National Insurance Contributions Bill

I will speak to amendments Nos. 21 and 23, but leave my hon. Friend the Member for Christchurch (Mr. Chope) to address his amendment No. 22. Amendment No. 21 seeks to narrow the scope of what amounts to a notifiable contribution arrangement from the near catch-all definition on page 14 of the Bill to a more modest, but reasonable definition, so that only where the clear and main aim is avoidance would the arrangement be a notifiable contribution arrangement. I look forward to the Paymaster General telling us why the wide definition in the Bill should be employed rather than my more reasonable, narrower definition. I should declare an interest as a qualified solicitor and, until recently, a practising one. Although I am no longer practising, I remain on the roll of solicitors. Amendment No. 23 deals with the confidentiality rule and seeks to clarify its scope by making it clear that confidential advice does not need to be obtained from a UK qualified barrister or solicitor or, in Scotland, an advocate because it is important to make the provision wider than it is in the Bill. There are in essence two parallel issues. One is the duty of confidentiality that covers almost all professional practitioners and the other is professional privilege, which must be argued before a court of law. All solicitors who hold a practising certificate and operate in England and Wales are required to abide by the Law Society’s guide to the professional conduct of solicitors 1999. Rule 16 of that guide deals with a solicitor’s general duty of confidentiality to his client. Rule 16.01 states:"““A solicitor is under a duty to keep confidential to his or her firm the affairs of clients and to ensure that the staff do the same.””" There is a distinction between the duty to keep a client’s affairs confidential and the concept of law, which is referred to in the Bill, known as legal professional privilege. The duty in conduct extends to all matters communicated to a solicitor by the client or on behalf of the client, with some very narrow exceptions. Legal professional privilege, however, protects communications between a client and a solicitor from being disclosed even in a court of law. Certain communications are not protected by legal professional privilege, but non-privilege communications remain subject to the solicitor’s duty to keep his client’s affairs confidential. The disclosure of a client’s confidences that is unauthorised by the client or by law usually leads to disciplinary proceedings against the solicitor and could leave that solicitor or barrister—it is usually a solicitor because there is no contractual basis between a client and a barrister—liable, in certain circumstances, to civil court proceedings that arise from the misuse of confidential information. So the duty of confidentiality applies to information about a client’s affairs irrespective of the source of the information, and it continues despite the end of the retainer or, indeed, the client’s death, when that right passes to the deceased’s personal representatives. Solicitors must be very careful. Even when a solicitor sends a postcard to acknowledge the receipt of a communication, care must be taken to ensure that no confidential information appears on it. The Law Society rightly regards the duty of confidentiality as fundamental to the relationship of the solicitor and the client. It exists both as an obligation in law, having regard to the nature of the contract, and as a matter of professional conduct. All the information discovered by a solicitor in the course of his retainer is confidential. Whether the information is also subject to privilege is a separate legal issue, about which I shall go into detail in a moment. The circumstances in which confidentiality can be overridden are rare indeed. A solicitor who volunteers confidential information must be prepared to show powerful justification for breaching such confidentiality. Although it is clear that the solicitor owes that duty to the client, there are certain exceptional circumstances that override the duty. For example, a solicitor can reveal confidential information to the extent that he believes that it is necessary to prevent his client or a third party from committing a criminal act that the solicitor has reasonable grounds to believe is likely to result in serious bodily harm. The Law Society’s rule 16.02 sets out the circumstances in which the duty of confidentiality can be overridden. I shall not go into all of them, but the duty does not apply, for example, to information acquired by a solicitor, when the solicitor himself is being used by the client to facilitate the commission of a crime or fraud, because pursuing a crime or fraud is not within the scope of a professional retainer. If the solicitor becomes suspicious about a client’s activities, he can normally assess the situation in the light of what the client has to say about it and the solicitor’s own professional judgment and behave accordingly. Of course, in certain circumstances, the client himself may give express consent to the passing on of confidential information. In those circumstances, of course, the rule does not apply. Occasionally, a solicitor is asked by the police or a third party such as the Inland Revenue—so this is relevant to the Bill—to give information or to show documents that the solicitor has obtained when acting for a client. Unless the client is prepared to waive confidentiality or the solicitor has evidence that a crime is taking place, the Law Society advises lawyers to insist on receiving a summons, usually a witness summons, or a subpoena, so that when those circumstances arise the lawyer can claim privilege before the court and ask the court to decide the issue. The Inland Revenue asks solicitors to disclose documents and information on numerous occasions. In such circumstances, it is pretty clear that solicitors are protected. However, the Bill does not make it clear what will happen if a client employs someone who is a solicitor in France, Spain, or any of our EU partner countries, rather than a solicitor who is qualified under English law. The Law Society’s international unit is clear about the matter because it has published guidance that states that overseas lawyers who operate in England and Wales, or who have offices and provide legal services in England and Wales, are expected to observe the same standards as UK-based solicitors. The rules of conduct cover such an eventuality, but I am not sure whether the Bill does. Could the Inland Revenue argue that, because a person under investigation had employed an overseas lawyer, that lawyer should not have the right to claim privilege on behalf of his client? I hope that the Minister agrees that privilege and the right to claim it should remain in such circumstances. Accountants are under a professional duty in a similar way to solicitors. They have been issued with guidance informing them that they should not disclose information to third parties.