaction on behalf of the ultimate client. The barrister is usually only instructed to advise on particular issues, and occasionally to assist in drafting work.
Support is available
However, the profession and those who support it are not complacent. In addition to having an intrinsically low risk profile, the Bar has access to comprehensive and effective guidance and robust AML/CTF support mechanisms:
- Bar Council AML/CTF guidance is updated regularly and a further update is being prepared to address the new regulations. It will be released once HM Treasury approves wider guidance aimed at the entire legal sector – which the Bar Council is fighting hard to ensure reflects and assists practice at the Bar. Please look out for both pieces of guidance later this year.
- Another mechanism is BARCO. Many direct access qualified barristers who take instructions directly from lay clients rather than solicitors use this escrow account service to handle clients’ money on their behalf. BARCO includes built-in anti-money laundering features such as background checks and software to upload identification documents.
- Bar Council AML training and awareness events are available for all barristers, and ongoing training is compulsory for direct access barristers. All this means that barrister have access to clear direction relevant to their daily practice.
- Finally, barristers are also able to call the Bar Council’s Ethical Enquiries Service for one-to-one support when they face ethical questions relating to AML or CTF, even if such issues arise in the middle of a complex case. This service is freely available to all Bar Council members and barristers’ clerks, although we always encourage you to discuss issues in chambers and with your peers first where you can. Ethical Enquiries Service: 020 7611 1307.
Christopher Convey, Bar Council’s Ethics Committee
Will counsel assist the court? Rules for court appointed advocates
An increasing phenomenon in the Crown court is for a judge to enquire if counsel will assist the court, often mid-trial, by representing an unrepresented defendant.
It throws up a number of issues, from ‘Do I have to?’ (ie does the cab rank rule apply?) to ‘What is my actual role and for how long am I appointed?’ and the more prosaic, ‘If it is not covered by AGFS, how do I get paid?’ The Ethics Committee has recently published new guidance on the issue: bit.ly/2uZo9eI.
Statute and procedural rules
Court appointed legal representatives are appointed pursuant to s 38(4) of the Youth Justice and Criminal Evidence Act 1999, to act on behalf of an unrepresented defendant (who does not wish to instruct his own legal representative) to conduct the cross-examination of one or more witnesses, if the court considers that it is in the interests of justice to do so.
Three things follow:
- It must be in the interests of justice to appoint the advocate;
- he/she remains independent, ie is not the representative of the court; and
- he/she is not responsible to the defendant, but is appointed to represent his/her interests.
Part 23 of the Criminal Procedure Rules provides for the procedure to be followed by the court and, importantly, that the court must direct what material is to be supplied to the appointed advocate, including ‘by whom and when it must be supplied’. CrimPR r3.9 also provides that, in order to prepare for the trial, the court must take every reasonable step to facilitate the participation of any person, including the defendant.
The parameters of the appointment by the court were considered in the case of Abbas v CPS  EWHC 579 (Admin), in which Hallett LJ stated that the statutory provisions:
‘are all about protecting vulnerable witnesses from cross-examination from the accused. Therefore, it should not be thought that an advocate appointed under s 38 has a free-ranging remit to conduct the trial on the accused’s behalf. The… [advocate must] ensure that they are in a position properly to conduct the cross-examination [which] might include… applications to admit bad character of the witness and/or applications for disclosure of material relevant to the cross-examination.’
Duration of appointment
The duration of the appointment is confined by the limitations imposed by statute. It might be necessary to cross-examine more than one witness (including defence witnesses) and to have witnesses recalled after the defence case if cross-examination/further cross-examination is warranted.
Thereafter, the advocate has no further role to play. It is therefore essential to obtain clarity from the trial judge; to have access to all material that will assist in any cross-examination (or associated legal application/argument); and to ensure the defendant understands that the advocate’s role is limited – and that he/she is a court appointed representative, not instructed by the defendant. It is of course open to the defendant to apply to be represented by the advocate; in which case the court appointment would cease.
The rate of remuneration is determined ex post facto by the National Taxation Team. The costs case of R v Andrews (2016) SCCO Ref 66/16, 23.06.16, ruled that there was no provision, statutory or otherwise, for payment for counsel to remain after the essential evidence. It gives helpful guidance as to the levels of remuneration for appropriate work reasonably undertaken, including allowing for counsel to familiarise themselves with any relevant unused material provided by way of the disclosure process.
It is of note – and also concern – that the cab rank rule does not apply to the appointment of legal representatives by the court. The Ethics Committee has asked the Bar Standards Board to review this.
As with all guidance documents issued by the Ethics Committee, it should be remembered that the guidance does not constitute legal advice – it is always the responsibility of the individual advocate to act in a way which is consistent with their ‘core duties’ (see Part 2 BSB Handbook – The Code of Conduct).
Ed Vickers QC, Bar Council's Ethics Committee