P v P

Legal advisers may take instructions in family proceedings despite concerns that an arrangement may involve criminal property. Where they know or suspect that they or their client may become concerned in such an arrangement, they must make an authorised disclosure and obtain the consent required by the Proceeds of Crime Act 2002.

After disclosure, the statutory notice and moratorium periods govern whether work on the arrangement may continue. The tipping-off and investigation provisions do not generally prevent legal advisers from informing clients or opponents where the disclosure is connected with legal advice or proceedings. That protection is lost where the disclosure is made with the intention of furthering a criminal purpose. The court also gave practical guidance on repeated disclosures and applications for directions.

The wife’s legal advisers suspected that some matrimonial assets might be criminal property. They made an authorised disclosure to the National Criminal Intelligence Service under the Proceeds of Crime Act 2002 and sought consent to continue acting in ancillary relief proceedings.

Conflicting advice from NCIS left the advisers uncertain whether they could continue negotiating, disclose the report to the parties, or comply with their professional duties of openness and full and frank disclosure. The court considered the operation of sections 328, 335, 333 and 342, and the interaction between those provisions and family-law duties.

1. Section 328. A solicitor or barrister does not commit an offence merely by taking instructions. However, if the adviser knows or suspects that the adviser or client may become involved in an arrangement facilitating the acquisition, retention, use or control of criminal property, an authorised disclosure should be made and appropriate consent sought. Negotiating an arrangement may amount to becoming concerned in it.
2. Consent procedure. Under section 335, the adviser must not take further steps until consent is received, deemed consent arises after seven working days, or a refusal is followed by expiry of the 31-day moratorium. The maximum period of restraint is therefore 31 days plus seven working days. Repeated disclosure is unnecessary on unchanged facts unless a new or varied arrangement is proposed.
3. Legal professional exemptions. Sections 333 and 342 protect disclosures made by legal advisers to clients or others in connection with legal advice or actual or contemplated proceedings. The exemption is lost where the adviser makes the disclosure with the intention of furthering a criminal purpose. The intention is that of the adviser making the disclosure; the reasoning in R v Central Criminal Court, ex parte Francis & Francis [1989] AC 346, concerning privilege in documents held for a criminal purpose, was not transferable to this context.
4. Family proceedings. Duties of professional openness and the enhanced duty of full and frank disclosure in financial proceedings generally attract the statutory protection. Advisers may therefore disclose the existence or content of an NCIS report where necessary and appropriate for legal advice or proceedings, although no blanket guarantee is available.
5. Practice and outcome. Advisers should normally allow investigating authorities up to seven working days before informing a client, where that is practicable. During a moratorium, the parties should seek agreement on safe disclosure; otherwise the adviser may apply privately and without notice for directions, with NCIS as respondent. The wife’s advisers were right to report, could continue after deemed consent, and could inform both parties. Declarations were granted and the earlier restriction on informing the husband was set aside.

First-instance decision in the High Court (Family Division). No appeal history is stated in the judgment.