ADACS/DGAJ (2000) 24

Activites for the development and consolidation of democratic stability

ETHICS OF LAWYERS

Prague, 3 - 5 November 1999

Multilateral meeting organised by the Council of Europe
in collaboration with the Czech Bar Association
Activites for the development and consolidation of democratic stability

ETHICS OF LAWYERS

Multilateral meeting organised by the Council of Europe

in collaboration with the Czech Bar Association

Prague, 3-5 November/novembr e 1999

Contents

Opening Speech
Natalie WAWRZYNIAK , Council of Europe ............................................... 5

The function of a lawyer - legal and moral duties to clients

Mr Jirí NYKODÝM, lawyer, Prague, Czech Republic ................................. 9

Nothing but trust

Mr Tony HUYDECOPER, Lawyer, President of the PECO Committee
CCBE, Den Haag, The Netherlands ............................... ............................... . 15

Establishment of foreign law firms in Hungary

Partnerships and co-operation between Hungarian and foreign lawyers
Dr Károly STEFANI, Lawyer, Budapest, Hungary...................................... 21

Multidisciplinary partnerships
Ms Petra HEINICKE, Rechtsanwältin München ........................................ 27

Publicity and advertising of legal services and their forms

Mr Stanislav BALÍK, Lawyer, Czech Republic ............................... ................ . 33

The Publicity: publicity of legal services and its different forms

Ramón MULLERAT, Abogado-Avocat à la Cour de Paris
Former President of the Council of the Bars and Law Societies of
the European Community (CCBE), Spain
and Jorge ADELL, Abogado, LLM, Spain.................................................. 39

The publicity of legal services and its different forms

Mr Stephen RAYNER, Solicitor, Rayner De Wolfe, London, England ........ 53

The client´s funds

Mr Ladislav KRYM, Lawyer, Czech Republic ............................... .................. . 63

The client’s funds

Mr le Bâtonnier Alain DE LA BRETESCHE, Lawyer, Laval, France ........... 71

Practice as a lawyer and the principles of the European Convention

on Human Rights
the problem of money laundering and confidentialit y of this profession
the problem arising from organised crime and the ethics of this profession
Mr Marian ANCZYK, Vice-President of the Polish Bar Association
Warsaw, Poland ....................................................................................... 79

Mr. John FISH, Chairman of CCBE Task Force on Money Laundering

Dublin, Ireland .......................................................................................... 87

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General Report by:
Mr. Milan KOSTOHRYZ, Lawyer, Representative of the
Czech Bar Association to the European Bars’Federation ......................... 99

Conclusions.............................................................................................. 113

Programme .............................................................................................. 119

List of participants .................................................................................... 123

4
Opening Speech
Natalie WAWRZYNIAK, Council of Europe

Mr Cermak, ladies and gentlemen,

It is a great pleasure to be with you at this meeting on the

ethics of lawyers, which the Council of Europe has organised in the
context of the ADACS programmes, and which the Czech Bar has been so
kind as to host as
a follow-up to the meeting held in Budapest in 1997 on the role
and responsibilities of the lawyer in a society in transition. What is new about
this meeting is that the Bars in all the Council of Europe member and
applicant countries have been invited to attend.

The Budapest meeting provided an opportunity to hear the views

of lawyers who are specialists in their respective fields and who all ensure that
the legal profession plays a role in training members of the profession,
which is unrivalled in providing an overwhelmingly important service,
ensuring that justice prevails and safeguarding human rights.

Independence and respect for ethical principles are the hallmark of the
legal profession. At our last meeting we noted that one ministry of
justice supervised certain Bar activities. It was reasserted in the conclusions
of the meeting that the state should merely provide the framework
for the establishment of an independent Bar and leave the Bar to do the rest.

Barristers, like doctors, architects and surveyors, form a

profession. They are not under the authority of an employer; nor are
they civil servants under the authority of a government. They exercise their
profession freely and independently. This
independence is the key feature of the profession. Without it, one may
be a legal expert but not a barrister. Hence the
establishment of the Bars of which you are members.

Confidentiality and professional secrecy are a tricky problem, for

although it is universally accepted that all lawyers must refrain from revealing
details of their clients' cases, the rules vary when it comes to exceptions or to
deciding to what extent lawyers may refuse, on grounds of professional
secrecy, to provide documents which they consider confidential or to appear as
witnesses and make statements that they consider might entail a breach
of confidentiality.

I am well aware that if there is one value that is upheld and

must continue to be so, it is professional secrecy. Barristers exist by virtue
of the interests which clients entrust to them, and in order to defend those
interests. They may do so only if they have a full knowledge of the
facts, which presupposes total confidence. I can understand that your
profession is concerned about new legislation, particularly that
concerning money laundering. Your concern does not stem from
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an over-cautious or old- fashioned desire to retain a privilege. The key
issue of this debate and the

6
main subject of your concern go beyond the exercise of your profession and
are related to the status of the citizen in a state governed by the rule of law.
Moreover, the Court of Justice of the European Communities said as much in
1982, stating that in a highly developed democracy, professional secrecy was
considered as a value that needed to be safeguarded.

Another problem we discussed was advertising. An absolute ban

would be contrary to Article 10 of the European Convention on Human Rights,
but Bars must nevertheless ensure that advertising contains nothing dishonest
or misleading and nothing that might bring the profession into disrepute.
Legislation is changing very fast in this field, and we shall have
occasion to discuss the matter again this week.

In the context of its intergovernmental activities, the Committee

of Ministers of the Council of Europe has adopted a number of resolutions
and recommendations concerning matters relating to the administration of
justice, including the role of the lawyer and the legal profession:

- Resolution (76) 5 on legal aid in civil, commercial and

administrative matters;

- Resolution (78) 8 on legal aid and advice;

- Recommendation R (81) 7 on measures facilitating access to justice;

- Recommendation R (86) 12 concerning measures to prevent and

reduce the excessive workload in the courts;

- Recommendation R (94) 12 on the independence, efficiency and role

of judges.

Many countries are considering the issues of legal aid and access to
the courts and are trying to find funds to provide services to destitute people
while seeking to simplify procedures, or are turning to other means of resolving
disputes, such as mediation, conciliation or arbitration. Two meetings are to be
held on these subjects, one in Strasbourg in late November and the other in
Vienna in mid-December. There should be no obstacle to access to the courts
in any legal system. Equal access to the courts for all is essential if a state is
to be governed by the rule of law. It is not just a question of financial
resources: steps must be taken to ensure that the public know how to obtain
access to legal services and to whom they should apply. The obligation
to provide such services and ensure that they are of high quality rests mainly
with the legal profession, by virtue of its independence, and governments must
help lawyers to shoulder this responsibility. We shall have occasion to discuss
this today.

Since our last meeting, the Council of Europe has decided to draw up a
similar recommendation concerning barristers, which takes account of all
the existing instruments and of the case-law of the European Court of
Human Rights. The European Court has handed down many judgments in
cases directly concerning lawyers and relating in particular to effective
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assistance

8
from a lawyer in the case of proceedings held in absentia, the confidentiality of
communication with a lawyer and the appointment of a lawyer when the
interests of justice so require.

This new draft recommendation, on which the Bars in your countries

and the Council of the Bars of the European Community have been
invited, through the ministries of justice, to express their views, should be
completed in the year 2000.

The recommendation will concern the freedom of exercise of the

profession of barrister, legal training, initial training and access to
the profession, the role and duties of barristers and their
associations and disciplinary measures. Given the need for
harmonisation within your profession, it seemed that barristers needed
clear guidelines concerning the professional standards in force in the
various countries, since an important feature of the legal system of any
democratic society is the right to the assistance of counsel.

Before I finish, I should like to introduce the Council of Europe experts,

some of whom attended the Budapest meeting:

- Mr Jorge Adell, Barrister, Barcelona, Spain;

- Mr Marian Ancyzk, Vice-Chair of the Polish Bar;
- Mr Alain de la Bretesche, Chair of the Bar, Laval, France;
- Mr John Fish, Representative of the Council of the Bars of the
European Community, Dublin, Ireland;
- Ms Petra Heinicke, Barrister, Munich, Germany;
- Mr Tony Huydecoper, Chair of the committee on which the central and
east European countries and the Council of the Bars of the European
Community are represented; senior member of the Bar Association of
the Netherlands;
- Mr Stephen Rayner, Solicitor, London, United Kingdom;
- Mr Károly Stefáni, Barrister, Budapest, Hungary, who co-organised the
previous meeting, in Budapest.

As the participants pointed out in Budapest, discussions at such

meetings are valuable as they allow each of you to find out the
situation in other countries, and as they give rise to a real feeling of
consensus and commitment to the ideals of your profession. All the subjects
we are going to tackle this week are of prime importance to the integration
process. The wind
of change is blowing over the whole of Europe, and I have every confidence
that your profession will be able to rise to the challenges of the third
millennium. I am pleased that the Icelandic Bar has already agreed to host the
follow-up meeting to this meeting next year, in the context of our
ADACS programmes. At next year's meeting it is planned to discuss the
exercise of your profession in the third millennium. On Friday, our
general rapporteur, Mr Kostohryz, will sum up the proceedings and the
conclusions you reach at the close of the meeting.

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10
The function of a lawyer - legal and moral duties to clients
Mr Jirí NYKODÝM, lawyer, Prague, Czech Republic

The legal and moral duties of a lawyer to his clients are undoubtedly a
great subject for discussion of lawyers. This is a fundamental problem of the
legal profession because it involves the most important issue. Everything
concerning the profession of a lawyer begins to evolve from the relation
between the client and lawyer. Nothing in people’s lives is an end in itself.
A lawyer is not here because he wants to be but because legal services
are required. This need is represented by clients, i.e. those who, for many
reasons, have found themselves in a situation when they require legal
services. These are required throughout society from the highest social levels
to the homeless and people on the verge of society.

The ethics of the performance of the legal profession mean that every
lawyer’s fundamental obligation is not to reject a client because of
his momentary position. Everyone is entitled to legal services wherever
their situation in life requires it. The lawyer and the client are people. It
means that we are not perfect, our daily actions do not always comply
with the highest moral principles. If we want the performance of the legal
profession to achieve an appropriate ethical level, we cannot rely on
professional ethics alone.

The relation between the client and the lawyer must therefore be
regulated by law, i.e. by generally binding and enforceable rules. In our rule of
law this is related above all to the Legal Profession Act which regulates these
relations. According to Section 16 of the Legal Profession Act, the
lawyer is obliged to protect and enforce the justified interests of his client
and to follow his instructions. However, he is not bound by these instructions
should they be
in conflict with the Act or professional regulations. The Act then defines
and specifies in follow-up provisions the contents of this basic provision
which stipulates the legal framework of lawyer-client relations. However, it is
not the objective of this speech to deliver detailed overview of the valid legal
treatment
of these issues, and therefore I will restrict myself to the aforementioned
statements.

The Czech legal profession worked its way to the acceptance in 1996
of the rules of professional ethics and lawyer competition rules. This concerns
one of the most important professional regulations resulting from many years´
of discussion on this subject which, if I am not mistaken, began even prior to
the "Velvet Revolution" in 1989. The main purpose of these rules is to regulate
the conduct of the lawyer to the client in the interest of the client as
the consumer of legal services. The legitimate obligation of the lawyer to
protect and enforce the justified interests of the client is developed in these
rules in the interest of the client in such a way that his justified interests have
precedence over the personal interests of the lawyer and over those of
other lawyers. These basic principles are then developed in detail in the rules
11
of ethics.

12
 Without having delivered a detailed interpretation of the legal treatment
of the client-lawyer relation, I may end by saying that in this respect the Czech
rule of law corresponds to the European standard and that we do not differ in
this respect from the other European legal cultures. However, what is causing
us problems and what will evidently cause us even greater problems in the
nearest future, in view of the forthcoming changes in judicial regulations, is
access to legal service.

According to Article 37 (2) of the Charter of Fundamental Rights and

Freedoms, everyone is entitled to legal aid in proceedings before a court of law
or other state authorities or public administrative authorities right from the start
of proceedings. Accessibility to legal service is thus the basic right which is laid
down by the constitutional order of the Czech Republic. Accessibility is not only
a question of the supply of these services but also of their cost. While
the supply of legal services is extensive in the Czech Republic and
totally comparable with the countries of the European Union, the
question of accessibility for those who are poor or for those people on a low
income is only dealt with marginally. A better understanding of why the
state of the legal treatment of these problems is such lies in the recent past.

Under the Czech rule of law the terms and conditions of

free representation were regulated up to 30.6.1990 when the legal profession
was privatised by generally binding regulations which regulated the position of
the legal profession. This concerned both the Legal Profession Act and the
valid legal profession tariff. Above all it was the legal profession tariff
issued by Minister of Justice Decree No. 50/65 Coll. which regulated these
problems. Under Section 9 (1) the Decree contained a provision stating that
legal aid is provided for a reduced remuneration or free of charge should this
be justified by the personal and property circumstances of the citizen or should
there be other appropriate reasons of particular consideration. The head of
the legal advice centre decided on whether or not legal aid should be
provided for a
reduced remuneration or free of charge.

Up to 30.6.1990 the legal profession in fact held the position of a state

legal profession, even though it did formally preserve certain attributes of
independence. In such a system free representation could be ensured through
the legal profession on which it was directly imposed that it should undertake
this obligation, and that via the redistribution system directly within the
framework of the entire legal profession financial resources were created
to cover the costs of free representation or representation at reduced cost.

Therefore what happened in practice was that the client who

fulfilled the conditions for representation free of charge or at a
reduced cost documented these conditions to the lawyer and he then
requested the head of the legal advice centre for representation at reduced
cost or free of charge on behalf of the client.

The lawyer was interested in the economic results of his activities only
to a limited extent and therefore had no serious reason for refusing free
representation. So although the state did not contribute any extra funds to the
13
activities of the legal profession and did not cover the costs of
free

14
representation within the semi-state legal profession from its budget, free
representation, as a whole, could function relatively without any problem.

In the area of civil proceedings, most cases of free representation

resulted on the basis of proceedings held between the client and lawyer even if
the client approached the lawyer only because he required free representation.
Cases when a court appointed a representative in civil proceedings were
exceptional. The procedure was that the court, under the conditions regulated
by Section 30 (2) of the Code of Civil Court Procedure, i.e. if the court felt it
necessary to appoint a lawyer for the participant of the proceedings, informed
the head of the legal advice centre who appointed a representative as well as
deciding whether or not representation would be provided free of charge.

The privatisation of the legal profession brought distinct changes

because it was not possible to adopt the hitherto system of financing
free representation. The new legal profession tariff which was valid from
1.7.1990 to
30.6.1996 stipulated that the lawyer may provide free legal aid only if
this concerned simple informativ e consultations or with the consent of the
Czech Bar Association’s Board of Directors. The lawyer could
reduce the remuneration by as much as half the amount if he decided to do so
himself.

Simultaneously with the new Legal Profession Act, the provision of

Section 30 (2) of the Code of Civil Court Procedure was amended inasmuch as
if the protection of the interests of the participant so requires, the
presiding judge will appoint a representative for the participant of court
proceedings from the ranks of lawyers. According to Section 23 of the current
Legal Profession Act, if a lawyer is appointed, the state covers the costs of
remuneration. The procedure according to Section 30 (2) of the Code of
Civil Court Procedure only comes into consideration when the participant is
entitled to be freed from payment of court fees. This means that if the state
appoints a lawyer to act as representative, it cannot demand the costs of
this appointed lawyer from the participant because if conditions exist for
exemption from court fees, then conditions must exist for free
representation. Ignorance of such practice states that the state could demand
reimbursement of costs of the appointed lawyer from the participant if it
were to discover, during court proceedings, that the participant does not
fulfil the conditions for exemption from payment of court fees, however it
would be necessary from the logic of this provision to deduce that the
participant is entitled to reimbursement of costs for legal
representation.

This provision of the Code of Civil Court Procedure therefore stipulates

conditions under which the participant is to be represented in civil proceedings
by a lawyer and the costs of such representation be reimbursed by the state.
Cases when a court appoints a representative in civil proceedings, under the
aforementioned conditions, are exceptional.

Free representation in civil proceedings is also possible when the Bar

Association so decides. Under Section 10 (2) of the current Legal Profession
15
Act, it may appoint a lawyer for any person who approaches him for
help bringing proof that he has not managed to acquire legal services.
Except in those cases stated by law, such an appointed lawyer is
obliged to provide a

16
legal service under the conditions determined by the Bar Association. In such a
case it may decide that the lawyer must do so free of charge. In practice this
means that at least minimum cash expenses must be covered either by
the client or the Bar Association.

It is evident from the above that free representation in civil proceedings

under our rule of law is not regulated adequately. This inadequate regulation is
the result of historical development which I tried to touch upon here in brief. I
must add that the need for free representation in civil proceedings was
distinctly lower than in criminal proceedings with regard to the nature of
the proceedings which was, and still is, based above all on the
principle of investigation and is still based on material truth.

As far as criminal proceedings are concerned, the issue dealt with here
was that of free representation up to privatisation of the legal profession in the
same way as for civil proceedings. Defence was paid even in cases of
obligatory defence. If the client did not possess the means to pay for
his defence, and there was no realistic hope that defence costs could be
exacted from the client, for example during his time in prison, the lawyer filed a
proposal with the head of the legal advance centre for the provision of free
defence. It was then up to the head of the advice centre to either
comply with such a proposal, or partly comply or not comply with it at all.
Such a decision was not subject to any review. If free defence was provided
or at reduced cost, such incurred costs were debited to the legal profession.
The state did not contribute
to these costs in any way.

The privatisation of the legal profession has meant that the question of
free representation is dealt with by the Code of Criminal Procedure and
the Legal Profession Act. There where the lawyer is appointed, the costs
of defence are covered for the lawyer by the state. This of course does not
mean free representation - on the contrary the state is entitled, in such
cases, to demand paid reimbursement of defence costs from the client
through the appointed lawyer. The provision of Section 33 (2) of the
Code of Criminal Procedure states, among the basic rights of the accused,
that the accused who does not possess sufficient means to cover his defence
costs, is entitled to free defence or defence at reduced remuneration.
However, this provision is not explained in greater detail as far as individual
cases are concerned. In practice doubts arise about its interpretation
documented by court case law which, in spite of the fact that this legal
norm has already lasted for nine years, is still highly awkward and
incomplete. The work of authorities active in criminal proceedings usually
ends with the appointing the defence lawyer where defence is
necessary by law, or where there are other reasons for the appointment
of a defence lawyer. The provision does not deal further with the fact of
whether the person to whom a lawyer is appointed is able to cover
defence costs. On the other hand the state is then often unsuccessful in
exacting reimbursement for defence costs and therefore defence becomes
practically free of charge even in cases where the relevant decision for
free defence has not been issued. Such a situation cannot, of course, be
accepted
17
as being legally relevant, but, on the contrary, it just proves that
the amendment of the present law is incomplete and, as a result, it cannot
function properly.

18
 Today we are faced with a fundamental change in civil and criminal
proceedings. The already initialled versions of the amendments to both
procedural regulations which fundamentally change the hitherto
proceedings have been drawn up. As far as the Code of Civil Court Procedure
is concerned, this means the full enforcement of the principles of formal
truth and the consistent implementation of negotiation principles and the
implementation of the principles of proceedings concentration. The
combination of all these principles leads to the introduction of the so-called
lawyer proceedings whereby qualified representation should be the
essential prerequisite for duly implemented claims. Of course, the draft
amendment does not take this into account apparently due to lack of
financial means for covering free representation. On the contrary, the
amendment of the Code of Criminal Procedure aims to reduce the costs
for necessary defence by simplifying in particular preparatory proceedings.

The Czech Bar Association is endeavouring to supplement the rule of

law by a legal modification concerning free representation. Our objective is to
make sure that rules are set by which the citizen can ask for
legal representation even if he has no financial means from which he can pay
for this service. In the first place this means that the definition of so-
called "lack of means" should be laid down in the rule of law as the basic
condition for the provision of free legal representation, or representation at
reduced cost. Any citizen in such a position must then be entitled by law to
free legal services or
at reduced cost. Our proposal is derived from the fact that the court
should decide on free legal aid and simultaneously appoint a lawyer who will
provide legal aid. It is essential that the strictest criteria be set for assessment
of lack of means so that these benefits cannot be abused. Henceforth, the
reason for refusing free representation should not only be no proof of lack of
means, but also the implementation of evidently undocumented, unjustified or
harassment claims or simple proceedings in which provision of legal aid is not
usual.

