Let us have a party about two pieces of good news. There is not a lot of that around at present, for the legal profession or anyone else. And then we will give a loud boo to the bad news.

The first item of good news arises out of a leaked draft of the European Commission’s future policy on auditors. It is set to be presented in late November, and will be an amendment to directive 2006/43/EC on statutory audits. I have written about the issue before, and it seems that much of what was expected will happen. For instance, large companies - the ten largest public interest entities in each country, whose stock market capitalisation or assets total €1bn - will be forced to undergo a joint audit by two auditors, with at least one from outside the big four (and this second firm should have a market share of less than 15%).

An audit firm will be prohibited from working for the same company for more than nine years i.e. ‘mandatory rotation'. But the most interesting part for lawyers is that we are told a list will be published of services that are incompatible with audits - and included among the forbidden for auditors will be legal consulting. I know that the old idea of an MDP with one of the big four has been more or less dead since Enron and Arthur Andersen (geeks should look at section 201(g)(8) of the US Sarbanes Oxley Act), but this seems to put the final nail in the coffin so far as such activities are concerned in the EU.

The second good news is a judgment handed down a few days ago by the British Columbia Supreme Court, which the parties agreed in advance would be binding across Canada. It arose out of Canadian money laundering legislation. The brief history is that the Canadian legal profession has already implemented rules requiring legal professionals to identify their clients, and to not accept large amounts of cash from clients except in certain circumstances.

This was brought in by the Canadian professional bodies specifically in order to avoid their members being subject to the money laundering laws. The court has now made clear that all legal professionals are indeed exempt from the legislation. It also stated that the application of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the related regulations to the legal profession violates section 7 of the Canadian Charter of Rights and Freedoms, and is therefore unconstitutional.

This is because the federal legislation jeopardises the liberty of clients: lawyers would be required to collect information from their clients to establish a paper trail for law enforcement agencies to access, and this is contrary to the expectations of confidentiality Canadians have when they communicate with legal professionals. It is good to see the involability of the confidentiality principle being respected in this way by a court. It continues to be the case, very surprisingly, that north American lawyers are not subject to reporting duties, whereas European lawyers are. Will our own courts and legislators follow suit one day?

Finally, the bad news. The Gazette has covered the proposed Irish legislation for the regulation of the legal profession. Who thought that, so soon after the Legal Services Act 2007, one would be able to look back at that statute as a model of gentle, steady-as-she-goes legislation? I have written elsewhere in the Gazette about the changes proposed for the Dutch legal profession, with a government board able to breathe down the neck of the bar, give directions and sack presidents.

Now the Irish, it seems, are proposing to go one step further and have the legal profession regulated directly by government appointees, sidestepping the Law Society and Bar altogether. Although the bill has not been published at the time of writing, it seems that these government appointees, with a 7-4 majority of non-lawyers, will not be an oversight board as in England and Wales, but become direct front-line regulators.

Is not Sir David Clementi responsible for this sudden fall down a slippery slope? He was warned at the time that others would take his ideas and make them worse. In that sense, the Legal Services Act 2007 broke a mould which no-one had dared to break before in Europe. It seems that the independence of the legal profession continues to count for nothing in a landscape which is still governed by market forces and consumerism, despite the ruin that those forces have brought to our societies.

Two steps forward, one step back. We should celebrate the good news at any rate.

Jonathan Goldsmith is secretary general of the Council of Bars and Law Societies of Europe, which represents about one million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs