I have a message for democratic governments everywhere (please forgive the self-importance): stop interfering with legal professional privilege. I think that they used to, by and large, leave alone this cornerstone of the definition of the legal profession – and, of course, cornerstone of a citizen’s fundamental rights, which is more important. But, regrettably, one of the signs of modern government is that, after a major crisis, the response involves the invasion by governmental authorities of what I shall from now on call by its European name of professional secrecy.It happened after 9/11 with the sudden passage of the anti-money laundering legislation, which required lawyers to report on suspicious transactions – the consequences of which we are all living with today. There have been court cases, much protesting and hand-wringing, and it is still impossible for any governmental authority to put its hand on its heart and say that the reporting of suspicious transactions by lawyers has made any significant difference to the serious fight against money-laundering.

Now it is the turn of the response to the economic crisis. In the European institutions’ struggle to avoid a repeat of recent market failures, new authorities are being given sweeping powers, including sometimes the power to seize documents which are subject to professional secrecy. The last time this happened during the aftermath of the economic crisis, we at the CCBE lobbied, and – against a tide of political disinterest – managed to secure some modest amendments which seemed to give lawyers, in other words their clients, protection. Now it has happened again. The commission has recently announced an amendment to the EU rules on credit rating agencies (CRAs).

This is how the commission describes it: ‘As rating services are not linked to a particular territory and the ratings issued by a CRA can be used by financial institutions all around Europe, the commission is proposing a more centralised system for supervision of credit rating agencies at EU level. Heads of state and government had called the commission to come forward with proposals on this in June 2009. Under the proposed changes, the new European supervisory authority – the European Securities and Markets Authority (ESMA, see IP/09/1347) – would be entrusted with exclusive supervision powers over CRAs registered in the EU. This would include also the European subsidiaries of well-known CRAs such as Fitch, Moody's and Standard & Poor's.’

This ESMA’s proposed powers have no limitation in relation to professional secrecy, which means that clients – including CRAs – will not have the ordinary protections in their rights of defence that any citizen or other entity can expect. This is not acceptable, and no reasons are given for it. We are considering an amendment to say that: ‘When exercising its supervisory and investigatory powers, the European Securities and Market Authority should conduct its proceedings with full respect to the rights of defence of the persons and credit rating agencies which are subject to those proceedings and professional secrecy and legal professional privilege applicable in the home member state of such persons and credit rating agencies should not be affected.'

It is worth considering why it has become a recent phenomenon that governments go after professional secrecy like this. I think it is to do with the change in nature of our societies. It is a cliché to say that we have become information-based societies, and both terrorist financing and credit ratings depend on data, often quite a lot of data. Lawyers are gatekeepers (to use the American terminology) to that data – not only lawyers, of course, but lawyers are a common factor. We were joined with institutions like banks and casinos in money laundering, and with finance houses in credit ratings.

If I am right in my assessment, then this is a state of affairs to which we must become used. The nature of the world has shifted, and so when the next emergency occurs, it is likely that governments will believe that they again need data to prevent a recurrence, and will pounce on the gatekeepers to that data – undoubtedly lawyers once more – to hand it over, regardless of professional secrecy. We should therefore develop a long-term strategy to defend this fundamental right, since we serve a wider purpose than that of assisting governments, noble as that often is. We serve the public interest, which is broader.

My message is – governments, stay out of this area, it needs to be safe from your sticky hands.

Jonathan Goldsmith is the secretary general of the Council of Bars and Law Societies of Europe (CCBE), which represents over 700,000 European lawyers through its member bars and law societies

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