Mon | Jun 17, 2019

Lawyers win another round in POCA constitutional case

Published:Friday | July 8, 2016 | 12:00 AMMcPherse Thompson
Attorney Georgia Gibson-Henlin ... represented the Jamaica Bar Association.

The Court of Appeal has ordered the office of attorney general to hold off its challenge of a ruling that exempts lawyers from the Proceeds of Crime Act (POCA) while the Full Court deliberates on whether the law is unconstitutional.

It stems from a case originally filed by The Jamaican Bar Association (JBA) in October 2013 challenging requirements that attorneys be subject to POCA almost eight months before the June 1, 2014 date set for the provision to take effect.

It effectively required that lawyers set up procedures to police their clients for money-laundering activity or, as Supreme Court judge Brian Sykes described it, for an attorney to be a "covert operator for the State".

Based on the JBA challenge and application for an injunction against the attorney general and General Legal Council (GLC), Justice Sykes barred the Government in November 2014 from subjecting lawyers to POCA, pending the hearing of the constitutional motion.

The lawyers are arguing that treatment of attorneys as financial intermediaries is unconstitutional; and information required under the amendments breaches confidentiality, attorney-client privilege and legal professional privilege.

In an affidavit given by JBA member Donovan Jackson, filed in the Supreme Court in support of the claim, he said the GLC had the powers to inspect, examine, take copies, employ third parties, share information with POCA authorities, and issue directives with criminal sanctions, or administer disciplinary penalties for non-compliance.

He claimed that the new regime imposed a significant burden on attorneys, requiring the storing of information that they would not normally have kept, increasing staff, preparing manuals and training workers to complete the tasks and obligations demanded by the State.

Client categories

POCA also requires attorneys to place clients and services into high-risk or low-risk categories, necessitating enhanced due diligence procedures.

Jackson noted that under that regime, the GLC is required to conduct four different types of examinations by accountants, which imposed additional costs, expenses and personal prejudice on an attorney, infringed the client's liberty and had a general negative impact on the administration of justice.

He said POCA imposed an obligation on attorneys, once they believed that funds involved in a transaction could constitute money laundering, to obtain consent from the Financial Investigation Division in order to proceed.

Jackson also argued the collection of information, which was ultimately to be made available to law-enforcement agents for investigating and prosecuting their clients, breached the principle of confidentiality and attorney-client privilege, and raised serious issues concerning the independence of the Bar.

On the opposing side, the Bank of Jamaica weighed in on the attorney general's behalf, saying in an affidavit by the central bank's general counsel Robin Sykes that exclusion of lawyers could bring sanctions for Jamaica.

BOJ is the lead agency in coordinating and arranging valuations of other member countries of the Caribbean Financial Action Task Force (CFATF).

Sykes said Jamaica had been criticised for failing to extend anti-money laundering and combating financial terrorism obligations to designated non-financial businesses and professionals (DNFBPs), a grouping that includes lawyers.

He warned that failure to adhere to FATF could encourage other member countries to adopt countermeasures affecting financial institutions in Jamaica - as has been done in Guyana - making it difficult for their subsidiary branches to operate or engage in cross-border transactions.

Sykes was adamant that any restraint in the implementation of the POCA regime would represent a weakening in the anti-money laundering framework, and potentially result in Jamaica being considered "high risk" for money laundering.

However, Justice Sykes was un-persuaded by the arguments of the State and the central bank, siding instead with JBA's position that the POCA regime undermined the independence of the Bar and, consequently, the rule of law.

The judge himself emphasised that privilege was for the benefit of the Jamaican who sought legal advice and not for the benefit of the attorney.

Justice Sykes accepted the submissions of JBA's attorney Georgia Gibson-Henlin, QC, that the relevant provisions in POCA were unspecific, putting attorneys at the risk of criminal sanction if their claim for legal professional privilege did not find favour with the court.

That an attorney could be faced with conviction and subsequent expulsion from the profession on the basis of failure to comply with POCA was a serious matter, the judge said.

The attorney general filed an appeal against Sykes' order in December 2014, saying implementation of a law legitimately passed by Parliament cannot be barred by way of an injunction.

An alternative ground of appeal argued by Solicitor General Nicole Foster-Pusey, who appeared with attorney Tamara Dickens for the attorney general, was that Justice Sykes, in suspending the entire POCA regime, failed to utilise the least drastic means to protect the JBA while preserving the will of Parliament.

On May 2 of this year, JBA filed an application to bar the appeal until the Full Court passed judgment on the constitutional arguments, saying the matter had already had a hearing and a decision was pending.

The Court of Appeal granted the JBA's request on July 1.

Appellate judge Justice Hilary Phillips noted that the question of law to be determined in the appeal directly impacts the Crown, and the right and power to grant an injunction staying the operation of legislation which had already been passed by Parliament.

She said the solicitor general asserted that the attorney general had a reasonable prospect of success on appeal and, in any event, the reasons and decision of the court in respect of the appeal will "provide significant guidance and serve to build jurisprudence of Jamaica on an issue for which there is no direct legal authority from our courts".

Nicole-Pusey, in underscoring the merit of the appeal, said "the question of the right and power, of the courts to grant an injunction staying the operation of legislation passed by Parliament, and the ambit of that power, is a novel and important point which demands judicial pronouncements from the highest sitting court in the land".

Justice Phillips set September 30, 2016 for reconsideration of whether to hear the attorney general's appeal.