The legal requirements must also take into consideration cases when
reasons for providing free legal aid subsequently lapsed. In such a case
the court will make a decision even without a proposal on the extinction of free
aid. This must be possible in every case during the course of proceedings,
but it must also take account of the fact that the decision on free
representation may be cancelled even during a certain period, e.g. three years
after termination of proceedings should such changes subsequently
occur in the property circumstances of the citizen in question which
would not justify his claim to provision of free legal aid.

The citizen who is provided with legal representation should

be automatically exempted in civil proceedings from payment of court fees
and expenses. The lawyer who is appointed to provide free representation
should be entitled to the claim for remuneration and reimbursement of costs
to the extent stipulated by the law. These claims should be satisfied by the
state either directly or through the Bar Association annually from the state
budget in
19
the form of means for reimbursement of such costs.

20
 In conclusion it must be stated that we are currently faced with the
problem of solving the "rights of the poor". This is a problem which will not be
easy to solve under our conditions, above all due to lack of state
budgetary funds. However, we must solve this problem and the contribution of
the Czech Bar Association towards solving this problem must be
substantial. The state must comprehend that this is not a question of money
for lawyers and lawyers must comprehend that it is not state money for
lawyers. Above all, this concerns the basic moral obligation to those who
need aid but have no money
to acquire it.

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Nothing but trust
Mr Tony HUYDECOPER, Lawyer, President of the PECO Committee – CCBE,
Den Haag, The Netherlands

When a client decides to see a lawyer, that is no trivial decision. Clients rarely
approach lawyers lightly. Going to see a lawyer is, with few exceptions,
perceived as a momentous step. That is true for the private citizen, but it is not
principally different for the businessman, the corporate or
government functionary, or even a corporate lawyer. These also do not
consult lawyers lightly or on frivolous matters. The threshold for
consulting a lawyer is substantial and not readily crossed costs being
only one of the inhibiting factors.

Everyone is confronted with legal problems regularly; but only a small minority
of those problems ever reach a lawyer (and a smaller minority again ever reach
a court). The majority of legal problems is relatively simple, or not very
consequential, or both. People solve those problems – or decide to leave them
unsolved – by their own efforts, or with the help of a colleague, a friend of a
relative – but not a lawyer.

The problems selected to pass on to a lawyer are those that are not simple and
not inconsequential, sothat the client decides that he must have a solution and
that professional assistance will be necessary to obtain that. A client who
consults a lawyer therefore often believes that he has a serious and relevant
problem. More often than not, he is right: he does have a problem that really
needs the attention of a qualified professional. Sometimes – fortunately
not always – he has a very serious problem indeed, requiring all the skill
and dedication a good lawyer can muster.

This is the normal context of legal consultation: a client with a substantial and
not simple problem, which that client finds sufficiently vexing to propel him to
seeking professional help; and which in all likelihood indeed does require
qualified and dedicated professional attention. This is the context in which the
ethical rules governing the relationship between lawyer and client must
be placed.

Those rules should determine the lawyers conduct in all cases, but particularly
in “borderline” cases. Rules are generally best not tested in simple, middle-
of- the-road situations, but in situations where the maximum extent of the
rule is brought into question. Those are the situations which allow one to
measure the purpose and necessity of a rule, and its effect when strong
countervailing argument makes itself felt.

By way of example, the rules governing the relationship between lawyers and
clients could be tested against the case of an accused of a particularly
shocking crime, which has attracted widespread publicity, has caused waves of
public revulsion, and even political pressure. It is to be noted, meanwhile, that
highly unpopular causes in civil or administrative cases can give rise to
the
22
same kinds of pressure, and in practice not infrequently do – but a highly
unpopular criminal defendant provides very adequate test material.

In cases, such as these, two aspects important to the lawyer/client relationship

are clearly visible:

Firstly, a client in this kind of case is dependent upon his lawyer to an

exceptional degree. It happens in such cases that the lawyer is the only person
to whom the client can turn for any form of support or assistance in his legal
predicament, all other sources of support which society can provide being
unavailable or even actively hostile: the lawyer as the client’s last resort.

Secondly, in cases such as those considered here, the chance of the lawyer
being subjected to external pressure is also exceptionally high. Public opinion,
political and/or administrative influence – even the feelings of people in
the lawyer’s own inner circle may combine to affect that lawyer’s
attitude and determination, and ultimately his policy and actions in the defence
of the cause
in question.

These factors are likely to occur whenever a lawyer is called to defend

an impopular cause. As the unpopularity of the case becomes more
prominent and the weight of public and/or political interest increases,
those factors become more readily visible.

These are therefore appropriate circumstances within which we may consider

the lawyers duty as against his client, and the nature of the lawyer/client
relationship generally. In these circumstances it can best be seen what
that relationship requires of the lawyer, and what vulnerable or equivocal
aspects need to be taken into account.

The requirement that immediately throws itself forward as obvious and

essential, can be summarized in the word: trust. A client must always be able
to trust his lawyer without question or compromise; and that becomes tangibly
visible in situations such as those considered above. Where a lawyer is the last
resort of a client facing the direst difficulties, the unacceptability of a
lawyer betraying his client’s trust becomes manifestly obvious. Of course
betraying one client’s trust is thoroughly reprehensible in all
circumstances; but the context of a “borderline”case brings that out more
clearly.

What is this trust that a client needs to be able to place in his lawyer? The first
and most important part of that trust, consists in the certainty that the lawyer
will have only the interests of his client in mind, and will let his policy and his
actions be guided by those interests only. (Of course, a client may expect the
lawyer only to represent his legitimate interests; and not to further illegitimate
interests or to ressort to illegitimate means. But save for that –
necessary – qualification; the trust a client may place in his lawyer is absolute.)

This requirement seems obvious to the point of being elementary: but it entails
a number of consequences which are not readily perceived, and
23
often misunderstood.

24
 An important one of these consequences is lawyer independence. We insist
that lawyers must be independent for a number of reasons; but the principal
reason in that number is, that the lawyer must be free to serve his client without
being susceptible to the influence of other interests, or to loyalties or
duties which he must observe vis-à-vis others. This is the crucial point
lying at the heart of the independence requirement. Because of this point
it is so very necessary that lawyer independence be maintained and defended
(all the more so as the importance of this concept is only infrequently
appreciated by non- lawyers).

The primary requirement of trust which a client must be able to place in

his lawyer, and the requirement of independence which derives therefrom,
also have consequences for the subjects addressed in other sessions of
this conference. For example, it will be examined how lawyers play a role
in the administration of justice, in the functioning of the legal system and in
the maintenance of access to legal service and to the law itself, for all sectors
of the public. All of those tasks or roles place certain obligations on lawyers; but
all those obligations are subordinate to the duty of loyal dedication to the cause
of each individual client. A lawyer may never allow himself to do anything that
does not coincide with his clients legitimate interest, for instance because doing
what he should do may disturb or displease the court, or may jeopardize
political or administrative interests, or may cause public outcry, or even
may call into question the standing or reputation of the legal profession. Note
that this is not a theoretical exercise. In the working example chosen earlier,
i.e. the defence of a highly unpopular criminal defendant, all these effects
can occur and in practice do occur (and the same, though not always to a
similar degree,
is true for unpopular civil or administrative causes). It is at this juncture that the
rules on the lawyers one-sided partisanship on behalf of his clients cause and
interests will come under pressure – and it is then that it is most necessary that
those rules are understood and respected.

Lawyers defending unpopular causes, such as criminal defendants accused of

unusually unpleasant crimes, seldom receive public acclaim and they do often
meet public censure or worse forms of pressure and antagonism. At the very
least the Bars and their well-received representatives should use appropriate
opportunities to express support and admiration for such lawyers, if they refuse
to be deterred and go on doing what they should do: defend, to the best of their
ability, their clients legitimate interests.

Another obvious, but nevertheless controversial consequence of the essential

requirement of client-lawyer trust, is the principle of client confidentiality.

It is glaringly obvious that the client in serious trouble, and requiring qualified
and dedicated professional assistance, also needs the protection of
confidentiality. In fact betraying, whether voluntarily or under coercion, what a
client has revealed to his lawyer in confidence, will readily appeal to
almost anyone as a prime example, and a very objectionable example, of
betrayal of the client’s basic requirement of trust. Serving, and serving
loyally only the clients legitimate interests is totally irreconcilable with any
duty or any freedom
25
to reveal any client confidence except where that serves to further the clients
interests – and certainly not where it might damage those interests. And here

26
 there is no room for distinguishing between legitimate and other interests: if a
client cannot trust his lawyer to maintain confidentiality, trust is
irredeemably impaired.

There is an irrefutable logic in this simple syllogism. And once again the rule
becomes more obvious, and the need for confidentiality more pressing as the
clients problems increase, and the matters he needs to consult his
lawyer about are more burdensome and (possibly) self-incriminating. Highly
sensitive
or even incriminating information highlights the necessity of confidentiality, and
the more delicate and sensitive a case is, the greater the imperative of
confidentiality becomes. For the most desperate client, the law needs to
provide the most discrete lawyer.

Confidentiality in this day and age, is not a politically popular issue.

Political sentiment seems to be to the effect that lawyer/client confidentiality
should be limited, and should allow for liberal exceptions. Those exceptions are
tailored to matters that have attracted political attention: today, that attention
concentrates on drug-crime-related money laundering. Tomorrow it may be
(and in the recent past it has been) something entirely different – such
as terrorism (or politically motivated extremism. Jargon on this subject is very
disparate). In at least one EU-member state there is serious political
pressure to include (sexual) child abuse within the exceptions where
lawyer-client confidentiality would no longer be absolute.

It should not be misunderstood that both lawyers individually and lawyers

organized in Bars, are uncompromisingly opposed to all the evils
indicated above, be it money laundering, drug-related offences, terrorism,
child abuse, and all other forms of criminality or depravity. There is no
question at all that lawyers condone, let alone (tacitly) support or
encourage any of these phenomena. But it is an entirely different
matter, whether any of the stated
1
phenomena – or any subsequent phenomenon that attracts political attention -
could justify a serious inroad upon professional confidentiality of lawyers.
Tampering with confidentiality in any field, let alone in fields where clients have
an obvious and substantial need to consult their lawyers in a context of
unmitigated trust, is a very serious matter indeed. This strikes at the heart of
the lawyer’s duty to his client. By the same token it undermines the lawyer’s
duty to society in general; and taken further, it undermines the very principle of
fair trial itself. Proper access to qualified counsel is an essential element of fair
trial. That element is hopelessly compromised if access to counsel is likely to
entail - nay, even to encourage – fatal breaches of confidentiality.

Ill-considered proposals for inroads upon the lawyers duties and privileges with
respect to confidentiality cannot, therefore, be vigorously enough opposed. It is
a legitimate question whether art. 6 of the European Convention on
Human Rights does not compel lawyers by force of an overriding duty, to
disregard any obligations put upon, or suggested to them, that
insufficiently respect the absolute necessity of client confidentiality.

27
1
There are plenty of suitable candidates such as: serious environment-law infractions,
or serious corruption in public officials.

28
There is no rule with absolute validity. That is true for the rule on client
confidentiality also. One can imagine examples where the consequences of not
disclosing, to some appropriate extent, a client’s confidential information
could be so horrendous that an overriding duty to avoid those
horrendous consequences sets aside – to the extent necessary – the duty of
confidentiality. But it is a fallacy, and a serious misconception of essential
principles of law at the same time, to infer from the possibility of (very
limited) exceptions to the principle of confidentiality, that there may be a
broader, largely discretionary power on the part of the legislature to vary the
rules on confidentiality according
to political preferences or political expedience. Principles are not to
be stretched or limited in line with the dictates – or, for those less
positively inclined: the whims – of politics. The principle of confidentiality
provides a good example to illustrate that home truth.

In conclusion: the legal and moral obligations of the lawyer are epitomised in
one obligation that overrides all others: the obligation to serve the
legitimate interests of each individual client with complete loyalty,
diligence and dedication, and without allowing any other consideration to
interfere.

That is the lawyer’s duty with respect to his client. By fortunate coincidence, it
is also the lawyer’s duty towards his own profession and towards society at
large. Lawyers occupy the unique position in society which they occupy
precisely because there is a compelling societal need for this form of service:
totally reliable support for those in urgent need of that kind of support.

Of course, in specific instances the needs of society at large may seem

in conflict with the lawyer’s duty of loyalty to his client – but those are
misleading appearances. Properly percieved, everyone – the individual
client, the profession and at the end of the day the public good as well
benefits when lawyers take their primary duty to clients seriously and serve that
duty well.

29
30
Establishment of foreign law firms in hungary
Partnerships and co-operation between Hungarian and foreign lawyers
Dr Károly STEFANI
Lawyer, Budapest, Hungary

I. The situation of foreign law firms in Hungary prior to the new

legislative regulations

A. Setting up foreign law firms

1. Before the current legislation came into force, the legal profession was
governed by Legislative Decree No. 4 of 1983.

This legal text was introduced in 1983 as part of the general

trend toward liberalising the legal profession. Legislative Decree No. 3 of
1983 had already permitted lawyers to conduct their profession in legal counsel
practices, which at the time were called "legal counsel working communities"
(similarly, law firms were referred to as "lawyers' working communities", a
title quite in keeping with the prevailing ideology).

At the time, obviously, there was no question of foreign lawyers being

able to practise in Hungary. In fact, the economic situation was such that they
were just not needed.

2. 1991 saw a major change in the regulations governing our profession

(Law No. 23 of 1991). This change had two results:

a. it united the two legal professions, namely the order of legal counsel
and the order of lawyers, turning legal counsel into lawyers;

b. it abolished the obligation to exercise the profession as part of a

practice, in other words in the form of a mandatory association.

3. Even though this change dates back to 1991, ie almost two years after
the political and economic transformations in eastern Europe, and despite the
fact that economic and commercial trade with foreign countries was increasing
at this time and legal circles were undergoing radical change, this reform of the
regulations governing the profession passed over the issue of foreign lawyers
and practices in silence.

4. The establishment of foreign lawyers was virtually precluded by

the conditions set out in the Legislative Decree for inclusion on the Bar
roll: the lawyer had to hold Hungarian nationality, be permanently resident in
Hungary, hold a Hungarian law degree and have passed the Hungarian Bar
examination.

31
5. These legal regulations were largely overtaken by events, which meant
that at one stage the actual situation no longer corresponded to the
current legislation.

Foreign investors (mainly from the United States, but also from France
and Britain) were used to working worldwide with the same law firms in both
the tax and legal fields and wanted to be able to continue to do so in Hungary.

Before the political changes the Hungarian Government had opted for
the following makeshift solution: since foreign law firms could not open offices
in Hungary and foreign lawyers could not be included on the Bar roll, they
should simply set up a subsidiary agency and operate under this cover.

No one (not even the Bar) seemed to be bothered by the fact that such
agencies could not normally deal with cases in HUF (theoretically
debarring foreign law firms from receiving payments in Hungary in HUF)
or that legal work was not mentioned in the "exhaustive" lists of these
agencies' activities.

6. The de facto situation was therefore as follows:

Large American, British, and French law firms and medium-sized

German and Austrian firms were undeniably on Hungarian soil with their
foreign lawyers. They employed Hungarian lawyers for a fixed remuneration;
now, these lawyers were mandated by foreign law firms with a
fixed remuneration referred to as a fee rather than as a salary, and yet this
category
of legal employee was unknown at the time.

B. Co-operation between Hungarian and foreign lawyers

7. The whole area of co-operation was completely different at the

time, even though the situation was similar to that facing us today.

Previous legislative provisions contained no mention of such legal co-

operation, and so there was nothing to prevent a foreign lawyer from contacting
a Hungarian colleague with a view to either co-operating on a specific case or
drawing up an agreement.

Some Bars, for example in Budapest, decided that written agreements

between Hungarian and foreign lawyers or law firms should be officially
declared.

II. Current regulations on the establishment of foreign law firms and

legal counsel

The changing economic situation, increasing trade and growing foreign

investment in Hungary, the tightening links between our country and the
European Community and the resultant harmonisation of our
legislation situation have forced us to change the status of and
regulations governing foreign lawyers.
32
 Law No. 11 of 1998 on lawyers, which came into force on 1 July 1998,
comprises provisions on foreign legal counsel.

This Law retains the requirement (inter alia) of Hungarian nationality for
inclusion on the Bar roll, unless otherwise provided under an international
agreement. Further criteria are permanent residence in Hungary and the
Hungarian Bar examination. A foreign national cannot become a full
lawyer unless he or she fulfils these legal conditions.

On the other hand, foreign lawyers can practise as foreign legal

counsel and can (and must) be included on the register of foreign legal
counsel.

1. Chapter 9 of the Law on lawyers stipulates that foreign legal counsel

engaged in the activity as set out in the Law can exercise this activity on the
basis of a co-operation agreement concluded with a Hungarian lawyer or law
firm.

2. Foreign legal counsel can only operate in the framework of the

mandate assigned to the Hungarian lawyer or law firm with whom/which they
have concluded the co-operation agreement.

The Law permits the parties to include a provision in their agreement

enabling foreign legal counsel to accept an authority.

3. Foreign legal counsel cannot begin operating until their names have
been entered on the register of foreign legal counsel.

The register of foreign legal counsel

4. The Bar must include in the register of foreign legal counsel any
foreign lawyer who:

a. has a clean police record;

b. has an insurance policy in Hungary;
c. has not been debarred from registering;
d. can certify that he/she is authorised to exercise the legal profession in
the relevant foreign country;
e. has concluded a co-operation contract with a Hungarian lawyer or law
firm;
f. demonstrably enjoys a good reputation in the original country of
registration;
g. can prove that he/she is not involved in any criminal or disciplinary
proceedings;
h. can prove that he/she is working in a Hungarian law firm or a joint law
firm with a Hungarian lawyer.

The certificate concerning exercise of the legal profession abroad and

the attestation that no criminal or disciplinary proceedings are pending must be
issued by the Bar or other competent authority of the lawyer's country of origin.

33
5. Foreign lawyers cannot be included in the register of foreign legal
counsel:

a. if they are employed;

b. if they have professional obligations not covered by any contract of
employment;
c. if they are civil servants;
d. if they are public employees;
e. if they are solicitors;
f. if they are mayors;
g. if they own an enterprise with compulsory personal participation or
unlimited responsibility;
h. if they themselves or their foreign law firms have set up a subsidiary
agency in Hungary;
i. if a court has banned them from exercising their civic rights or
profession, for the ten years following the end of the ban;
j. if they have served a non-suspended prison sentence for a deliberate
crime or offence, for the ten years following their release, if they have
received a suspended prison sentence, for the three years
following the end of the period of suspension;
k. if they have been placed under guardianship for (total or partial) legal
incapacity, or if they are legally incapacitated without a guardian;
l. if their way of life or behaviour makes them unworthy of the necessary
public confidence for exercising the profession.

All these grounds of exclusion except h. are general clauses that also
apply to Hungarian lawyers. The prohibition mentioned in h. is understandable
in the light of our foregoing comments on the previous mode of operation of
foreign law firms.

The functioning of foreign legal counsel

6. Foreign legal counsel may inform clients:

a. about the law and case-law of their original country of registration;

b. about international law and case-law;
c. about European Community law and case-law.

They may not exercise any other legal activity.

7. Foreign legal counsel are not members of the Bar; when

exercising their activities they must mention this fact and avoid giving the
impression of being authorised to operate as a Hungarian lawyer.

8. Hungarian lawyers or law firms may mention the name of the foreign
law firm or foreign legal counsel alongside their own name or title.

During their period of activity in Hungary, foreign legal counsel

may use their name or the title of their foreign law firm, with a mention
of their capacity as foreign legal counsel.

34
9. The Hungarian lawyer may enter into a partnership with the foreign law
firm with approval from the Bar.

Disciplinary sanctions

10. Disciplinary sanctions are virtually the same as for lawyers, viz:

a. reprimand;
b. fine;
c. striking off the register of foreign legal counsel.

Striking off the register of foreign legal counsel

11. Foreign lawyers must be struck off the register of foreign legal counsel:

a. if they do not fulfil the conditions for inclusion on the register

of foreign legal counsel;
b. on expiry of their contract of co-operation with the Hungarian
lawyer or law firm;
c. if the corresponding disciplinary sanction has been imposed;
d. on their death;
e. if they themselves or their law firm has opened a subsidiary
agency in Hungary.

