Lawyers can’t be covert informers on their clients

The Law Council of Australia (LCA) has pushed back against proposed requirements for Australian lawyers to report on clients under the country’s AML/CTF framework, highlighting concerns that the legislation may undermine the lawyer-client relationship and harm access to justice. Speaking to a parliamentary committee, LCA president-elect Juliana Warner underscored the LCA’s view that “Australia needs to implement an AML/CTF regime” that prevents financial crime but “does not require Australian lawyers to report on their clients.”

LCA president Greg McIntyre SC supported this stance, asserting that while the LCA fully backs efforts to counter financial crime and fulfill Australia's commitments as a Financial Action Task Force (FATF) member, “we do not agree with rhetoric that Australia needs to implement an AML/CTF regime which requires Australian lawyers to report on their clients, or face being ‘grey-listed’ by the FATF.” Instead, McIntyre argued that “Australia can, and should, develop its own localised solution that mitigates AML/CTF risks” without forcing lawyers into compromising positions.

The LCA is concerned that the bill could jeopardize confidential client communications. McIntyre stated, “It is critical that a person seeking legal advice is able to have a frank and honest discussion with their lawyer... without fear that the lawyer will, or is required to, inform a prosecuting authority.” He noted the essential role of lawyers in ensuring the rule of law, stressing that clients need assurance their private concerns won’t be shared with authorities as part of a compliance process.

The LCA warns of increased regulatory burdens on lawyers, particularly for smaller firms, with potential cost impacts on access to legal assistance. McIntyre emphasized, “We believe the Australian model needs to strike a better balance between law enforcement and access to justice.” He called for a “more balanced approach” that respects the lawyer’s role in assisting clients within the law while preventing unwitting facilitation of financial crime, without sacrificing access to justice.

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