Thank you, Mr. Chairman, and thank you for the invitation to appear today.

I have to confess that I was a little surprised to get the invitation, because unlike the rest of your invitees I'm not an expert in terrorism or terrorist financing. I am assuming that I was invited because I have had a little experience with your statute, because I was counsel for the Federation of Law Societies of Canada in challenging provisions of that statute related to the impact on lawyers.

What I've done is prepare a brief for you, which I hope you have, that summarizes the litigation that has taken place. It really took place over about 15 years and ended a couple of months ago with a judgment from the Supreme Court of Canada that struck down certain provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act) and read down other provisions.

What I thought I might usefully do—and hopefully it will be of assistance to you—is to discuss briefly what happened there and why it happened, so that this could be avoided in the future.

It's obviously tempting to try to bring in legislation that will enlist lawyers to obtain information from their clients that could be used to combat money laundering and terrorist financing. But of course that comes into conflict with constitutional principles in this country, both the principle, which has been said to be a principle of fundamental justice, of solicitor-client privilege, the privilege of information and confidentiality of information from clients to their lawyers, and also, as the Supreme Court of Canada has just pronounced in this decision a couple of months ago, the principle that a state must not undermine the lawyer's commitment to the client's cause. In other words, a lawyer has a duty to his or her client, and it has to be an undivided duty, subject to ethical principles, and the state must not undermine that duty.

The additional problem in the legislation had to do with the search and seizure provisions that provided for warrantless search, which the courts are frankly never going to allow on a law office.

There are a couple of messages, it seems to me, out of that litigation. If you're contemplating new legislation with respect to terrorist financing, I'd urge you to be cautious with respect to any efforts to enlist lawyers in that effort against their clients. The legal profession is very sensitive about these matters, and the courts have been pretty protective too of client confidentiality. These are important principles in our constitutional structure, and it seems to me that one of the messages out of the courts pretty consistently is that those confidences will be protected by the courts. The lawyers have a role in the administration of justice, and this all fits together in respect of that role.

The second message, I would suggest, that comes out of this process is that law societies can play a role in this process. Law societies—and I use that term generally for all the legal regulators in Canada, which are provincially and territorially based—have regulation-making powers. As you'll see from the brief, law societies have stepped up in the course of the last 10 to 15 years with regulations that minimize the prospect of lawyers being used as dupes for their clients by, for example, forbidding lawyers from taking large amounts of cash that could be used for money laundering and things of that nature.

There may well be a collaborative role that law societies can play, if the results of your inquiries conclude that there are some additional steps that lawyers could take to ensure that they're not being used inadvertently to assist clients in activities they shouldn't be engaged in.

Thank you.

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