III. Co-operation between Hungarian and foreign lawyers

This section deals with formal and informal co-operation between

lawyers on specific cases, rather than on projects to establish the foreign
lawyer in Hungary. The informal type of co-operation concerns cases
where the lawyers have not concluded a co-operation agreement or
engaged in written correspondence.

Like the previous legislation, current texts on the legal profession

in Hungary are silent on the issue of co-operation between self-employed
lawyers established in different countries.

The resolution of the Budapest Bar prescribing the presentation

of a written agreement is still in force, which means that if a lawyer
practising in Budapest signs such an agreement he or she must submit it to the
Bar.

In Hungary, therefore, co-operation between self-employed lawyers is

completely free and unrestricted.

IV. Conclusions

1. The establishment of foreign law firms is a highly delicate issue for all
countries, not just those in central and eastern Europe.

Western countries have made some progress in this particular legal

35
field. Debates were held on the possibility of allowing foreign lawyers to open

36
offices in the national territory and therefore take over part of the local clientele.
Local lawyers put up the same resistance, but in the end they had to face the
facts.

Whatever happens the client/customer is always right. If clients want

to use their usual lawyer or law firm, no one can stop them.

It is true that this entails making over part of the market to

foreign lawyers, but in the long term this phenomenon can also provide new
clients for local lawyers. This is because foreign investors may well in the long
run decide
to stop paying the high fees imposed by foreign law firms, and also because
major investors are followed by small and medium-sized enterprises and
industries, which are unwilling (and possibly unable) to pay high fees.

2. The attitude of host countries to foreign lawyers and law firms

may vary, but the one constant is that no host country can afford not to lay
down regulations on the establishment of foreign lawyers in its territory.
Such regulations are required because foreign law firms are there,
whether we like it
or not. Ignoring the issue will not make it go away. This is why countries that
have not yet settled the problem of establishment of foreign lawyers must act
on the basis of the objective facts and draw up legal rules to provide optimum
protection for the interests of local lawyers.

3. Where co-operation among self-employed lawyers from

different countries is concerned, one of the first effects of the economic
changes and increasing international trade (to which I have referred a number
of times in this statement) has been to prompt Hungarian commercial
lawyers with international clienteles to identify foreign lawyers with a view to
co-operation. I think the same thing has happened in other central and
east European countries.

We have now reached the point where it is no longer sufficient for a

Hungarian lawyer to act as a contact for a lawyer from a western
country. More and more Hungarian lawyers are having to co-operate with
lawyers in other countries in order to deal with individual investment
cases, to draw up international contracts or to assist local clients in
proceedings abroad.

Moreover, these changes are affecting not only commercial

lawyers (although they are in the front line) but also lawyers operating
in more traditional fields, because the increasing freedom of movement of
persons and liberalisation of the purchase of goods abroad often raise
problems in the fields
of family law or real estate.

It is true that co-operation between lawyers from different countries can

only develop slowly, because before becoming a regular partner of a foreign
law firm a lawyer must co-operate on a number of cases so that each side can
judge the quality and competence of the other's work. However, I am sure that
37
expanding relations will lead to ever closer co-operation among lawyers
practising in all the different States.

38
Multidisciplinary partnerships
Ms Petra HEINICKE, Rechtsanwältin München

My topic today is neither “multinational multidisciplinary partnership“ nor

“crossborder practice of multidisciplinary partnerships“, simply “Multidisciplinary
partnerships“and I do not want to change that.

Nevertheless, when starting preparations for this talk, I thought it might be a

good idea to check the CCBE regulations for some clues which problems have
to be discussed. My reading ended up with a keyword index containing
five terms:

Incompatible occupations (2.5)

Corporate spirit of the profession (5.1)
Obligation of confidentiality (2.3)
Conflict of interest (3.2)
Fee-sharing with non-lawyers (3.6)

This keyword index can be condensed to only three general aspects:

 First, the influence of multiprofessional partnership on the

traditional concept of a free and independent profession with a
recognizable corporate spirit.

In discussing this aspect we certainly have to ask ourselves if all parts of this
traditional concept and it´s realization in lawyer’s lives nowadays can
be considered valid and appropriate guidelines for the future.

As the Explanatory Memorandum and Commentary on the CCBE Code

of Conduct states concerning incompatible occupations after stating that there
are significant differences both between and within member States concerning
this,
is the following:

“the variations in this rule reflect different local conditions, different perceptions
of the proper functions of lawyers and different techniques of rule-making“

So I think we should keep an open and critical eye on both our different and
common traditions, because some parts might not be essential or might even
be hindering the understanding and keeping of function and true meaning in a
modern world.

This aspect alone should guarantee a lively discussion among the participants

 The second aspect is the influence of multi professional partnerships

on the client-lawyer relation

39
In the CCBE Code of Conduct the client-lawyer relation is illustrated by the
obligation of confidentiality and the rules for conflict of interest. By this it
is shown that confidentiality and loyalty form characteristical, essential
and generally accepted parts of our professional ethics.

Both confidentiality and loyalty are important parts of the traditional self-
concept of the profession, not only representing duties, but professional
privileges as well. But since the final meaning and aim of those rules is
the client-lawyer relation that works, and confidentiality and loyalty are
especially noticeable and noted by the clients and the public in general,
forming their concept and perception of our profession, these rules should be
discussed – or let me better say presented, because I don´t think those two
rules should be questioned - in the context of the function and not of the status.

Since our profession is a serving profession it is essential and basic that any
rules for multidisciplinary partnership must focus on keeping the client-lawyer
relation undisturbed and intact. There is danger enough from other sources, as
we all know.

The safe and simple way to guarantee the intact client-lawyer relation is to bind
the partners to the Code of Conduct for lawyers or at least to the central and
most important parts of it, as a minimum standard each partner has to fulfil –
and, on the other hand bind the lawyer to the Code of Conduct, or the most
important parts of it, of the other professions of the partnership as well.

For example, the German law on the Bar (Bundesrechtsanwaltsordnung)

allows partnerships with patent lawyers (Patentanwälte), accountants
(Steuerberater) and auditors (Wirtschaftsprüfer), and the Statutes
(Berufsordnung), recently passed by the Statutory Assembly
(Satzungsversammlung), say that a lawyer entering such a
multidisciplinary partnership must make sure that his partners will respect
the rules in the Statutes and the Law on the Bar as well.

My example from Germany also shows the difficulty of this solution:

A German auditor is professionally bound – when acting as an auditor

for a client – to inform the tax authorities about any irregularities found. So
in this case a partnership cannot be both auditing and giving legal
advice or representation. Although the partnership is still possible, it´s
area of working together is restricted and in some cases forming a
partnership may not make economic sense at all – for example only very big
clients can afford the service
of an auditor as a sort of unofficial pre- or test auditor, which would be the only
way to have the services of the lawyers of the partnership at the same time or
afterwards.

But we do need the guarantee of the intact client-lawyers relation and should
restrain for weakening our basic and central rules, at least these must
be accepted by multidisciplinary partnerships.

 The third and last aspect of multidisciplinary partnership is the

40
economical aspect and this aspect evokes a lot of questions.

41
Since I took CCBE as a starting guideline today, let me start by saying that the
CCBE regulation on sharing fees with non-lawyers are not designed to prevent
fee-sharing within multiprofessional partnerships where those are an approved
form of cooperation as it clearly says in the explanatory memorandum, so the
CCBE Code stays neutral on multidisciplinary partnerships.

Now, what are the economic aspects that make or could make lawyers wish to
form multidisciplinary partnerships and clients look for them.

I think everybody knows these two sayings

- Money rules the world

- time is money

 Multidisciplinary partnerships allow a high degree of specialization

combined with service “from one hand“.

The lawyer who needs certain specialist input for his legal work, e.g. medical
advice, technical advice and so on, could find this advice within his own office,
saving him or her the building up or renewing of an outside expert contact plus
saving part of the time for passing on information between the expert and the
client. By this he or she will certainly be saving time and perhaps be
saving money (if there is enough work for the expert).

The client perhaps could communicate his needs and his basic information only
once and thus save time . For this advantage an informal “conference
of experts“ would do as well – but working together on a permanent basis
in a kind of partnership with an organised legal structure will make the
organisation
of working together quicker, swifter and smoother, this is obvious. For some
clients’projects you have to bring together a team of specialists very quickly
and this could hardly be done without an organised structure existing before.

 A multidisciplinary partnership might bring advantages or

disadavantages concerning the taxation, as might happen with the
German “Gewerbesteuer“, which might be translated as business tax.
Since a lawyer does not run a “business“ he or she need not pay
Gewerbesteuer – but if a partnership is taxed and only one of the members is
running a business branch
of the partnership, Gewerbesteuer has to be paid for all the income, not only
the one derived from the business. So the taxation rules should be
given a thought by potential partners.

 A lawyer’s advantage in forming a multidisciplinary partnership

might also lie in generating new clients from the contacts of his partners.

In Germany, for example, many persons contact their accountant on a regular

basis and their accountant is the first person they ask when they need legal
advice (which the accountant is only allowed to render on questions concerning
taxation). Lawyers still in many persons’ minds are automatically
42
connected with going to court, and restricted to that area, not seen as the
source of advice
of how to keep outside the court and solve problems. But again, this advantage

43
could be gained on a very low level of common organisation like just sharing
offices or giving references.

The advantage of generating new clients is confronted by the possible loss of

clients or clients-to-be for example, in Germany the Law on the
Bar (Bundesrechtsanwaltsordnung) forbids one to act in conflicting interest
when any of your partners has acted or acts in the other side. Since a
significant risk
or a conflict is enough to hinder any doings and these rules are also applicable
for lawyers simply sharing offices (that would meen even if lawyers use
different letterheads, don´t accept cases as a team, but each on his or her own,
pay their own staff, but share rooms, phone and photocopier and things
like that), building up a partnership might even make the potential market for
the lawyer smaller.

I think I just used an essential keyword, the word “market“.

In discussing regulations for multidisciplinary partnership we should not centre

on the question whether those partnerships make sense or are needed – this is
a question the market will answer better than we can. The world around us is
changing quickly and with it are changing the needs of clients and the circle of
potential clients. It would be bad only to react afterwards. The German
experience has been that lawyers have lost a lot of their potential market to tax
accountants and economical advisors, only realizing that there is a
market when those had already occupied it in large parts. Reacting
afterwards also has the danger of having to act in a hurry and under
pressure, this situation does not always guarantee the best results.

So I think we should open the opportunities liberally, with just as many rules as
needed to keep the essentials intact and give room to the creativity and
the future ideas of those of our colleagues who wish to form
multidisciplinary partnerships. Even “exotic“ partnerships might be
needed and therefore accepted by the market – I will give you an
example from Germany again, where a big legal firm put an agricultural
engineer on their letterhead thus giving the impression of a partnership.
This had to be stopped by the Bar because it is clearly not in accordance
with today´s German Law on the Bar (Bundesrechtsanwaltsordnung) – but
honestly speaking I think agreeing to such a partnership would not bring
danger neither to our profession as a whole nor to the public.

Before I come to the end, I will now do something you might have expected in
the beginning and give you a short and certainly incomplete, but
hopefully comprehensive survey of the legal landscape in Europe concerning
the rules on multidisciplinary partnership.

My information on this might not be perfectly up-to-date, because the reference

book I used (Cross Border Practice Compendium) is from 1991 and things may
have changed outside Germany as well. So please don´t hesitate to
correct me.

Belgian lawyers are not allowed to form partnerships with members of

44
other professions.

45
In Denmark the situation is the same.

In England at the time being barristers and solicitors may not form partnerships
with members of other professions, but there is a recent discussion
(Green paper of the Lord Chancellor) of opening multiprofessional
partnerships for solicitors. For exemple partner professions auditors,
surveyers, engeners and architects are named.

France allows the free or learned professions to form

interprofessional partnerships. But up to now there is only a law stating the
rules for architects and naming their eligible partners.

Italy seems not to allow multidisciplinary partnership.

Norway, Finland, Austria, Sweden and Cyprus do not allow it.

The Netherlands allow partnerships with members of otherlearned or free

professions, as long as those professions have a similar Code of Conduct to
grant the lawyers’independence.

Spain neither allows nor forbids, so multidisciplinary partnerships would be

allowed unless a law distinctly rules out a profession as not elegible.

Leaving our continent for a moment, let me say that

United States seem not to allow multidisciplinary partnerships.

I would like to thank the audience for their interest and patience. I am looking
forward to hearing your opinion now and hope for a lively discussion.

46
47
Publicity and advertising of legal services and their forms
Mr Stanislav BALÍK
Lawyer,, Czech Republic

Problems of advertising and personal publicity of a lawyer form one of

the current subjects which are often discussed in individual Bar Associations
and on an international scale. I am aware that the views concerning this sphere
are different particularly in Anglo-Saxon countries on the one side, and
in countries applying the continental legal system on the other side.
The differences in opinion on advertising and personal publicity of a lawyer
however may even be examined by comparing the current situation in
various Bar Associations, European countries or, generally speaking, within
any sort of comparison. Both traditions in whichever Bar Association or
country and the current circumstances of said legal profession and its
prospects in the next millennium contribute in a significant way to these
differences. The same factors, as anywhere else must necessarily affect the
regulation of advertising lawyer´s services and his personal publicity in the
Czech Republic. I will now attempt to deal more closely with this issue by
taking examples from the past, provide information on the present and
outline prospects of said theme from the viewpoint of the Czech Republic.

The roots of the modern legal profession on our territory date back to
1
1868 when the Code on the Legal Profession No. 96/1868 Code of Laws was
passed for the then Cisleithan Regions. This legal regulation may not
have expressly modified the advertising and personal publicity of a
lawyer, nevertheless the provision of Section 10 of the quoted law, by
which “the lawyer is fully obliged, in all the guiltlessness and honesty of his
conduct, to preserve the honour and respectability of his profession”, allowed
the bodies of the Bar Associations to extensively regulate both professional
regulations and the disciplinary judicature. Hence, on the one side there were
efforts by lawyers
– individuals to draw attention to themselves for the purpose of acquiring
clients and on the other side the efforts of professional authorities to obstruct
these actions. So by drawing from individual examples regarding the
formulation of legal regulations of the time, it can be deduced that some
lawyers advertised their services in a truly undignified manner while
others, even dextrously, made use of forms of difficul t to detect, concealed
advertising.
I now present several demonstrative examples.
2
In 1870 the journal “Právník” (Lawyer) published a short news item
entitled “Punished Boaster”. The text deserves to be quoted:

1
For more information see S. Balík: “Czech Legal Profession in the Light of
Legal Regulations from 1868-1914 and their Contemporary Interpretation”. “Studies
in Legal History, 33, 1993”, pages 97-116; also, “The Past, Present and Prospects of
the Legal Profession, Pilsen 1998”, pages 32-37; S. Balík, R. Keller: “Traditions

48
of the Legal Profession in the Czech Lands (Selected legal regulations on the Legal
Profession from
1868-1948), Prague 1995”, pages 15-29.
2
Comp. “Lawyer”1870, page 36

49
 “A well-known lawyer from one country town called Dr. St. boasted at
one social gathering that throughout his time as a lawyer – that being a good
many years – he had never lost a dispute. His boasting happened to be heard
by one Prague lawyer, a Dr. Š who wasted no time in making his
opinion known that Dr. St.´s claim was a mere display of boasting. The
former was annoyed at first but soon began to back down by stating that what
he meant by disputes, were not those executed in brief nor as part
of bankruptcy proceedings, but Dr. Š. was unyielding and offered a bet that
the former´s claim was untrue even with regard to disputes conducted in
writing. Of course, Dr. St. tried to talk his way out, but there was nothing let
for him and not wanting the entire company present to regard him as an
empty braggart, he finally agreed
to a bet of 10 bottles of champagne which he would pay for if Dr. Š.
could prove that Dr. St. had really lost a dispute conducted in writing, whereas
Dr. Š. would have to pay for the same quantity of champagne if
unsuccessful. So a court of settlement was immediately established as
agreed by both parties which would, in its time, make an award as to
which party had lost the bet. Even before the set deadline, Dr. Š presented
the court of settlement proof that Dr. St. had not only lost a dispute conducted
in writing, but had already lost it in
all three instances and that he had even been fined 5 sovereign at the third
instance.

Likewise, Dr. Š. charged Dr. St. for the costs he had incurred to the
matter related therein. Several days ago, the court of settlement made
an award which found that Dr. St. had lost the bet, is obliged to pay for 10
bottles
of champagne and pay Dr. Š.´s costs of 29 sovereign, 99 1/2 kr. mitigation. In
this way Dr. St. made a complete fool of himself.”

However, boasting in front of clients and potential clients was not all. In
1886 a disciplinary council of the Bar Association in the Kingdom of Bohemia
found a “certain lawyer guilty of advertising his firm using fairground-
3
type posters”and thereby violating the respectability of the legal profession.

Nevertheless, lawyers drew attention to themselves in a greater

way directly within a courtroom. There is no doubt that Alfréd Hrdlicka was a
good and sought after defence lawyer in criminal cases in the 1880s,
nevertheless in view of the fact that he was also legal representative of the
daily newspaper “Národní politika”(National Politics) and its editors, his court
appearances were covered by the newspaper in commentaries with such
formulations as: “he defended his client with great warmth of feeling”or
“gave an ingenious defence speech” with a conclusion sounding something
like “as a consequence of this,
4
the court found X.Y. not guilty”

The Bar Association obviously reacted to the described conduct

of lawyers. In the circular no. 985 of April 26 1902 circulated by the
Bar Association in the Kingdom of Bohemia it was written that:

50
3
Comp. “National Policy”, no. 27, 27.1.1887.
4
Comp. eg. “National Policy”, no.8 (supplement), 8.1.1887; No. 20, 20.1.1887; no. 118,
29.4.1887; no. 133, 14.5.1887; “Czech Policy”no. 41, 10.2.1887 etc.

51
 “In view of that fact that cases are increasing whereby colleagues are
apparently sending cases from practice and other news to a magazine in order
to advertise and, in a certain sense, to attract clients to their services,
the committee is forced to draw attention to the fact that such competition
damages the respectability of the legal profession. The committee is well
aware of the significance of the public for the performance of law and is
also far from the intention to restrict support for the way the press is giving
to talent, but must however express opposition to colleagues submitting
references and news to public newspapers which are to serve as
advertising and through individuals
5
are plying for business.”

The regulation of advertising in professional standards culminated

during the first Czechoslovak Republic. “Small adverts are only
permissible when a lawyer opens his firm or when he moves and this, of
course, must be restricted to the disclosure of the new address. No
other advertising is permitted.”

The advertising of lawyer´s name in various schematisms, telephone

directories, calendars, etc., if placed under the full description of the profession,
is considered to be permissible. However, no addition to a small advert such as
“tax expert”or “commercial matters”may be made to a name and address of
a lawyer.

As far as “Legal Counsellors” are concerned, it was pointed out

to several colleagues that they, as editors, are publishing not only their
names, but also their detailed addresses. Several even directly refused to
comply with the committee´s summons not to have their names and
addresses published for the reason that they are entitled to publish their
names and addresses as editors. It was therefore decided to forbid publication
of detailed addresses and recommend that colleagues should not even publish
their own names in order
to avoid suspicion of attempted advertisement, as was the standpoint in 1928
of the committee of the Bar Association in the Czech Lands announced to the
6
Moravian Bar Association in Brno. Four years later – during the period of the
economic crisis – the committee in response “to queries of colleagues as
to how often a lawyer may publish a small advert in the newspapers to
announce the opening or move of his firm” stated “that he may do so
only once, as a repeated advert could take on the character of inadmissible
7
advertisement”.

The development would no doubt take the road resembling

the development in Austria be it not for the February events in 1948. Act
No.
322/1948 Coll., which came into effect from January 1, 1949 abolished
8
the private legal profession. Legal work was gradually reduced and divided
into criminal, family, civil and labour law, advertising, in the true sense of the
word,

5
Comp. E. Tarabrin, “Basic Resolutions and Decisions of the General Meeting and
Committee of the Bar Association in the Czech Lands, Prague 1935, pages 13-14.
52
6
Comp. Tarabrin, Basic Resolution, Page 13.
7
Comp. Tarabrin, Basic Resolution, page 13.
8
Comp. See Balík, “The Past, Present and Prospects of the Legal Profession” pages
53-58; S. Balík, R. Keller, “The Czech Legal Profession during Times of Trial”. “Legal
Regulations on the Legal Profession from 1948-1994.

53
lost its meaning in a centrally planned economic system. In view of the small
number of lawyers, it tended to be more difficult to gain admittance to a lawyer
about whom it was claimed that he worked well, as on the
contrary egalitarianism made no difference in financial terms between a
more or less sought after lawyer …

The Czech Legal Profession – as it was known – after November 1989,

soon returned to the democratic model. This was understandably the case, at
least as far as advertising was concerned, not infrequently in a situation when
lawyers – individuals and the Bar Association literally “repeated” the
model actions of their predecessors under the Habsburg Monarchy or during
the first Republic. In this respect it is only right to recall two wise Latin
sayings – nihil sub sole and historia magistra vitae. However, the Czech Bar
Association not only remained with historical sources, but attempted to
gain information and utilise the experience of European countries as well
as the USA. The result was the provisions regarding publicity, advertising
and the commercial name of
a lawyer in the Rules of Professional Ethics and Rules of Competition of
Lawyers in the Czech Republic passed by a resolution of the Board of
the Czech Bar Association on October 31, 1996 in the form of a
9
professional regulation. The already quoted Subsidiary Rules to the Code
of Conduct of
Lawyers passed within the CCBE apply to the international activity of a Czech
lawyer. In view of this, I assume that today the Czech lawyer has the same or
comparable conditions open to him in the sphere of advertisement and publicity
as for lawyers in democratic countries with a continental legal system. Let us
now taker a closer look at the current Czech law.

In the sphere of publicity, a lawyer may, to a reasonable extent, inform

the public about his business in the periodical press, non-periodical
publications, the radio, television and on audio-visual media only on condition
that data on his business has been entered in the list of lawyers and no later
than 60 days from the entry. Such information may contain only the lawyer´s
commercial name and additional data on the fact that the lawyer is a
legal expert or interpreter, data on the legal areas the lawyer gives preference
to in his work, data on the fact that he is authorised to perform other legal work
too, data on permanent co-operation with local and foreign lawyers, data
on his registered office and branches, and in cases worthy of special
consideration also his name or pseudonym. (Section 25 (22) of the Rules).

A lawyer may inform the public of his commercial name and the
aforementioned additional data in media of a specialized, informativ e
nature, such as professional, telephone directories, local and similar lists.

A lawyer may also use other information media, be it printed matter or

records on other information carriers to inform his former, present clients and
anyone else who requests this, of his business, prices and hitherto work for his
former and present clients (Section 22 of the Rules).

9
For more information see the “Rules of Professional Ethics and Rules of Competition
54
of Lawyers of the Czech Republic”. A text with the commentary of JUDr. Karel Cermák,
the “Legal Profession Bulletin”, special edition, November 1996.

55
 However, a lawyer is forbidden to use advertising space, eye-catchers
and similar means of publicity for information about his business. A lawyer may
also distribute small tokens and gifts bearing his commercial name only
exclusively to his clients but which must be of a nature not to degrade
the respectability of the lawyer and the dignity of his profession (Section 26 of
the Rules).

In literary or scientific works from the field of law, of which a lawyer is

the author or co-author, the designation of “lawyer” with data on
the municipality which is the place of his business and on the commercial
name under which he performs his work may be added to his name,
surname and titles (Section 27 of the Rules).

Finally, a lawyer may not give his consent to anyone who wishes
to disclose information about his business beyond the scope as permitted by
the Rules of Professional Ethics and the Rules of Competition of Lawyers of
the Czech Republic (Section 28 of the Rules).

The current Rules are the fourth ethical code of laws in the
Czech Lands in force since 1989. So apart from these Rules, mention must
also be made of several decisions by the disciplinary commission from
10
1991-1997 relating to the sphere of advertising and publicity of a lawyer. A
certain shift can
be registered even here.

In 1991 a lawyer was found guilty and disciplined for distributing

leaflets together with a payment slip marked “Realty” and the address of
his law firm as well as his account number by means of sale at newspaper
stands and sticking them up for display offering transfer contracts, draft
registrations, advice and legal security.

Three years later a lawyer was found guilty for having a small advert
published in the newspapers offering “the drawing up of contracts on transfer
of real estate, including securing extracts from deeds of ownership,
expert opinions, estimates and executing all matters necessary for transfer
of real estate within fifteen days” with the possibility of providing legal aid
at the client´s abode.

In 1995 a lawyer was disciplined for advertising his law firm on plastic
carrier bags, and in 1996 it was decided that placing the name and registered
office of a law firm and the telephone number in the legal column is
not an infringement of the rules on lawyers´ competition, but in 1997 a
lawyer was disciplined for an inadmissible acquisition by sending out to
various legal entities a letter marked “Information on the provision of legal
and expert aid”in which he was offering his services.

What are the prospects in the sphere of publicity and advertising ?

10
For more information see the “Collection of Disciplinary Decisions of the Czech Bar
56
Association 1991-1997”, “The Legal Profession Bulletin”, special edition, March 1999.

57
 It can be deduced from past and present information and expected with
certainty that the Czech legal profession will continuously monitor and assess
the development in European countries and to make sure by a
consistent approach that the provisions regarding the conduct of Czech
lawyers in the ethical code correspond to the European standard. At the
same time, what cannot be overlooked is that further development in this
sphere will be affected by the expansion of the Internet.

I personally consider it essential that the dignity and respectability of

advertising be preserved above all. Legal services are not a normal commodity
and therefore certain practices of a somewhat aggressive type of advertising
cannot be allowed, e.g. in the form of slogans: “Colgate for teeth, a
good lawyer for divorce” or such promotional videos as the one about two
prisoners comparing their sentence for a similar crime with the conclusion
that the one with a stricter sentence was the one with the defence lawyer ex
offo, while the one with the more lenient sentence was the one who
chose defence lawyer X.Y. I am inspired, in this respect, by the Parisian
Bar Association which requires from its members to submit to
commissions designated for this purpose draft paid advertisements of their
firms (e.g. brochures, small adverts, etc.) before they are allowed to use such
forms of advertising. This prevents doubts, which perhaps could arise in the
case of disciplinary proceedings.

As far as unpaid or indirect advertisement is concerned, e.g.

advertising in the media, educational or scientific publication activity, such
advertising should be restrained. A lawyer should not augment his merits
concerning the result of a monitored matter through the media, he should not
conclude an educationally popular essay on generally conceptual
problems with remarks that “in specific cases it is better to seek out a
lawyer” or in columns where readers´ questions are answered, to regard
an answer too individually and too specifically in referring to the facts of a
case.

The lawyer – whether he likes it or not – is a homo politicus that

is carefully observed by an audience. However, it would certainly not be right to
prevent a lawyer from being a politician, a political party member, a member of
all sorts of civil associations or a sponsor of cultural and sports events with the
justification that he is also promoting his firm in this way.

In conclusion I wish to summarise that what applied in the sphere of

publicity and advertising of a lawyer up till now is the proverb:
“Different country, different mores”. In the age of globalization and
development of informatics, the differences between laws in various
countries and Bar Associations will undoubtedly be erased. What really will
be important on the threshold of the new millennium will be how relevant Bar
Associations and the world legal profession public will regard specific cases
and forms of advertising
as well as the subjective approach taken by each individual lawyer. The
situation on the market of legal services and traditions will certainly play its role
in future.

58
The Publicity: publicity of legal services and its different forms
Jorge ADELL
Abogado, LLM, Spain

“Advertising is the rattling of a stick inside a swill bucket”

Attributed to George Orwell, 1903-50

I. Introduction

The traditional distaste in the legal profession for personal advertising or

publicity stems from the idea that advertising is an unfair way of attracting
1 2
business, or “touting” , and that it lowers the tone of the profession .

The reason for the ban of advertising stems from the special character of the
profession, derived from its participation in the public function of
the administration of justice. The dignity of lawyers and the “standing of
3
the profession” derived from this role do not readily lend themselves to
4
publicity. The question of personal publicity for lawyers is a vexed one .

Advertising or personal publicity in the legal profession is contentious and

controversial and the rules vary substantially throughout the world, from
ample permission to absolute prohibition.

Recently, in many jurisdictions the rules on lawyers' advertising have been

5
relatively relaxed, although subject to certain conditions .
6
With the advent of the Internet, control of advertising has become difficult .
Consequently, in drafting a universal code for the legal profession, the

1
John G. Fish, CCBE, “Future of the Profession Re: Guidelines on
Advertising”: “Touting is defined as meaning a direct approach by or on behalf
of a solicitor to a person, who is not an established client, with the intention of
soliciting business from that person.”
2
Canon 27 of the ABA Canons of Professional Ethics, 1908, infra.
3
J. Maurits van den Wall Bake & Yves Comtois, “Restrictive Publicity Rules for
Lawyers: Towards a “Community” Definition of the “Standing of the Profession” ”, p.
119: “It is submitted that the issue of restrictive lawyers’publicity regulations, if
dealt with by the Court, could move towards significant liberalisation. Such a
conclusion
would be prompted by the view that these rules are simply not justified to safeguard the
“standing of the profession.... ”
4
J. Maurits van den Wall Bake & Yves Comtois, op. cit., European Law Review, Vol. 18,
Num. 2, April 1993, p. 110: “The issue of publicity for lawyers often creates
conflicts between proponents of two very distinct approaches: complete
liberalisation or total restraint.”
5
For example the Solicitors’ Publicity Code 1988 in England and Wales provides,
among other things, that publicity must not breach the Solicitors’Practice Rules, that it
59
must be in good taste and that it must not be inaccurate or misleading in any way.

60
difficulties faced in relation to personal publicity are as great as in any other
aspect of the practice of law.

II. Prohibition and Liberalist Positions

In the history of the legal profession, all

7
countries have until comparatively
recently prohibited advertising by lawyers . Several reasons have been given
for the said prohibition: i.a., public function of the legal profession in the
administration of justice; meeting of deontology rules (secrecy, dignity and
honesty); and prevention of damages to young lawyers and small firms (level
playing field).

Despite the above, for several decades there has been a tendency to relax or
even abolish the prohibition on publicity. Among other things, we can cite the
following reasons to justify this tendency:

- the rights of information of the consumers of private services over

the nature of legal services and the speciality and availability of the lawyer;

- freedom of speech: meeting antitrust and unfair competition acts;

8
- the advent of global competition ;

- equality of opportunity with other competing professions (accountants,

consultants, etc.);

- not loosing areas of work invaded by other professions and institutions

(real estate agents, banks and insurance companies, consumer
associations, public administrations, trade unions, etc.)

- advertising is considered necessary in the public interest;

- information which young lawyers require to join a firm (information within

the profession).

As a consequence of this tendency, three separate groups of countries used to

be distinguished until very recently, according to the level of advertising they
allow their lawyers:

a) Substantial Liberalisation

6
See Section X., infra.
7
In the Matter of Connelly, 18 A.D. 2.d 466, 240 N.Y.S. 2d. 126 (1st Dep’t 1963),
the partners of a New York firm were censured for allowing an article to appear
in ‘Life’ magazine in which their firm was described as having “the cream of
corporate business”.
8
Cameron Timmis, op. cit., p. 27: “If law firms did compete, at least they
were competing with their domestic rivals on a level playing field. But in the last five
years, lawyers - and accountants - from the US and UK have made major
inroads into the
61
European market.”

62
 9 10
The United States of America , Denmark, the United Kingdom ,
11
the Netherlands . In the United States, it was the decision of the Supreme
12
Court in Bates v. State Bar of Arizona which lifted the ban on advertising on
the basis
of the First Amendment (freedom of expression). The Court declared that
13
advertising restrictions were unlawful and that the First Amendment protects
truthful advertisements in newspapers, although it allowed the States to
establish reasonable limits of time, place and form of advertising and prohibited
false or misleading advertising.

b) Moderate Liberalisation
14 15 16
Belgium , France, Germany (Federal Lawyers Act) , Spain ,
Luxembourg.

In France, for example, the Law of Reform (1991) permits advertising

17
with certain conditions. The Paris Bar issued a series of rules in 1995
prohibiting given advertising activities (such as leaflets, or cinema or television
advertising) and allowed others (advertising by the Internet, Minitel, legal
directories, etc.).

In Spain, many believe that the original prohibition on advertising and

publicity has become outdated, not only as a “social reality” but also according
to the conclusions of the legal profession following its Sixth Congress of

9
Model Rules Of Professional Conduct of The American Bar Association, Regulations
7.1 and 7.2. Also Richard Whish, Competition Law, 2nd Edition, p. 433: “Restrictions on
advertising in the US are regarded as an indirect form of price fixing and are accordingly
per se illegal.”
10
The UK was one of the first countries to liberate advertising in the profession,
its Solicitors’Publicity Code 1990 providing that publicity be allowed but that it must not
be either in bad taste or misleading.
11
Verordening op de publiciteit (Ordinance on Publicity), which was adopted and
became effectiv e on 1st January 1990.
12
433 US 350 (1977).
13
Under the Sherman Act 1890.
14
National Order of 25th June 1990. There remains a complete ban on proactive
advertising.
15
Section 43 (b) of the BRAO states: “Lawyers may only advertise insofar as the
advertising contains information about the professional activity in form and content, and
is not directed at obtaining instructions in individual cases.”In other words advertising is
allowed as long as it is not aimed at securing assignments from particular clients.
16
In Spain, the General Statute of the Legal Profession, Royal Decree 2090/1982, of
24th July (Art. 31) and the Code of Conduct of the Legal Profession prohibit the use of
advertising media, directly or indirectly, whether by lawyers under their own initiativ e or
accepting offers from third parties, as it is considered an unfair means of
securing clients.
17
The principal stipulation is that the advertising provides information necessary to the
public. On 28th March 1995 the Paris Bar adopted certain rules forbidding publicity by
means of letters, leaflets, advertising posters, cinema, radio or TV advertisements on
the grounds that these forms of advertising would constitute canvassing, which is
prohibited. Newspaper advertising, however, is allowed but the advertisement must first
63
be approved by the Paris Bar Council.

64
 18
Spanish lawyers . In Spain certain bars have slightly relaxed restrictions
on publicity whilst others maintain the regime of prohibition. In principal,
19
within certain limits publicity is allowed and the new proposals, which have
20
only very recently been approved , reserve to the various bar councils
21
the power to authorise and generally control lawyers’publicity .

c) Total Prohibition
22
For instance, Portugal , Greece.

III. Restrictions Imposed

It is important to stress that all countries which allow advertising by

lawyers impose some kind of restrictions, for instance:

a) In Liberali st Countries (e.g. USA)

- the lawyer may not make false or misleading statements about

23
himself or his services (Bates v. State Bar of Arizona).
- the lawyer must keep copies of advertisements and statements for 2
years.
- the lawyer may not pay commission for recommending his services
(except the reasonable cost of the advertisement).
- the lawyer may indicate that he does or does not deal with specified
areas of the law, but he may not declare himself a specialist except in
the areas of industrial property (patents and trademarks) or maritime
law or after having obtained certain previously recognised
and validated certificates on speciality on certain areas.
- solicitation personally or by telephone is prohibited; written solicitation
is permitted except in those cases where the potential client does not
wish to be solicited by the lawyer, or where there is coercion, threat
24
or harassment (Ohralik v. Ohio Bar Association (1978)) .

b) In Moderately Liberalist Countries

18
Luis Revenga Sánchez, “Consideraciones sobre la Publicidad profesional de
los Abogados”, Abogacía Española, Num. 4, Año I, Agosto/Octubre 1997, p. 3. A
General Statute of the Legal Profession was approved by the Assembly of
Presidents of the Spanish bars in October 1995 but has yet to be enacted.
19
Act num. 7/1997, of 14th April, Art. 2º.1 permits “offers of services”, subject to the
Protection of Competition Act and the Unfair Competition Act.
20
General Statute of the Legal Profession, Art. 26. As recently as December 1997 the
Consejo General de la Abogacía (General Council of the Legal Profession) approved
the Ley de Colegios Profesionales (Professional Associations Act). Lawyers shall not be
allowed to refer to clients, undertake comparative advertising or use corporate symbols,
and advertisements in magazines, journals or bulletins cannot be placed more
than once per week.
21
The local bars will play an active role in authorising publicity, supervising the
publication of brochures and circulars.
22
Art. 80 of the Ordem dos Avogados.
23
433 US 350 (1977).
24
436 US 447 (1978)
65
 - advertising has to be true and respectful of professional
confidentiality.
- respect the dignity, tact, probity and discretion.
- prohibition of reference to qualities or comparisons, of clients.
- obligation to communicate all advertising to the professional
association, possibly seeking the approval of the same.
- regulation of mentions in correspondence.
- exterior signs with the permission of the relevant professional
association.
- television and newspaper advertisements to comply with prescribed
25
guidelines .

26
IV. Lawyers’Advertising in the United States

In the USA, the right to free speech is cherished. Such protection was
27
first afforded to the world of commerce in 1976 . Prior to that, a long-standing
professional prohibition on advertising, imported from England, was in force as
illustrated by the original form of Canon 27 of the ABA Canons of Professional
Ethics in 1908, which considered that publicity and advertising “defy the
traditions and lower the tone of our high calling, and are intolerable”.

This total prohibition persisted until the early 1960’s when

pressure was brought to bear both from inside and outside the
profession. The Department of Justice and the Federal Trade
Commission led the way in challenging the notion that consumers were
incapable of making an informed decision on the basis of the information
28
put before them , and the ban was also challenged on the grounds that
it discriminated against certain types of
29
lawyer .

The most significant change occurred in 1985 in the case of Zauderer

30
v. Office of Disciplinary Council of Supreme Court of Ohio . In this case it was
held that the First Amendment was violated by a state rule that forbade
attorneys to solicit or accept employment through advertisements
31
containing information about a specific legal problem . Subsequently,
however, this

25
Interior Regulations of the Paris Bar, Article 5.4.
26
Geoffrey C. Hazard, Jr., Susan P. Koniak, Roger C. Crampton, “The Law and the
Ethics of Lawyering”, Second edition, pp. 957-985.
27
Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 US
748 (1976), in which it was held invalid under the First Amendment to restrict advetising
by pharmacists.
28
Justice Department testimony on the anticompetitive effect of the ban on advertising,
60 A.B.A.J. 791, 792 (1974).
29
Jerold S. Auerbach, “Unequal Justice”, pp. 43-44: “Tha Canons especially
impeded those lawyers who worked in a highly competitive urban market with a
transient clientele....”.
30
471 US 626 (1985).
66
31
In this case it was stated, however, that lawyers could still be disciplined if they
included information in their advertisements which was deemed to be misleading.

67
relaxation of32the rules has been restricted to exclude ‘mail-shots’targeted
at individuals .
33
Since 1989, the ABA Rules have been amended in relation to
advertising and this aspect of practice is governed by Model Rule 7.2, which
provides, inter alia:

“(a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer

may advertise services through public media, such as a telephone directory,
legal directory, newspaper or other periodical, outdoor advertising,
radio or television, or through written or recorded communication.

(b) A copy or recording of an advertisement or communication shall be

kept for two years after its last dissemination along with a record of when and
where it was used.”

The aim of this regulation is to make information available to the public,

whilst controlling what constitutes good taste or ‘undignified’
advertising remains a matter for individual States. Direct contact with a view
34
to soliciting business from potential clients remains prohibited since the
situation is
fraught with the possibility of the exercise of undue influence, particularly over a
financially and/or socially weak prospective client who may be under
considerable stress already by reason of the circumstances giving rise to his
need for a lawyer.

There are also regulations in relation to what defines a ‘specialist’and

when a lawyer can describe himself as such, as well as the style and position
35
of letterheads and firms’ names . In these respects there are similarities
between the US and some European countries. Nevertheless, the USA has to
be seen as one of the most, if not the most, liberal country in respect of
lawyers’ advertising, and this is perhaps exemplified by the use of
36
television advertising .

V. Lawyers’Advertising in the IBA

Regulation 8 of the Code of Ethics of the IBA respects the position of

this matter in each jurisdiction and establishes that lawyers shall not be able to
advertise or solicit business except in the permitted form according to the rules
of the jurisdiction to which they are subject. It also prescribes that lawyers may

32
Shapero v. Kentucky Bar Association, 486 US 466, 108 S. Ct. 1916, 100 L. De. 2d
475.
33
ABA House of Delegates, New Orleans, Louisiana, per Report No. 120B; February
12, 1990, ABA House of Delegates, Los Angeles, per Report No. 8A.
34
ABA Model Rules, 7.3 (a).
35
ABA Model Rules, 7.4 and 7.5.
36
In 1990 US lawyers spent $82.3 million on television advertising. However, only 3% of
lawyers actually use television and radio to advertise, and a quarter of this was spent by
68
the five largest users; Record TV Legal Ads, Nat’l L.J., Apr. 16, 1990, p. 6.

69
not advertise or solicit business in countries where advertising or solicitation is
prohibited.
37
The Code is not in itself setting any global standard.

VI. Lawyers’ Advertising and the original approach of the 1988 CCBE
Code of Conduct

Given the diversity of the various Member States’ individual

regulations, in 1988 the CCBE Code could not establish a general rule
and decided instead to respect the principles of each country in stating:

2.6.1 “A lawyer should not advertise or seek personal publicity where

this is not permitted”.

In other cases a lawyer should only advertise or seek personal publicity

to the extent and in the manner permitted by the rules to which he is subject.

2.6.2 “Advertising and personal publicity shall be regarded as

taking place where it is permitted, if the lawyer concerned shows that it was
placed for the purpose of reaching clients or potential clients located
where such advertising or personal publicity is permitted and its
communication elsewhere
is incidental”.
38
The Explanatory Memorandum of the Code states that the term
“personal publicity” includes the advertising of both firms and
individual lawyers, as opposed to the functional or corporate advertising
organised by the professional bodies for its members collectively. In spite of the
wide variation in regulations on publicity throughout the various Member
States, the Code does establish a general rule and limits itself to requiring
lawyers not to advertise in
39
those territories in which it is not permitted for local lawyers. Otherwise, it
provides that the lawyer ought to observe the rules on advertising established
by his own professional association.

The CCBE’s position was later changed as set forth below.

VII. The Decision of the European Court of Human Rights in Casado Coca v.
Spain (1994).

37
Supra.
38
This Memorandum is annexed to the Code and was prepared at the request of the
CCBE standing committee by the Deontology Working party, which was responsible for
drafting the Code itself. It seeks to explain the origin of the provisions of the Code and to
illustrate the problems they are designed to resolve. However, it has no binding force in
the interpretation of the Code.
39
For these purposes, the regulations of the Code clarify the question of the country in
which it is deemed that the advertising takes place. For example, the lawyer
whose association allows him to advertise can advertise in newspapers of high
circulation within that state, even though some such publications may be

70
circulated in other Member States where it is prohibited. On the other hand, he
cannot advertise in a newspaper whose publication is principally directed at a
territory where advertising is
prohibited.

71
 40
The decision in Casado Coca v. Spain confirms the prohibition of
advertising which has been the rule for many years in Spain. The facts were as
follows: the claimant was a lawyer who published advertisements in
various magazines and sent letters to various firms offering his services. That
provoked the appropriate sanctions on the part of the respective professional
association,
which were upheld by the General Council of Spanish Lawyers. Subsequently,
these sanctions were upheld by the Territorial Court and by the Supreme
Court, which held that art. 20 of the Constitution did not protect
the dissemination of advertising material as a fundamental human right,
as this was not about expressing thoughts, ideas or opinions, but to
signal the existence of a professional activity for profit.

The Constitutional Tribunal said that the prohibition of the advertising of

professional services did not fail to have regard for fundamental rights.

In the light of precedents, the European Court justifies its position

(contrary to the claims of Casado Coca) in the following way:

a) the specific nature of the legal profession has to be accounted for:

in his capacity in the administration of justice, the lawyer benefits from
the monopoly and the immunity of defence, but he has to conduct
himself with discretion, honesty and integrity. Restrictions on advertising are
usually rooted
in these peculiarities.

b) the function of the Court limits itself to investigating whether the

measures taken at national level are justified in their intention and if they are
commensurate.

c) the ordinary authorities or the national courts are in a better

position than an international judge to specify, at any given moment,
where justice lies between the various interests in play: the needs of a good
judicial administration, the dignity of the profession, the rights of all persons to
receive information about judicial assistance and the possibility of lawyers
advertising their services.

In general terms, advertising is considered to be an essential part of the

commercial process, that to restrict advertising restricts commercial
41
activity and that it may conflict with general principles of competition
law. This case serves as an ample demonstration of the uniqueness of the
legal profession in
the realm of advertising.

VIII. The Study of the Working Group of the Deontology Commission of the
CCBE

72
40
Judgement of the European Court of Human Rights of 24th February 1994 (Matter
8/1993/403/481: Pablo Casado Coca -v- Spain).
41
E.g. the case of Re. Vimpoltu OJ [1983] L 200/44, [1983] 3 CMLR 619 - EC
Commission decision 83/361.

73
 Despite objections from some quarters, prohibitions and restrictions
cannot continue to exist without taking into consideration the present
reality. In general many bars have introduced changes or are contemplating
proposals to relax regulations although this matter continues to be very
42
controversial.

As previously mentioned, a Working Group of the

Deontology Commission of the CCBE proposed changes to the Code and this
included the field of personal publicity. In the report of 18 November 1996,
the following proposal was made:

2.6.1 “A lawyer is entitled to inform the public about his services provided
that the information is objective and serves a legitimate public interest”.

2.6.2 “Advertising or personal publicity in any form in the press,

radio, television or other media is permitted only to the extent it complies
with the requirements of 2.6.1”.

2.6.3 “Advertising or personal publicity shall be regarded as taking

place when it can be shown that it was placed for the purpose of reaching
clients or potential clients”.

Personal publicity was recognised by the Group as an aspect of

lawyers’ practice which has changed significantly since the Code was first
adopted. As such, this was considered to be one of the primary aspects of the
Code pressing
for reform.

There were different opinions within the Group during the

discussions. On the other hand, many developments in the lawyers’personal
publicity have occurred since the CCBE Code was adopted. A great
number of European firms market their services by different means
(brochures, internet webs advertising, etc) without reaction (or a very few
reactions) from the member organisations. On the other hand, in
several countries the competition authorities have in the recent years
ordered a deletion of bans against
43
advertising in many member organisations . Nevertheless, as with other
aspects of the Code, the CCBE and the Working Group considered it prudent not
to force lawyers into a situation in which they may find themselves in conflict with
national regulations. Accordingly, stress was placed on regulating publicity where
it already takes place rather than allowing it or not as the case may be.

In view of this, the Working Group considered an alternative to its proposal

to Art. 2.6.1, so that it would read: “ A lawyer is, where advertising and personal
publicity is permitted [emphasis added], entitled to inform.... ”. This would
have had the effect that the proposed new rule would have been
applicable only in those Member States where publicity is not prohibited.

42
On 11th March 1997 the German Federal Bar Association passed its new code
of conduct by the narrowest of margins: 41 to 40.
74
43
In Ireland the ban on barristers’ advertising was investigated by the Fair Trade
Commission in 1989. In Spain several rules of the Lawyers’ Statute were also
challenged by the competition authorities.

75
 It was suggested by the Group that any revision to Art. 2.6.1 should
objectively set out the guidelines in a way that serves a legitimate public interest.
Part of the public interest is served by the dissemination of information as to
the lawyer’s speciality, if any - but how does one define what a specialist
is?-. Authorisation for lawyers to manifest themselves as specialists is a difficul t
issue since this requires setting up the standard as to what level of
knowledge is required to state a speciality in a particular field and a body
to authorise such
44
declaration so that the public interest is protected.

The proposal of a new and relatively different art. 2.6 compared with the
previous one, attracted many comments and objections. The Law Society
of Scotland and Wales, i.a., questioned the meaning of “objective” (did it
mean “unbiased”, “true”, “verifiable”?). The Italian delegation,
deemed 2.6.1 acceptable but deemed 2.6.2 and 2.6.3 unacceptable. The
Danish delegation deemed “inappropriate to demand that information from
the lawyer serves a legitimate public interest (… ) and that modern marketing
efforts on the part of lawyers should not be hampered by the said
demand”. Other delegations suggested changes in the wording.

After discussions, the Working Group proposed that art. 2.6 should read
as follows:

2.6.1 “Alternative A:

A lawyer is entitled to inform the public about his services provided the
information is objective and serves a legitimate interest”.

Alternative B:

A lawyer is, where advertising and personal publicity is permitted,

entitled to inform the public about his services provided the information is
objective and serves a legitimate interest”.

2.6.2 “Advertising or personal publicity in any form in the press,

radio, television or other media is permitted only to the extent it complies
with the requirements of 2.6.1”.

The previous proposal for Art. 2.6.3 was deleted.

The final wording of Art. 2.6 as approved by the CCBE Plenary Session
th
held in Lyons on 28 November 1998 reads as follows:

“2.6 Personal publicity:

44
In Belgium, for example, a lawyer is not entitled to describe him or herself as
a specialist unless he or she is defined as such in the national list of avocats.
However, this requirement is currently under review. In Germany, lawyers may
76
only describe
themselves as specialists in a maximum of five areas of law.

77
 2.6.1 A lawyer should not advertise or seek personal publicity where
this is not permitted.

In other cases a lawyer should only advertise or seek personal publicity to

the extent and in the manner permitted by the rules to which he is subject.

2.6.2 Advertising and personal publicity shall be regarded as taking

place where it is permitted, if the lawyer concerned shows that it was placed for
the purpose of reaching clients or potential clients located where
such advertising or personal publicity is permitted and its communication
elsewhere
is incidental.”

IX. Proposal for EC Directive 84/450 Regarding Misleading And

Comparative Publicit y.

In a green paper of 1992, the European Commission expressed

its interest in reviewing its policy in the field of commercial communications
and in advertising, modifying EC Directive 84/450 regarding misleading
advertising. The liberal professions were otherwise able to carry out
these forms of commercial communications based on Article 10 of the
Convention on Human Rights (freedom of expression).

In accordance with the proposal, the liberal professions remained

exempt from prohibition on comparative advertising only if a total ban on
advertising existed in their jurisdiction, so that if some form of advertising were
allowed, comparative advertising had also to be authorised. Hence,
for example, English solicitors were subject to comparative advertising by
the simple fact that advertising is allowed in that country.

Following the intervention of the various professional organisations, the

text was modified such that for professional services comparative advertising is
not lawful when it conflicts with the established rules of conduct of a profession
in the exercise of its self-regulatory powers provided for in the general set of
rules, as is the case in the legal profession (Art. 3(g)).

X. Advertising on the Internet

The Internet symbolises the information age. It can handle and

disseminate information and make available means of communication like no
other resource has previously been able to do. It poses, however, a variety of
legal problems for the economy as a whole and indeed for the legal profession.
45
As such, the Internet can pose questions for the conduct of the profession .
Given the notable differences in the various jurisdictions’ approaches to
the advertising of legal services, it is of little surprise that Internet advertising
poses problems. Whilst all jurisdictions and particularly European
jurisdictions have

78
45
Ramón Mullerat, “Practising International Law in the Age of the World Wide Web”,
presented to the XLI UIA Congress, Philadelphia, 6th September 1997.

79
restrictions on the advertising of legal services, there are46 few examples of
regulations specifically concerning advertising on the Internet .

One example of this is in relation to the wording of Art. 2.6.2 of

47
the CCBE Code . If a lawyer who is permitted to advertise in his own
Member State does so by means of the Internet, whilst such advertising
may be in compliance with the regulations in that State, its communication in
states where
publicity is not permitted could hardly be considered “....incidental.”Thus, that
lawyer could find himself in breach of the Code or otherwise disadvantaged in
being unable to use all the resources at his disposal.

This is a particular aspect of personal publicity and conduct generally

which demands regulation on a global scale. The very omnipresent nature of
the Internet renders regulation on a national level to be of limited
benefit. Inevitably, litigation has already got underway in the USA,
48
although not in relation to lawyers’ professional ethics and a great deal
more is certain to follow.

Personal publicity is an issue which needs to be regulated in a balanced

way, ensuring that information is made available to the public whilst at
the same time not adversely affecting consumer rights or the excellent mission
and the image of the profession. To do so would be to enable lawyers to
practise in the modern world and to meet the demands of today’s clients
without loss to the unique nature of the lawyer’s calling in the community in
the administration
of justice.

XI. The Recent Approach of a Local European Bar Association: the Col.legi
d’Advocats de Barcelona

The Spanish approach to lawyers’advertising has substantially changed

in the last three years. The liberalisation of advertising has caused its
regulation since several restrictions apply to the advertising rights.

One of the milestones in this liberalisation process was the 1997

Act liberalising the professional bars or associations (not only those of
lawyers). The result was the regulation of lawyers’advertising by (i) the
49
general national rules of illegal competition and advertising ; (ii) the
deontology rules and (iii) the Advertising Regulations as approved by the
lawyers’bars.

46
There is now also a resolution of the Bar Association of Barcelona on Web
sites which makes them subject to prior notification or authorisation by the Bar.
47
Supra, iv.
48
In the case of Inset Systems v. Instruction Set Inc. 1996 U.S. Dist. Lexis 160 (D. Ct.
April 17, 1996) it was held that a company advertising via the Internet in the state of
Conneticut was soliciting business in such a way as to confer jurisdiction on the courts
80
of that state, even though it did not have any offices or employees or regularly conduct
business there.
49
Ley de Competencia Desleal y Ley General de Publicidad

81
 On 22 December 1998, the Barcelona Bar Association approved a new
Advertising Regulation applicable to all lawyer members of said Bar. The main
features of this Advertising Regulation are the following:

1. The Regulation also applies to those lawyers members of the Bar

making advertising in areas outside the area of responsibility of the Bar
addressed to promote the provision of services within said area of
responsibility.

2. Lawyers’advertising is licit unless expressly prohibited.

3. Lawyers’advertising will have to be objective, truthful and appropriate,

both in its substance and in the media used.

4. Advertising against the competition and advertising general regulations

is deemed illicit:

• When it is contrary to the dignity of persons or Constitutional values or

rights;
• When it is misleading;
• When it is unfair.

5. Advertising against the deontology rules is deemed illicit:

• When violating the professional secrecy obligations;

• When including the promise to obtain a result whenever said result
does not only depend upon the lawyer;
• When mentioning clients or professional cases without the
authorisation of the client;
• When directly addressed to accidents’ victims, their relatives or
persons involved in legal proceedings or of a similar nature;
• When comparative with other lawyers;
• When the contents are ideological or self-praise;
• When violating the deontological rules.

6. Lawyers may file consultations on legality of advertising with the

Advertising Committee.

7. The Bar creates an Advertising Committee for the purpose of

controlling lawyers’advertising.

8. Lawyers may, prior to approval of the Bar’s Governing Body, use

institutional logotypes and slogans.

9. Sanctions for breaching advertising regulations shall be regulated

by the Bar By-Laws. Infringement of the rules are divided in non-serious,
serious and very serious. The sanctions depend upon the
seriousness of the infringement.

82
83
The publicity of legal services and its different forms
Mr Stephen RAYNER
Solicitor, Rayner De Wolfe, London, England

This paper might very well be entitled “The English experience – from one
extreme to another”.

Since I started in legal practice – many years ago – there has been a revolution
in the relationship between the lawyer and his client so far as concerns
publicity and openness. Matters such a confidentiality and trust still
remain unchanged and as strong as ever. But the way in which the lawyer is
able to promote his services and the information that must now be given to
the client has changed totally. We were once a mediaeval guild with its
mysteries and monopolies, and it was unethical – and unfair competition! –
to advertise that you were a lawyer and where you practised.

1. Introduction

1.1. This account focuses on the experience of one legal profession - the
profession of solicitors of England and Wales.

1.2. As to the subject matter, the focus is on the deontological aspects of

lawyers’ publicity, and particularly advertising, and the shift in
professional opinion as to the ethical status of lawyers' publicity.

1.3. The conclusions will be seen by some as uncontroversial to the point of

being obvious - but by others as debatable or regrettable. These conclusions
are:

(i) that advertising and other forms of publicity should now be seen
not only as permissable for lawyers, but beneficial to the individual lawyers or
firms concerned, to their profession as a whole, and to the public;

(ii) that once you have decided to permit advertising and other forms
of publicity, there is little point in having detailed rules permitting certain types
of advertising but not others - we should learn the lesson of King
Canute, a wise monarch who ruled over both Scandinavia and England, and
who set his throne by the sea shore to demonstrate to his courtiers that,
however powerful they might proclaim him to be, he could not hold back the
waves of the sea.

2. The pre-history of publicity

2.1. The Law Society, which is the professional body representing solicitors
of England and Wales, first obtained a statutory right to make practice rules in
1933. The very first practice rule, issued in 1934, was the so-called "anti-
touting rule", which prohibited solicitors from:

(i) seeking (or inviting) instructions;

84
 (ii) touting for business;
(iii) advertising; and
(iv) unfairly attracting business.

2.2. The importance of this rule in the scheme of things can be shown by the
fact that the anti-touting rule remained in existence, and
indeed remained as Practice Rule 1, through various amendments
and re- formulations for more than half a century - in fact until 1987,
when it was replaced by a new Practice Rule 1 which set out the
general ethical duties of a solicitor.

2.3. But even before 1936, the anti-touting rule, which effectivel y banned all
publicity, was not new - it merely reduced to writing, and in a
form backed by statutory powers, an unwritten rule going back into the
mists
of the history of the profession.

2.4. It may also be noted that our sister profession - the profession
of barristers - also had similar unwritten rules. These
were visualised in somewhat different terms, because barristers,
historically, were never instructed directly by lay-clients, but only
indirectly through solicitors (or "attorneys"), who instructed barristers to
give written opinions, to advise in conference, to draft difficul t documents,
or to appear in court. Thus the barristers' anti-publicity rules were
directed against inviting instructions from solicitors (or "attorneys"). Thus
Dicey, a barrister and constitutional expert wrote in the 19th century that all
the barristers' rules could be summed up in one law: "Thou shall not hug (ie
embrace) attorneys".

3. The range of publicity

3.1. The mention of "hugging" reminds us that there are many aspects of
publicity - for instance: advertisements in the public press;
combined advertisements with other businesses
or professions; advertisements appearing in the promotional
material of other businesses or professions; advertisements on the
lawyer's premises - whether a small brass plate or a large display;
advertisements on lawyers' own promotional material - pens, paperweights,
calendars or t-shirts; poster advertisements on hoardings or on the side of
buses; brochures produced by the lawyer; directory entries;
advertisements inserted into directories; headed notepaper; other
stationery, such as business cards or Christmas cards; direct mailshots;
direct mail targeted to an individual or individuals; sites on the
Internet; television broadcasts; radio broadcasts; advertisements projected in
cinemas or theatres; illuminated advertisements; advertisements in flashing
lights, whether on the lawyer's premises or in a hospital waiting room; leaflets
left at an estate agents,
a public library or elsewhere; press releases; advertising features in the public
press; sponsorship of sporting, artistic, charitable, political or social
events; participation in "beauty parades"; appearance of the lawyer's
85
name on documents or advertisements produced for the benefit of the
client; press releases about the client's business mentioning the lawyer;
statements in the media about the client's cases; general comments in the
media about current legal matters; participation in advice columns in
newspapers or advice

86
programmes on the radio; supply of information to compilers of directories and
other publications, sometimes including mention of the lawyer's clients; the
giving of seminars to potential clients; participation in academic life; the writing
of legal textbooks; the writing of popular books about the law or about cases in
court; socialising on the golf course or at the pub; conducting sessions
at a local advice centre; sitting on a stall at an exhibition; attending Rotary
lunches; giving presents to your clients or their representatives - a crate
of wine to a company director, a cheap radio to a remand prisoner;
telephone canvassing;
or boldly knocking on people's doors - the list is endless.

3.2. If we look at all possible types of publicity, it can be seen that it

is impossible to prohibit everything. Every lawyer must have at least a
brass plate outside his or her office, and every lawyer (with the possible
exception of barristers, who do not conduct clients' paperwork) must at least
have headed notepaper. And every lawyer is entitled to a social life of some
sort.

3.3. Equally, I have not heard of any lawyer who would allow
absolutely unrestricted publicity - few would want lawyers knocking uninvited
on people's doors, and fewer still would allow lawyers to tell lies in their
advertising The trick is to draw lines in the right place. But this is not easy,
even in principle, let alone in practice.

4. The old regime

4.1. Looking specifically at advertising, the stringent line taken

historically by the Law Society against solicitors' advertising is shown by some
quotations from The Guide to the Professional Conduct and Etiquette
of Solicitors published by the Law Society as recently as 1960. This is
what Sir Thomas Lund, then Secretary of the Law Society, wrote in 1960
about advertising on a solicitor's name plate and office windows:

"I think there has been a great relaxation in what used to be the very
strict view on what constituted advertising...What may be put on a name-plate?
The answer is your degrees, legal or otherwise, and your qualifications properly
so-called, including, if you like, your honours qualification or the fact that you
are a chartered accountant or chartered secretary; but not an alleged specialist
qualification such as, for example, "Legal Consultant in Town & Country
planning and Public Administration". That is objectionable on your plate.
It may be true, but you must not say so... It has been held that there
is no objection to including the words "if absent, please telephone such and
such a number"... But that information must be limited and it is objectionable
to put up
a plate with an arrow or hand pointing marked "3 doors down" or "first turning
on the left"... The object of your plate after all is to indicate to your clients when
they come down the street that is where you are to be found; and it is
not intended to be a general direction to the public to find your office
wherever it may be... There is no professional objection to your displaying in
your office a formal notice of modest proportions, stating that you are a
member of the Legal Advice Panel... However, this information should not be
87
included in your letter heading nor on a name plate displayed outside your
office. The size and
design of the plate or of the lettering on your windows is really a matter of taste
for you to decide, although it has been held to be quite improper to put the firm

88
name and the description "solicitors and commissioners for oaths" in gold
letters about a foot high right across the width of the building. As I have said,
the object is to enable your client to find your office and not that the
whole populace should be able to see it from the other end of town."

5. Human Rights and the Consumer

5.1. The United States Supreme Court decisions. A combination of certain

human rights – freedom of expression as contained in the United States
Constitution – and the elevation of the consumer to supreme status has
changed the old regime.

5.2. In 1977 the US Supreme Court overturned a decision of the courts of

Arizona, and decided that lawyers could advertise through printed material by
virtue of the First Amendment of the US Constitution (Bates v Bar of Arizona).

In 1978 two further decisions of the US Supreme Court broadened the

scope for lawyers’advertising (Ohralik v Ohio State Bar and In re Primus).

In 1988 the US Supreme Court removed the last restraint on lawyers

advertising and allowed targeted direct mailing, provided that it was not false,
deceptive or misleading (Shapero v Kentucky Bar).

5.3 At this time Margaret Thatcher was Prime Minister in England, and
pursued a policy that favoured the consumer over most other considerations –
a policy which incidentally the Czech Prime Minister admired and attempted to
follow against professions in his country, but less successfully.

The policy was this. For lawyers not to advertise meant that the client
was not aware of who was available and the range of services available, and
the absence of advertising meant that there was no competition,
and competition meant lower fees/prices – and lower fees meant everything,
even if the result was that standards may fall.

So it was that the legal professions in England and Wales changed the
centuries old rules and attitudes.

6. The rights and wrongs of lawyers' advertising

6.1 The development of such stringent rules against lawyers' advertising

seems to have stemmed from two motives:

(i) To demarcate the professional from the businessman - this can be

seen either in a positive or negative light:

(a) negatively, it can be seen as a species of snobbery,

a determination to buttress the social pretensions of the professional as being
a "gentleman" - a cut above mere tradesman.

89
 (b) positively, the same impulse may be seen as attempting to
buttress the image, and the reality, of the lawyer as an independent and
honourable professional, who puts his own clients interests before his own.

(ii) It was also, no doubt, an attempt to limit competition between lawyers.

Once again, this may be seen in a negative and a positive light:

(a) negatively, it may appear from outside the profession as little

more than a conspiracy to ensure that competition did not drive down fees;

(b) positively, it may once again be seen as stemming from a

concern that competition might lead to a compromising of the ideal, and reality,
of the independent and honourable professional.

6.2 Solicitors in England and Wales were first permitted to advertise in

1984. We believe that English and Welsh solicitors have, for good or ill, led
Europe in this respect. We believe (but we are open to correction) that
our relaxation in the rules preceded that of other legal professions in the
United Kingdom, the other Commonwealth jurisdictions and continental Europe.

6.3 The philosophical attack on the advertising ban, seen from world
perspective, seems to have come from two completely different
intellectual standpoints:

(i) in England and Wales, the rest of the Commonwealth and the
rest of Europe, the advertising ban came under pressure as a result of
the advance of the ideology of competition and the free market, and the
growth of the consumers' movement.

(ii) in the United States of America, the advertising ban came

under pressure on political grounds - as an infringement of the right to freedom
of expression in a democratic society, and the Supreme Court made a number
of important rulings along these lines.

6.4 The view of the Law Society, if it may be said to have a view,
has changed radically from its almost unquestioning support of the ban as late
as
1983. It appears to have been Austin Mitchell's private member's Bill in that
year, which threatened to eliminate solicitors' conveyancing monopoly,
which swung the opinion of the Council of the Law Society against the
outright ban. Practice Rule 1 was amended in 1984 to permit certain types of
advertising - although the rule was that all advertising was prima facie
banned unless specifically permitted.

6.5 If the Law Society may be said to have an official view now, it would be
very different indeed from the previous negative attitude towards
advertising. Indeed, advertising is now seen as being positively beneficial in
a number of respects:

(i) it brings the profession and the services that the

profession offers to the notice of the public, and to a wider section of the public
90
than would hitherto have been aware of these services;

91
 (ii) in particular it allows solicitors to offer novel or unusual
services, or services which may be urgently needed in a particular situation -
for example, a disastrous accident, or proposals for the building of a new road;

(iii) it can make the profession seem more approachable in the

eyes of the public, including potential clients;

(iv) it provides fairness for new entrants to the profession or to a

geographical area by allowing them to offer services overtly to the public;

(v) it may even, some say, enhance the quality of services -

lawyers who expose themselves to the public gaze in this way are "putting their
necks on the line". They have an image to live up to.

6.6 That is not to say that the whole profession willingly embraces the idea
of advertising. Both in England and Wales and in the United States
many lawyers look back with regret on the old days when, they feel, the
profession was more professional and was less business orientated.

6.7 What is more, many solicitors believe that advertising has been
responsible for the rapid drop in conveyancing fees, which has caused a crisis
in the profession. This may not be entirely accurate, but it is not too far from
the truth. The end of scale fees in 1972 meant the end of the old Practice Rule
2 which prohibited solicitors from undercutting the fee scales by letting it
be known that they would work for less. By the time advertising was
introduced solicitors were already in the habit of giving sharply competitive
quotations for conveyancing over the telephone, and consumers had
begun to acquire the habit of telephoning a number of solicitors in order to
obtain the lowest possible quotation. Even without the relaxation in the
advertising, this competition in the conveyancing market would have brought
conveyancing fees down. However,
it seems unarguable that advertising has hastened and intensified this process.

7. The Law Society's first tentative steps towards solicitors'

advertising

7.1 To go back to 1984, when advertising was first permitted, it is perhaps

ironic that the very caution shown by the Law Society when first
permitting advertising may even have intensified price competition.
Solicitors were prohibited from advertising the quality of their
services, as this was seen to be contentious - and perhaps unfair to
their more established competitors! Solicitors could scarcely, however, be
prohibited from advertising their fees, as this was seen as a field where the
advertising would be objective. Therefore, much early advertising
concentrated entirely on fees, which was permitted, to the exclusion of any
advertising of quality, specialisation or special expertise which was still
forbidden.

7.2 The first advertising "guidance" (so-called) was issued under a revised
version of Practice Rule 1. The "guidance" allowed advertising in the
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press and on radio - but not on television.

93
7.3 It allowed direct mailing to clients, former clients, enquirers and
professional connections only - but not to the public who might potentially be
clients.

7.4 It allowed advertising in directories and other publications, but only if they
were open to the whole profession, and did not select their entry. In the case
of "publications" with limited space - such as special covers for telephone
directories
- if the opportunity was offered to the whole local legal profession on a "first come
first served" basis.

7.5 Advertising on the solicitor's premises was freed up, with no

more problems of the size of lettering (provided there were no flashing signs)
- but not on anyone else's premises. No distribution of pencils,
paperweights or calendars, no t-shirts, no posters on hoardings or on the side
of buses.

7.6 No statement could be made about the quality of work, the quantity of
work, names of clients, fee income, past cases or success rate.

7.7 No joint advertising whatsoever was permitted with non-solicitors.

7.8 This compromise pleased nobody, and led to large numbers

of complaints by firms who believed their competitors were breaching
the "guidance".

7.9 Alleged breaches of the anti-touting rule regularly came before

the Solicitors' Disciplinary Tribunal right up to the issuing of the
"advertising guidance" in 1984 (including proceedings against solicitors
who "jumped the gun" and advertised after the "guidance" was issued but
before it came into effect). But after the "guidance" came into effect
it should be noted that, despite the number of complaints, alleged advertising
breaches gradually came
to be treated as not sufficiently serious to warrant Tribunal proceedings (apart
from a particular instance of the misleading advertising of investment services).

7.10 It should also be noted that virtually 100% of complaints came

from other solicitors, not from the general public, nor from clients.

8. Further relaxation of the rules

8.1 The tensions created by the half-way house of the original advertising
guidance made further change almost inevitable. In 1987 the Solicitors'
Publicity Code provided a thorough-going reform, based on a completely new
practice rule which prima facie permitted all publicity unless it was specifically
prohibited - the exact reverse of the 1984 provisions. (Similar to the first edicts
of Gorbachev! – everything is now permitted unless specifically prohibited).

8.2 Solicitors can now advertise the quality of their services, and
even claims to be specialists or experts. Clients can be named -
with their permission.
94
8.3 Advertising on television is permitted, as is in any other medium,
including posters on hoardings, on the side of buses, and, at last, pens,
paperweights, calendars and t- shirts.

8.4 Even flashing lights are now permitted.

8.5 Adverts can now appear in any directory, or any other publication.

8.6 Joint advertising with non-solicitors is permitted.

8.7 Perhaps most radical of all, direct mail is now permitted, distributed to
the public in general, and even to selected groups of persons, and even
to particular potential clients.

8.8 These changes have been brought about by the logic of advertising - it
was felt to be inappropriate to allow advertising but to tie advertisers'
hands behind their backs.

8.9 The only significant prohibitions left are making personal visits or
telephone calls to potential clients without an invitation.

8.10 It is also still prohibited to make comparisons of services or

charges with those of other identifiable solicitors, and to advertise one's success
rate.

8.11 Advertising which is misleading is still prohibited - and surely it is right

that this is so.

8.12 Advertising does not have to be in good taste, but it must not be in bad
taste. This is a difficul t area, and very subjective.

8.13 There are continuing tensions in the area of taste - one suspects that
some lawyers regard humorous adverts as being ipso facto in bad taste. Many
lawyers have problems with effective advertising - for a lawyer's advert to be
successful with the public makes it very likely that it will be considered to be in
bad taste by many members of the profession.

8.14 This applies to corporate advertising on behalf of the legal profession

as much as it applies to the adverts of individual lawyers or firms. There have
been sad stories of corporate advertising campaigns, both by the Law Society
of England and Wales and by the Law Society of Scotland, both of which were
highly rated by the advertising industry and by the public, and both of which
were damned by the professions and their respective professional bodies.

9. International sensitivities

9.1 It is interesting that advertising is such a sensitive issue internationally

that the Solicitors' Publicity Code contains special provisions to require
that advertising conducted outside England and Wales has to comply
both with domestic restrictions and those in force in the local jurisdiction.

95
9.2 And yet in England and Wales these issues are now seen as being
relatively unimportant - indeed, the Publicity Code itself suggests
that complaints about advertisements should in the first instance be taken up
with local law societies, which in England and Wales have no disciplinary
powers at all.

9.3 Internet web sites may make it difficult to control coverage. But control
by the host bar would be possible where the web site owner has an office or
other establishment in the territory of the host bar.

9.4 However the EU draft directive on legal aspects of e-commerce

would allow lawyers to advertise and provide their services over the Internet.
There has been a debate as to whether lawyers who do so should comply with
the rules of conduct of their home bar or of the place where the consumer of
their services is based (i.e. rules of the host bar).

9.5 Both the EU Commission and the EU Parliament have surprisingly

supported the home bar rule, so that lawyers would then only have to comply
with one set of Internet rules, and this (it is believed) would help the growth of
e-commerce. Thus an English solicitor established in the UK would be able to
advertise and provide services over the Internet to potential clients in the EU,
provided he complied with his own English rules, even though the
potential client was in, say, Luxembourg where such advertising may not be
permitted. Conversely, the Luxembourg lawyer could not advertise in the same
way even though he aimed at potential clients in Member States which allows
its lawyers
to advertise in this way. These are problems that will not be easy to solve, but
which lawyers throughout Europe will have to face very soon to meet
the challenge of the electronic era.

96
97
The Client´s Funds
Mr Ladislav KRYM
Lawyer, Czech Republic

1) Introduction

In speaking of client´s funds, we speak of money (or any other

valuables) with which the lawyer comes into contact, moreover about money
which is not his own.

There is no doubt that all lawyers in their profession of providing legal

services come into contact, in one way or another, with the monetary funds of
their clients. This always arises when the lawyer receives money from the client
for covering the cost of his legal services, or his fee. If this concerns covering
the real cost for services actually rendered, then this process will not cause any
problems and it needs no special attention. Cases which are perhaps
worth mentioning are when the client makes an advance payment for his
lawyer´s services and when the lawyer has possession of his client´s
funds at his disposal for a certain period of time, while the billing of
remuneration and settlement of an advance with the client comes about
at varying dates of receipt of an advance.

Lawyers also come into contact with client´s funds in cases when they
are entrusted with funds for the client or a third party in connection with
the provision of legal services. Such funds may be determined for a
court´s acknowledged reimbursement of the costs of proceedings, they may be
placed on deposit accounts for the purpose of reimbursement of
obligations as stipulated by the law or a court (alimony, indemnity, pension
provision) or later reimbursement in connection with civil law proceedings
in which a certain settlement is to take place between the participants
(an agreement between heirs, settlement of marital partnership property) etc.

Lawyers also receive client’s funds in connection with transactions of

a commercial nature and receive authority to dispose of the client´s
funds deposited on accounts other than the lawyer´s accounts, e.g.
with the management of a client´s property.

The lawyer may not, of course, handle funds entrusted to him by his
client according to his own judgement, unless authorised to do so. He
must proceed in line with certain rules which are set by the rule of law
and professional regulations of national or regional Bar Associations
and international organisations of lawyers and legal communities.

It is therefore important to deal with the existence of rules regulating

the relation of the lawyer to the client´s funds, its adequacy and respect,
whether he is providing the client a sufficient guarantee for funds and is
in compliance also from the aspect of public interest. In today´s complex
world when the movement of capital goes beyond the borders of
individual states,
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 there arises to an ever greater extent the phenomenon called "money
laundering" encompassing all techniques used to cover the origin of
illegally acquired and possessed money and their transformation to an
apparently legal income. Actual money laundering is not just performed
via credit and other financial institutions, investment companies and
various funds, but other professions are also misused for this purpose,
including the legal profession. Those who launder money rely, above all,
on lawyers for their professional obligation of confidentiality as laid down
by the law. Even though there is a separate block in this seminar devoted
to money laundering, we must also at least mention the problems stated in
several points.

The subject is divided into three areas of problems.

1. ascertaining the origin of the client´s funds

2. retention of the client´s funds (accounts)
3. refund/repayment of the client´s funds

Let us firstly attempt to generally map the situation in the European

Union and the Czech Republic, and then to outline the problems.

2) The rules in the European Union

Several documents concerning the relation of lawyers to client´s funds

were accepted within the European Union. I presume that our co-speaker, Mr
le Batonnier Alain de la Bretesche, will talk about these documents in a much
more informed manner. Nevertheless, allow me to recall one of the most
important documents which is the Code of Conduct of Lawyers of the European
Communities passed on October 28 1988 at the plenary session of the Council
of Lawyers and Legal Communities of the European Union (CCBE).

This Code was adopted by a resolution of the Board of the Czech Bar
Association on March 11, 1992 and came into effect from June 1, 1992 as the
rules for the foreign activities of lawyers from the Czech Republic in relation to
the countries of the European Union. Later, on October 31, 1996 the rules of
professional ethics and competition rules of lawyers of the Czech Republic
were adopted by the Board of the Czech Bar Association. Their Section 2, (2),
by defining the actual scope of jurisdiction of the Rules stipulates that,
regarding the international activity of a lawyer within the European
Communities, the Rules are applicable in a subsidiary manner to the Code of
Conduct of Lawyers of the European Communities.

Section 3.8 of the Code called Client Funds, stipulates in particular:

If a lawyer was entrusted whenever during the course of his practice

with the funds for his client or a third party (hereinafter the "Client Funds"), it is
essential that

3.8.1.1 the Client Funds be managed through an account at a bank or

similar institution and be controlled by a public institution and that all the Client
Funds obtained by the lawyer be transferred to such an account unless
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the client gives expressed or silent consent to other use of such funds;

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 3.8.1.2 all accounts in the lawyer´s name on which the Client Funds
was deposited, are marked in the manner by which it is obvious that this
concerns Client Funds;

3.8.1.3 the balance on the accounts on which the Client Funds

is managed, was never lower than the total of the Client Funds managed by
the lawyer in question;

3.8.1.4 should the relevant clients request this or should the terms and
conditions approved by the client be fulfilled, all the Client Funds may be paid
out to the clients;

3.8.1.5 payments were prohibited from the Client Funds to third parties
on behalf of the client including:

a) payments to the client or for the client from the Client Funds
managed for another client and

b) payments for the lawyer´s fee but with the exception of cases
permitted by law or performed on the basis of the expressed or
indicated consent of the client;

3.8.1.6 the lawyer is obliged to keep complete and precise records of

all instructions concerning the handling of Client Funds which will make a clear
distinction between Client Funds and other funds which he holds, and that such
records be made available, upon request, to each one of the clients.

3.8.1.7 the relevant institutions in all EC member countries have

the right to confidentially examine and investigate records on a lawyer´s
Client Funds, ascertain whether the stipulated rules are observed and
impose sanctions on lawyers who infringe them.

The handling of Client Funds is also undoubtedly subject to the

standpoint adopted at the plenary session of the CCBE on November 14 and
15, 1997 concerning the lawyer´s professional secrecy and money laundering.
The next block of the seminar will not doubt deal with this standpoint devoted to
the subject of money laundering. For our purpose it must be stressed that the
efforts of the CCBE to persuade member organisations to unify
their standpoints and include in their ethical codes the pledge that in
each case entrusted to him, the lawyer must ascertain the identity of the client
or a person for whom the client works. Should the lawyer be asked to handle
money, he is prohibited from accepting or handling such funds which do not
directly relate to the file marked by the specific name of the client. Finally, the
lawyer is obliged
to withdraw from legal transactions if he has serious suspicion that the planned
transaction will result in money laundering and the client is not prepared
to refrain from such a transaction.

101
3) The situation in the Czech Republic

The rule stipulated under Section 9 (2) of the Rules of

Professional Ethics and Competition Rules of Lawyers in the Czech
Republic of 1996 directly applies to Client Funds in the Czech Republic which
lays down that:

The lawyer is obliged to guard, with the care of a proper manager, the
money and other valuables he has accepted for a specific purpose; he may not
use them for any other purpose than as specified. He is further obliged to pass
on any increase in the funds to the depositor unless agreed otherwise.

Some other more general provisions of Act No. 85/1996 Coll. on the
Legal Profession as amended by Act No. 210/1999 Coll. on Client Funds may
also be applied. For example, the Act lays down the lawyer´s obligation
to protect and enforce the rights and justified interests of the client and to
follow his instructions while performing his legal work honourably and
conscientiously. The lawyer is obliged to keep adequate documentation on the
legal services he provides. The lawyer is responsible to the client for any
damage he has caused
to him in connection with his legal work. It stipulates that the lawyer must have
liability insurance against damage caused through the provision of legal
services to the scope in which it may be reasonably assumed that such liability
may affect him.

In comparison with the rules adopted in the European Union, it is

evident that the Czech regulation is more general, more concise and can only
be used as a form of interpretation of many obligations of lawyers in relation to
their clients´ funds.

4) Relation of the lawyer to the client´s funds

1. Ascertaining the origin of the client´s funds

One must be aware that a lawyer is not an investigator, nor is he any

other authority charged to collect information on clients, their property and any
other of their affairs. He is not even adequately furnished to perform
such activity nor are there sufficient legal conditions created for him to
do this. Should a lawyer, in connection with the provision of legal services, be
entrusted with funds for his client or for a third party, the lawyer will follow
the handling instructions received with such funds.

However, this does not mean that the lawyer should not devote proper
attention to his client´s funds, particularly if this concerns the client´s
identity and the origin of his funds. In the last decade the fight against
money laundering has intensified not only in individual countries, but also
on an international scale. This can be proved by the series of documents
adopted within and outside the European Union. As has already been stated,
not only financial and management institutions, but lawyers are also misused
for money laundering. One of the preconditions for successful money
102
laundering is to conceal the identity of the person performing the money
laundering as well as conceal the actual origin of such money. Lawyers
may, in their own name,

103
 open a bank account, establish business companies, execute transfers of
share ownership and business shares in companies as well as
other transactions and the client will remain anonymous. They may
therefore knowingly or unknowingly become a link in the money laundering
process due
to the obligation of confidentiality as laid down by the law.

In November 1997 the CCBE adequately argued in favour of its

standpoint on the necessity to ascertain the identity of a client or at least the
person acting on his behalf. One cannot but fully agree with this
standpoint. The identity of a client is an important identification sign for the
records of his funds and instructions related therein. The lawyer approaches
the client in each case when, for some reason, problems arise in the fulfilment
of the purpose for which the client´s funds was designed. The lawyer must
provide the client with reports on the handling of his funds. Where the
law allows the relevant authorities to perform a search of a lawyer´s office
when investigating criminal activity, the lawyer´s identification will help to
separate specific affairs from other matters which are subject to the
lawyer´s professional obligation of confidentiality.

Ascertaining and verifying the origin of a client´s funds is not part of the
obligations of a lawyer laid down by law. Should lawyers receive funds
from clients in connection with regular affairs, such as settlement of heirs, parties
in civil law proceedings, etc., then this is not even considered a practical matter.
These affairs are usually transparent, they concern a specific case, usually
discussed through or reviewable by a court of law. However should a lawyer be
entrusted with funds in matters mainly of a commercial nature, the relation of
the lawyer to the client is no longer so straightforward. In some countries, the
obligation of a lawyer´s confidentiality is only respected in relation to facts
known to the lawyer from his activities in providing classical legal aid. If
this concerns activity typical mostly of other entities operating within the
commercial sphere, e.g. banks and property management boards, the
information acquired by lawyers is no longer fully protected. In some countries
it is even assumed that lawyers should, while observing the statutory
conditions, have the
obligation to notify authorities of certain illegal practices by their clients.

Their requirement of integrity cannot and may not allow lawyers

to commit any illegal acts or participate in any illegal activity of another
person. Lawyers cannot possibly be interested in being investigated and
having their offices searched thereby endangering their client´s trust due
to the illegal activities of others. Hence lawyers should be interested in
the origin of their client´s funds particularly in cases of transactions of a
commercial nature. They should also, in cases arousing even the slightest
suspicion, unclear cases or where the claim of the depositor cannot be
verified, demand a declaration from the depositor or the client on the fact that
the funds were not acquired illegally and the transaction with them will not be
used for any illegal activities, which is what some law firms actually do now
when in conjunction with depositing their client´s money.

Where the circumstances of a case indicate that a transaction is

104
to result in illegal action, the lawyer is obliged to discuss the matter with the
client and instruct him. In the event that the client does not intend to withdraw
from

105
the transaction, the lawyer will cancel the contract on the provision of legal
services and will proceed in accordance with what the law of his country lays
down.

The steps taken by the lawyer to ascertain the client´s identity and the
origin of his funds should discourage persons with dishonourable
intentions from using legal services in performing illegal transactions.

2. Retention of the client´s funds (accounts)

As long as national legal regulations on the handling of client funds are

based on the provisions contained in the CCBE Code and their observation by
lawyers is be enforced by sanctions, then it should not happen that the client or
the person to receive the money, will either not receive it promptly or not at all.

The key principle when handling client funds is the principle of using
these funds only for an agreed purpose. It is out of the question for a lawyer for
the time he has the funds in his possession, to use it without authorisation from
the client for his own person and this includes payment of fee receivables, or
for a person other than the client. The lawyer naturally guarantees the safety of
the client funds entrusted to him. He should therefore secure such funds
so that it is protected against loss or misuse. The way to ensure the safety of
such funds is undoubtedly to deposit it in a bank or a similar financial
institution. A good manager of funds which is not his own, should only choose
a good bank and deposit the client’s funds there so that he can then
distinguish it from his own money and the money of his other clients. The
lawyer’s records of client money and the handling instructions therein should
pose no problems for any successor to the lawyer’s work. The possibility of
controlling the records, the deposit and instruction accompanying the client’s
funds should all be ensured.

In individual countries of the European Union, the rules for

holding client’s funds are not conceived in the same way. The most
thoroughly compiled rules are undoubtedly those in France and partly also in
Belgium. I am sure our co-speaker Mr le Batonnier Alain de la Bretesche will
share with
us his experience with this system.

As has already been stated, the legal and professional regulations in

the Czech Republic regulate the lawyer’s handling of a client’s funds only
very generally. This, of course, causes all sorts of problems, as to a certain
extent, it
is only up to the lawyer and client and how they agree on the manner in which
the lawyer will receive funds from the client, how he will take care of it, handle
and settle it with the client. In view of the fact that the client comes to
the lawyer as to an expert, the lawyer is usually the one to set the
rules of the game. Should any problems arise, the only way to interpret such
a situation by the present regulations is to use the term "the care of a proper
manager". The inadequate legal and professional rules of which
lawyers at fault take advantage, where it is difficul t to distinguish one
client’s money from the money
106
of other clients and the lawyer’s own finances.

However lawyers also have problems even if they keep proper records
and take care of funds. Should a lawyer deposit money received for deposit on

107
his accounts of which, in accordance with the Accountancy Act, lawyers and
legal associations keep records within single-entry bookkeeping, financial
authorities administering taxes often consider the movement of this money as
the income and expenses of a lawyer for tax purposes. This would perhaps not
cause problems if the transaction of receiving funds for depositing and
the payment of funds from this deposit were executed during the course
of one calendar year. Lawyers must convince the financial/tax authorities
about other cases, which is not an easy task in view of the obligation of
confidentiality laid down by the law.

3) Refund/repayment of the client’s funds

The manner of depositing a client’s funds must allow its release for
payment upon request or within a reasonably agreed deadline.
Should payment be subject to terms and conditions, payment must
be made immediately, as soon as compliance with the terms and
conditions is documented. The lawyer must devote adequate attention to
everything, which affects payment of funds. Should payment be subject to
a legal or official decision, he must verify whether the decision is
legitimate, whether issued in favour of the person to whose benefit the
funds should be released. In the same way he examines the validity and
legal liability of private papers. He verifies the client´s instructions, which
were not made in writing or through personal contact, in a reasonable
manner.

A lawyer must be able, after completing a transaction with the client´s

funds, to provide a proper and full statement of the funds. Should only
part fulfilment of the funds occur with no other arrangements made, then
the remaining funds must be returned to the depositor.

Regulations according to which lawyers should be entitled to any

increase (interest) on deposits do not appear to be particularly suitable. This
may lead to delay in the release of funds on time which could finally damage
the client. The provision contained in the Rules of Conduct of Lawyers in the
Czech Republic according to which a lawyer is obliged to pay out any increase
to the depositor, unless agreed otherwise, appears to be correct.

Retaining client´s funds and not using it for the specified purpose
should only be made possible in altogether exceptional cases. Should funds be
destined for payment to the client, in case of his death, the lawyer should then
usually wait for the result of inheritance proceedings. Should such a
change occur in the original preconditions under which the funds was to be
used and should there be no other instructions, the lawyer must inform the
depositor or client of the situation that has arisen without any undue delay
and wait for his further instructions.

A special situation arises when a lawyer is reliably informed that

the funds deposited with him are to be used for illegal practices. In a
number of countries there exist legal regulations for such cases allowing
lawyers to perform certain actions. In the Czech Republic more serious
offences are described in the provisions of Section 167 (1) of the Penal
108
Act which then stipulate the recourse for not obstructing these offences.
Every person, as well

109
as the lawyer, holds the obligation to obstruct such offences if he receives
reliable information or evidence that others are preparing or committing such
an offence. Obstruction can come about in any suitable manner, also by
notifying an authority active in criminal proceedings. In any specific case,
an offence can certainly be obstructed if a lawyer does not use the client´s
funds for the purpose intended and retains it instead.

5) Conclusion

In conclusion I would like to express the wish that national regulations

governing lawyer´s relations to client´s funds should be brought as close
as possible to the provisions in the CCBE Code and to the standpoints
of the CCBE adopted in the following years.

It is good to know that wise people have come up with wise things. But
sometimes it is difficul t to absorb and apply such wisdom.

No doubt the new Board of the Czech Bar Association, which will be
elected at the assembly of lawyers in a few days, will discuss the
issues relating to client funds and will attempt to conceive new ethical rules
which will secure client´s money with effective protection and discourage
interested parties from misuse of lawyers´ services for illegal activity.

110
The client’s funds
Mr le Bâtonnier Alain DE LA BRETESCHE
Lawyer, Laval, France

I am delighted to be here in the magnificent city of Prague for this

multilateral seminar on the ethics of lawyers.

It is an opportunity for me to meet again a number of you who attended

the last seminar in Budapest.

The organisers of this seminar have done a sterling job in

bringing together representatives of what we used to call the Bars of Eastern
Europe and the Bars of Western Europe.

Indeed, it is in circumstances such as these that we have

the impression that we are together constructing the Europe of
today and tomorrow, that we are no longer in a situation where the master is
teaching the pupil about democracy, that in the European Court of Human
Rights judges from Eastern Europe are involved in the censuring of human
rights violations in Western Europe, and vice versa.

The theme I have been asked to present fits perfectly into this context
of dynamic interaction.

I have been asked to speak about clients’funds, and more specifically

to examine with you the three stages of the handling of other people’s money
by lawyers.

1. Verification of the origin of clients’funds,

2. Holding of clients’funds,
3. Payment from clients’funds.

Naturally, in the course of my presentation, I shall offer:

- not only examples of solutions from my own country, France, since it is

perhaps partly because of the very specific, if not to say unique system
adopted by our Bars, that I have been asked to be rapporteur
this afternoon,

- but also a few ideas of my own.

The first step, however, is to take a look at all the rules on this subject
which are to be found in Europe.

These rules have resulted from custom and the traditional

problems facing any professional person holding, for a time, the money of
others. They are also a response to one of the major issues of the day in
Europe, the fight

111
against organised financial crime, and more specifically the laundering of the
proceeds of this type of crime, especially drugs trafficking.

My own presentation will not go into this question in great detail since
one of my colleagues, John Fish, who is an expert on this subject, will
be talking to you a little later on the specific question of professional secrecy in
the fight against money laundering.

Nevertheless, I shall have occasion to touch on money laundering

when looking at the problem of client identification.

Accordingly, my presentation will first of all review the sources of

European law in this field. I shall then take up the three questions referred to
earlier, discussing them in the light of these sources and suggesting possible
technical solutions.

I. The sources of European law relating to the holding of funds

1. The Code of Conduct for Lawyers in the European Community

This Code of Conduct, adopted unanimously by the representatives of

the 12 Bars of the European Community in Strasbourg on 28 October 1988, is
now considered in the majority of EU countries and a large number of Council
of Europe member states, enjoying various types of relationship with the
CCBE, as the basic ethical reference for lawyers in Europe.

This Code deals with the problem of clients’ funds in Chapter 3,

“Relations with Clients”, and more particularly in paragraphs 3.8 et seq
“Clients’ funds”.

This document is appended to the text of my presentation.

It restates the conventional rules with which professionals holding

funds on behalf of a third party must comply.

2. Charter of the European Professional Associations in supporting the

fight against organised crime

Basically, the background to this document is as follows:

The Council of Ministers of the European Union on 28 April 1997

adopted an “action plan to combat organised crime”.

This plan was a follow up to Directive 91/308/EEC of 10 June 1991 on

the prevention of the use of the financial system for the purpose of
money laundering.

As part of this action plan, the Secretariat General of the

European Commission organised discussions between representatives of
various legal and accountancy professional service providers in Europe to
encourage them
112
to comply with a number of ethical rules regarding the reception and use of
funds and verification of their origin.

This Charter, also appended to the text of my presentation, was signed

by 5 people:

- the President of the CCBE;

- the President of the European Tax Confederation;
- the President of the Conférence des Notariats de l’Union
européenne;
- the representative of the President of the European Federation of
Accountants and Auditors for SMEs;
- the President of the Federation of European Accountants.

3. Statement adopted by the CCBE in Standing Committee on 2 July

1999

This declaration was quite unequivocal and I quote it here in full:

“The European Bars and Law Societies, with full knowledge of

the Charter signed by the professional associations
regarding the fight against money-laundering, declare that they
join in the fight against organised crime and against money-
laundering and emphasise that European Lawyers have
always been regulated by strict and rigorous rules which
prohibit them from participating directly or indirectly in money-
laundering and other criminal activities.

The Bars and Law Societies appreciate the effort made by

professional associations in a wide range of activities
which contribute to the fight against money-laundering and
organised crime.”

The sole aim was to make it clear that if the lawyers had signed the
Charter, this was primarily in order to show that they were contributing to the
fight against money laundering, given that law societies had for a long
time assumed responsibility for ensuring that their members acted
appropriately in this area, rather than to enter into any commitments for the
future.

The message was a straightforward one: you want to get a number of

people on board a train heading for the battle front in the fight against money
laundering: as passengers already travelling on this train, we have no objection
but as far as we are concerned, you are preaching to the converted.

4. Draft Directive amending the 1991 Directive on the prevention of the use of
the financial system for the purpose of money laundering

This draft directive, about which I shall say very little, is the concern of
my distinguished colleague John FISH insofar as it contains a series of
obligations for banking institutions to denounce their clients who are listed as
113
criminals or accomplices in a form of crime, whereas such denunciation
obligations may be contrary to our code of ethics.

5. National texts

Here, I am referring to all the codes of conduct already adopted in your

various countries and, of course, the laws which set out the penalties if they are
violated. It would, moreover, be of interest to have further information from you
presently on these codes of conduct with regard to this particular question.

With reference to these sources I shall now attempt to address the

specific issues raised by the organisers of this seminar.

II. Specific issues raised

II.1 Verification of the origin of clients’funds

There are three typical cases in which lawyers traditionally receive

funds from or for their clients:

- where lawyers, having initiated proceedings on behalf of their clients in

order to obtain damages from an opposing party (state,
public authorities, private companies or individuals), acquire a sum of
money, whether large or small, from that party either in application
of the court’s decision or further to an out-of-court settlement.

- where lawyers are in the converse situation, ie it is their clients

who could be required to pay a sum of money. In order to show good
faith and avoid more substantial interim measures affecting their
assets, such clients, as defendants, must offer or may even be
compelled to pay a sum of money as a deposit for the duration of the
proceedings.

- a corporate lawyer may also receive from a client the funds needed to
form the capital of a company which he or she wishes to set up in the
lawyer’s country or sums paid under the terms of a contract which
the lawyer has negotiated or drawn up for the client or as single drafter
for two separate clients on whose behalf he or she is acting.

In all three cases, lawyers have no difficulty in identifying their clients.

They know the person who sustained the damage for which
compensation is sought.

They know the person who caused the damage and will be required to
pay a deposit.

They know the management of the company they are setting up or the
representatives of the companies for which they have drafted a contract.
114
 They know the contents of the articles of association or contracts.

These are all typical cases which pose no problem.

At the other end of the scale is the situation which is almost a

caricature: all of you in this room have probably already received at least once
in your careers a letter on impressive headed notepaper or even just a fax from
a company based in Africa or sometimes South America asking you purely and
simply to take receipt of and hold on to funds, for which you would be most
handsomely paid.

You do not have to be very versed in the fight against

international crime to realise that in such a case it is rarely possible to identify
the person in question - it is, moreover, debatable whether he or she could
be regarded as your client.

Clearly, between these two extremes there are all sorts of intermediate
cases.

I was once in the following situation:

At the request of one of my insurance clients, I went to see a banker

for whom I acted as lawyer, accompanied by some people whom the client in
question knew but I did not. Beforehand, they had given me a file concerning
the setting up, with the help of the banker, of a company to bottle
mineral water.

The file seemed relatively well put together; the banker asked the
investors why they wanted a loan, and they gave the standard answer that they
wanted to strike a balance between their own funds, funds from the banker and
self-financing. The banker then asked where their own funds would
come from.

The investors replied that part of these funds would come from
a Luxembourg bank, but they refused to provide the name of the bank
straight away.

I myself had thought that the banker was being over-fussy and I
suggested that he sign the contract subject to the condition that the funds be
forthcoming on a certain date.

Thanks to my excellent relationship with the banker, I found out over

the next few weeks that he had had the matter investigated and that it
was clear that these people wishing to invest in my country actually
wanted to recycle money coming from South American drugs trafficking.

Clearly, despite the precautions I had taken, I had not adequately

identified the funds which, thank God, I had never received but which
could have been entrusted to me, to be brought along on the day of the
transaction.

115
 The Charter, signed for us by the President of the CCBE, obliges us to
proceed cautiously with this identification and to receive funds only from clients
who are genuine clients and whom we have fully identified.

However, we must not delude ourselves: we will continue to face

numerous difficulties in this area:

- first of all, we do not by a long chalk have the information

services which are available to banks and we cannot always
take our investigations very far;

- second, there are many countries where the banking system is

not sufficiently well developed, cash payments are common and
they cannot be prohibited on ethical grounds without penalising our
day-to- day clients who prefer to pay us in cash rather than by
other more elaborate means.

We are fully aware that certain mafia-type organisations have opened

gaming establishments in a number of countries which recycle large amounts
of cash, the origin of which is obviously very uncertain.

Our codes of conduct will have to incorporate the charter signed by the
CCBE and lay down a number of minimum rules on client identification.

This has not yet been done and the CCBE code does not yet contain
the necessary elements for rules of this kind.

Clearly, however, our Bars must do this work as a matter of urgency if

we do not wish to declare ourselves a kind of “open city”and subject ourselves
in all cases to inspections by the international financial police.

II.2 Holding of funds

The problem regarding the holding of funds is a more traditional one.

The Code of Conduct for Lawyers in the European Community addresses this
problem and lays down four rules:

a. funds must be held in a bank or accredited financial institution;

b. the account opened in the name of the lawyer should indicate in the
title or designation that the funds are held on behalf of a client;
c. the account should at all times contain a sum which is not less than the
total of the clients’funds held by the lawyer,
d. all clients’funds should be available for payment to clients on demand
or upon such conditions as the client may authorise.

The underlying idea is plain: lawyers may not use their clients’money;
at the very most they may obtain some form of payment from their bankers for
having chosen their bank and enabling it to use the funds under banks’normal
liquidity ratio conditions, but under no circumstances do lawyers have a liquidity
ratio; they must always be in a position to pay their clients on demand.
 If I may, I would like to take a little time to explain that the French Bar,
and to a certain extent the Belgian Bar, set up quite a number of years ago an
innovative system which they continue to recommend to other European Bars
since it enables lawyers to comply with the rules governing the holding of funds
as codified by the CCBE, but it also ensures that these rules are complied with
by the ethical authorities within the profession and thus helps avoid
external intervention in this field and, consequently, any resulting
violations of professional secrecy.

The French system used to have another advantage, namely the fact
that any revenue generated by the money deposited could be used by
the profession for the organisations representing it and the general-
interest functions it performs. This aspect of the French system is less
advantageous today since the lowering of interest rates in Europe has
considerably reduced the resources which the profession as a whole derives
from the system.

It works as follows: in each French Bar (you will be aware that

in France there is a Bar for each Regional Court) there is a
Barristers’Payments Fund entrusted to a single bank which opens a single
account for the Bar. The Chairman of the Bar is the signatory to this
account, but sub-accounts are opened for each barrister and each is
given authority by the Chairman to handle his or her own affairs.

This Fund has individual accounting for each file.

Under French law, this Fund is able to use the interest generated by
clients’funds to benefit the profession and the justice system generally.

This Payments Fund provides the same services as an individual

account opened by a barrister in a bank but, as a result of the facilities
available, accounting can be much more detailed, and thanks to
computerisation, the Chairman is able to find out virtually in real time if
a barrister is overdrawn.

In France we are very satisfied with this system which has been
in operation since 1972. There have never so far been any instances of a
lawyer making off with the takings (as has happened in other
professions), with the clients suffering the consequences.

I think it is also true that as a result of computerisation, the French Bar

is able to say - without any fear of contradiction by the authorities of the
European Commission - that this system enables the profession itself to
monitor the movements of suspicious funds more effectivel y than could
in practice be done by the public authorities in our various countries.

In fact, in this system it is to a certain extent the lawyers themselves

who monitor each other. This does not mean that in the large cities there will
never be any problems, but one can expect them to be significantly fewer in
number.
II.3 Payments:
 The CCBE’s Code of Conduct states that all payments from a client's
account to a third party are prohibited, including:

- payments made to or for one client from funds held for another client
- withdrawals to pay the lawyer’s fees.

An exception to this may be made if the client gives his or her express
or implied consent.

In essence, this means that you are not obliged to ask for the clients’
permission to hand over their own funds to them, but you must ask for
their permission in any other case to pay another person or yourself out
of those funds.

In the French Payments Fund system, we have further developed this

rule as follows:

The Payments Fund will make out a cheque to a third party or a lawyer
only if the client has given written permission. Consequently, the lawyer simply
has to sign a payment authorisation issued to him or her by the Fund under a
procedure which is not open to question.

This still leaves us with the problem of cash.

In the Payments Fund system, over the years, there have been
increasing limitations on cash payments.

Just as the Fund will not accept cash sums paid by clients to
the lawyer in excess of FRF 1,000 without explanation, it refuses in practically
all cases to make cash payments itself.

As I said earlier, this system clearly cannot be totally transposed, in the

present state of the economy, to all Council of Europe member states. It
should be realised, however, that transposition of the system is indeed possible
as regards payments since anyone who has received a cheque from his or her
lawyer can very easily be paid directly by a bank.

This in itself is something which will displease those engaged in

organised crime.

Conclusion

Alexandre Dumas said that “money is a good servant but a poor

master”.

As far as we lawyers are concerned, we do not acknowledge

any master and it is therefore important for us jointly to protect ourselves from
those who, insidiously, have sought to impose their economic power on us.
 Touching briefly on the serious topic we shall be looking at a little later,
here again we shall probably have to take matters in hand if we do not wish
others to do it for us.

Practice as a lawyer and the principles of the European Convention on

Human Rights

the problem of money laundering and confidentiality of this profession

the problem arising from organised crime and the ethics of this
profession

Mr Marian ANCZYK
Vice-President of the Polish Bar Association, Warsaw, Poland

th
As late as the beginning of the 20 century, organised crime in Europe
was limited in principle to a single country, Italy.

Freedom of movement is a great step forward in human rights,

unquestionably one of the fundamental freedoms, helping create a single
market and develop commercial exchanges between countries. The possibility
of travelling freely, easily crossing borders, moving to a country other
than one's own and engaging in an economic activity there are certainly
positive developments, but there are also drawbacks. The authors of the
European Convention on Human Rights were not always fully aware of
its adverse consequences or of the danger of large-scale rights abuse for
illegal personal enrichment, sometimes involving several nationalities and
so giving crime an international character.

Following the opening of borders to citizens from Eastern Europe,

in particular some countries of the former USSR, and as a result of corruption
and the disorganised economy of these new states, there are people
there who have illegally amassed fortunes and – more worryingly – made
contact with others of the same sort in Western Europe. At the same
time, the police in Europe have noted a growing number of score-settling
professional murders. This type of crime is increasing steadily, and new
international gangs that are appearing in other European countries constitute a
manifest danger to citizens and the rule of law.

For some time now, there has been a new element in this growth of
organised international crime – the Internet. The Internet is a huge information
provider, an unprecedented enhancement to people's lives. Liberal values and
liberalisation in every area are now computer-driven and the boundaries
between private and public interest are becoming blurred. In the
European Union and other countries of Europe, developments include
cybercrime, Internet supply of child pornography and illegal cybertrading
by fictitious companies. Combating all this calls for a national and
international effort to
curb misuse of the Internet (which, after all, is a very useful tool) and of
electronic commerce.

Those in charge of European society turned to joint policy on external

borders and international co-operation between police forces and between
criminal, civil and administrative justice systems to ensure effective protection
and enforce the law. Those were among the objectives of the
1997
Amsterdam Treaty, which dealt with the very sensitive issues of illegal
immigration and the rights of legal immigrants, refugees and
displaced persons. Intergovernmental co-operation on effectivel y combating
international forms of terrorism, organised crime, drug trafficking, fraud and
corruption has also been intensified.

On 15 August 1997 the European Union adopted an action plan to

combat organised crime, which was published in EEC Official Journal No.
C
251/1. Chapter 1 of the plan states that organised crime is increasingly
becoming a threat to society as we know it and want to preserve it.

"Crime is increasingly organising itself across national borders, taking

advantage of the free movement of goods, capital, services and persons.
Technological innovations such as the Internet and electronic banking turn out
to be extremely convenient vehicles either for committing crimes or for
transferring the resulting profits into seemingly licit activities. Fraud and
corruption take on massive proportions, defrauding citizens and civic
institutions alike."

Chapter 2, paragraph 12, of the plan, "Prevention of organised crime",

to which the European Commission refers in addressing the Council of the Bars
and Law Societies of the European Community (CCBE) on the part which
lawyers could play, states that measures to shield certain vulnerable
professions from influences of organised crime should be developed, for
instance through the adoption of codes of conduct. It advocates carrying out a
study, which would identify legislative and other measures to prevent notaries,
lawyers, accountants and auditors from being exploited by or getting drawn into
organised crime and to involve their professional organisations in establishing
and enforcing codes of conduct at the European level.

Paragraph 12 also notes that the CCBE is responsible for

implementing this recommendation.

Lawyers are aware of the danger which organised crime and

money laundering represent for life in society, but it is worth reflecting on
whether they can be involved in combating them and, if so, how.

The European Convention on Human Rights is not a code. It

guarantees fundamental human rights and freedoms, and in this respect it is
similar to a number of constitutions. It protects the individual in international
law, even against the state of which he or she is a national. The protection
system has collective backing and allows violations to be challenged. It covers
not only fair trial, but also the rights of the defence, which cannot be
disregarded or restricted and if anything are enhanced. The Convention
requires a distancing from domestic law, the application of "Convention
thinking" to problems in the interests of free movement of goods, capital,
services and people. Article 6 of the Convention guarantees the right of the
accused to a fair trial. This provision applies to all accused persons. It makes
no distinction between types of crime or perpetrator. Thus, it does not
specifically address organised crime or money laundering, and clearly does not
give any guidance as to penalty. The provisions of Article 5 of the Convention
concern the right to liberty and security, Article 3 contains a prohibition
on torture and inhuman treatment, and Article 8 enshrines the right to respect
for private and family life, for example in connection with illegal seizure.
Signature and ratification of the Convention are a precondition for
membership of the Council of Europe; the principles set out in the
Convention have a special universal value and are a guarantee for all
accused persons. The accused has the right to defend himself in person or
through legal assistance of his own choosing and the right, if he does not
have sufficient means to pay for legal assistance, to be given such
assistance free of charge when the interests of justice so require. Judges
and lawyers have a duty to protect the rights of the defence in criminal
proceedings. The Convention requires them to ensure that every accused
person enjoys the rights set out in it.

The conclusions of the Bilateral Meeting the Council of Europe,

the CCBE and the Hungarian Bar organised in Budapest in December 1997
stated that, in a democratic society, lawyers have an essential role to
play in the administration of justice and in the protection of human rights and
fundamental freedoms. In the performance of their duties, lawyers in all societies
are bound by rules made by a properly elected Bar independent of the State.
The State should simply provide the legal framework for establishing the Bars,
leaving it to the latter
to regulate themselves. Lawyers are independent; this independence is essential
if the profession is to enjoy clients' confidence. All lawyers must be free from
any external influence - administrative, financial or other - which interferes with
their independence. They must have moral integrity, respect
confidentiality, obey codes of practice and avoid conflicts of interest and any
activity incompatible with the independent exercise of their functions.

These points were made at a meeting for Eastern and Central European
lawyers, but they are valid for all European lawyers, and they continue to be
of obvious topicality.

Several centuries ago, our professional forebears realised that they

must impose strict rules of conduct, in their own and in the client's
interest. The
objective of a code of professional conduct is to ensure that lawyers perform
their functions properly, to the standards laid down in the code. The rules are
founded on traditions, but also on shared values that are fully recognised and
clearly set out in the code.

In Budapest there was discussion of lawyers' independence, but

the participants were particularly concerned about confidentiality, searches,
seizure of documents in the lawyer's office or home, free expression and
the right of the accused to a fair trial as guaranteed in Article 6 of the
Convention.
 At its session in Liège in November 1997, the CCBE stressed
confidentiality as being of prime importance in a free and democratic
society. Observance of confidentiality is a pointer to the extent of the rule of law.
As the CCBE is a European Union organisation, the confidentiality rule in
its code of conduct has been taken into Community law.

The war on organised crime and money laundering has called for careful
analysis of all effects of legislation planned or adopted in European
Union countries. The intentions of the European institutions are clearly
praiseworthy, and the CCBE has had to respond sensibly to the European
Commission's call while seeking to avoid lawyers being brought under the
provisions of Council Directive 91/308/EEC of 10 June 1991 on combating
organised crime. The
European Commission suggests that the CCBE acknowledge the problem
and that our code of conduct stress lawyers' role.

The CCBE has devoted considerable time to preparing a revised code of

conduct, adapting the code to the current needs of the profession and
society. The concept of independence and the absolute nature of the
lawyer's duty of confidentiality have never been challenged. Delegates from
all countries were unanimous about this and confirmed the crucial importance
which lawyers attach
to these two principles.

The delegates are of course aware that the European Commission's

call had some foundation to it, and the CCBE accordingly added the
problem of money laundering to its latest session agendas in connection
with revising the code of conduct. The CCBE has taken into consideration
that, intentionally or unintentionally, lawyers sometimes aid and abet money
laundering. It has
focused on the problem and postponed adoption of the revised code of
conduct, because, as pointed out above, lawyers must set standards for
themselves, both
in their own interest and in that of their clients.

It must be clearly stated that if legal practice collides with the

criminal code, if the crime of money laundering is committed by complicity, it
automatically results in the lawyer being disbarred. That is the only possible
penalty in such cases. The CCBE has always stressed that lawyers cannot
expect to take refuge
in confidentiality in order to conceal the commission of a crime.

At the Brussels session of the CCBE in April, Bar delegates listened with
interest to the statement by the representative of the European Commission, Mr
Edward Newman, but, as I have said, they were unanimous that the client's
trust and the duty of confidentiality are sacrosanct and that any breach
would run counter to the profession's principles. The delegates pointed out that
maintaining confidentialit y was not a privilege, but a right and obligation which
safeguarded the right to a fair trial as set out in Article 6 of the Convention.
50
Our Brussels colleague Pierre Lambert , a specialist on confidentiality,
observes in the introduction to his book on the question that the confidentiality rule
is rooted in the legal, ethical and moral spheres, which are not always fully

50
Pierre Lambert, "Le secret professionel", NEMESIS Editions 1985.
congruent, hence the controversies in the literature and in case law, the two often
being at odds and difficul t to reconcile. This has opened the door to a range
of interpretations and thus to a lack of consistency and even to arbitrariness.
Bacon points out that the best law is that which leaves the least room for
arbitrary decisions or exercise of judicial wisdom.

According to Professor J. Garniet, confidentiality is bound up with human

dignity, people's reason for existing, their motivations and limitations. It has to
do with the privacy which our civilisation allows us as an entitlement and
which it ensures by protecting the home, correspondence and the idea of
freedom. Confidentialit y is one of the guarantees of the human person and as
such there is no need for it to have any different justification in the legal
system. Any other notion distorts the truth and does not reflect life.

Lambert nonetheless sees the full implications of confidentiality and,

while noting that confidentiality is at the heart of privacy and that breach
of it strikes at peaceful existence, freedom and dignity, he acknowledges
that, in absolute terms, confidentiality could be an obstacle to the general
interest. Hence the importance of devising rules that strike the necessary
balance between these various values, which are all legitimate but often
conflicting.

The history of our profession offers various pronouncements on

this subject, the importance of which has been appreciated since time
immemorial. The Book of Proverbs, the part of the Bible attributed to
Solomon, the son and successor of King David, who lived from 979 to 931
BC and whose wisdom is legendary throughout the Orient, contains ideas on
th th
life in society in the Middle East from the 8 to the 5 century BC. To quote
chapter 25, verses 9 and 10: "Debate thy cause with thy neighbour himself;
and discover not a secret to another: Lest he that heareth it put thee to
shame, and thine infamy turn not
away".

In the Philippics, Cicero castigated lawyers who betrayed their

clients' trust. Much later, in the Middle Ages, the interests of religion, the
monarch or the state took precedence over the lawyer's right to confidentiality in
th th
some systems. But in the 19 and early 20 century, abuse of this idea led
legislators to treat breach of confidentiality by a lawyer or a doctor as a criminal
offence, "because in
a properly functioning society the sick person must be able to find a doctor,
the litigant a lawyer, and the penitent a confessor, and neither the doctor, the
lawyer nor the priest can perform their function if the information confided in
them is not inviolably protected. People would stop going to lawyers if they
feared disclosure
of information given in trust. If a lawyer once betrays that trust, everyone is at risk
and will think twice about using a lawyer. Justice itself would suffer."

The theory of confidentiality, which links professional ethics and

public policy, affects essential interests of the state and the community. It
continues to be topical, and it has undoubtedly had an impact on the
CCBE's position on
money laundering. Meeting in Liège in November 1997, Bar delegates said:

- it is unacceptable to the legal profession, as one of the guarantors of the rule

of law, for rules of legal practice to hamper action to combat organised crime
and money laundering;
- equally the legitimate needs of the police and the courts do not alter the
inviolabilit y of the lawyer's office or the confidentiality rule, which are fundamental
in a society based on freedom and respect for human rights.

The CCBE accordingly declared that:

- it was solely for lawyers' professional bodies in each country of the

European Union and EFTA to introduce supervisory machinery for ensuring that
lawyers did not assist organised crime or money laundering;

- it was for lawyers' professional bodies to verify that lawyers' conduct was
in conformity with rules of practice and principles of public policy;

- professional bodies had a duty to take whatever steps were necessary to put an
end to any offences brought to light and punish the perpetrators;

- and, lastly, if in connection with offences the police or judicial authorities

wanted information or documents held by a lawyer, they could legally and
validly take possession of them only in the presence of a representative of the
professional body concerned, who would ensure confidentiality and be
empowered to enforce
it.

Apparently, however, some governments want to force lawyers to inform

the judicial authorities of even a suspicion that a client is committing or
has committed the offence of money laundering (Ireland was the country
concerned). Another case was cited at the last CCBE session in April. In
Switzerland, since 1
April 1998 all notaries and lawyers who are financial go-betweens have
been required to report clients who are or may be implicated in money
laundering; if they do not, they face prosecution.

So "dirty" money has undoubtedly become a danger to all lawyers,

because they can be, and sometimes are, implicated in money laundering. In
1995 Canada provided an example, and as noted by one of the Canadian lawyers
at the time, the problem that arises for lawyers is to obey the law while
keeping their clients' trust. That is the balance which must be struck. It is
important to probe sufficiently to make sure that the money does not
derive from criminal activity, but not to overdo it and lose the client's
trust. Another important
suggestion was made on that occasion: the law should be amended to
protect lawyers who are only doing their job; the lawyer who receives the
standard fees and no more should not be at risk of prosecution.

Let us return to the European context. The CCBE has drawn up

a number of draft resolutions whose content is consistent with these
Canadian ideas. Clearly it is important to be aware that in such cases there is
a fine line between legality and illegality and that it is easy to stray from
legal ground unintentionally and become the client's accomplice. By
adopting the revised professional code of conduct and its declaration, the
CCBE has provided a reasonable response to the European Commission's
appeal.
 What, then, should a lawyer do - from the point of view of the European
Convention on Human Rights and the profession's code of conduct - when a
person requests legal assistance in a money laundering case?

Professional bodies and Bars should raise awareness among their

members so that they do not unintentionally collude in criminal offences.
Ethically, a lawyer may refuse legal assistance only in exceptional cases and
with proper justification. He is entitled to refuse if he has doubts or if
he suspects the client of involving him in a crime.

The lawyer must have full details of the person seeking assistance and
of the person for whom legal assistance is requested. He must know the facts
of the matter with which the person is charged. Fees must not be excessive
and must be paid into the bank account of his legal practice.

If the client openly states that he is charged with money laundering, the
lawyer may agree to defend him, the accused being entitled to defence under
the Convention, but at all times the lawyer must be careful and watch out for
any attempt by the client to make him his accomplice. On no account must
there be any overpayment.

It is not illegal for the state to involve lawyers against their will
in combating organised crime and money laundering; the Swiss authorities
have already decided to do this, and the Irish government intended to, or has
already done so.

The Polish Bar regards this as contrary to the Bar act and the
Bar's code of conduct, and as breaching the confidentiality of the
lawyer's professional dealings with the client.

In a state based on the rule of law, the law must be obeyed, but at the
same time any breach of confidentiality by the lawyer is a serious obstacle to
practice of the profession. How is the lawyer to do his job without damaging
his client? Will there be any point in future in a client's confiding his
most private secrets if the lawyer has to pass them on to the prosecutor
or the police? This will have adverse consequences for the profession and for
justice, consequences that will sometimes be tragic for the client.

Here the essential question from the standpoint of the accused must
be: in these circumstances, is there any real guarantee any more of the right to
a defence as established in Article 6 of the Convention? I have referred to
Bacon and spoken of judicial arbitrariness where a court lifts the lawyer's right
to confidentiality and allows the prosecution to require him to testify against his
client.

Lawyers’professional associations – the IBA, the UIA, the Federation

of Bars of Europe, the CCBE and other organisations – have been informed
and are aware of violations of the rights of the defence, searches and illegal
seizures in lawyers' offices or homes, but any protests or action by
these professional associations are usually too late and in practice have no
effect.
 The European Parliament should adopt an amendment to the
European Convention on Human Rights to guarantee the full
and unchallengeable right of the accused to a fair trial, give it solidity,
and make sure that the courts cannot interfere with confidentiality or
the defence counsel's authority. The lawyer's right to confidentiality must be
absolute, and since the Convention is a legal instrument which takes
precedence over the Constitution, which is part of domestic law, the
Constitution must be amended accordingly.

As pointed out above, Poland's code of criminal procedure allows the

prosecutor to ask the court to lift the lawyer's right to confidentiality. But the
Bar act and our code of conduct make no provision for that, and the Polish Bar
treats confidentiality as absolute. During the communist period, the
Poles experienced many human rights’violations - political arrests, illegal
seizure of documents in lawyers' offices, and so on. That was part of the
secret police's war on political opposition, on "anti-socialist elements". Hence
we are sensitive
to such illegal practices. Four years ago, the prosecutor's office ordered two
lawyers to testify against a client they had represented in a civil case who stood
accused of an offence. The lawyers, supported by the President of the Bar,
refused to testify, as a result of which the Minister of Justice instituted
proceedings and asked the Supreme Court to rule on the relevant provisions of
the code of criminal procedure and the Bar act. We had the support of all the
professional associations and of our colleagues in Central Europe,
including the former Czechoslovakia, where there had been similar
unfortunate experiences. The court found that the code of criminal
procedure took precedence, but added that removal of confidentiality must be
exceptional and confined to cases where it was in the interests of justice.
This exception was subsequently added to the code along with a
number of amendments. Nevertheless, since that time, no lawyer has had to
testify against his client.

The European Commission's report on implementation of Council

Directive 91/308/EEC on prevention of the use of the financial system for the
purpose of money laundering indicates that, despite good results there is still
room for improvement , and this year a draft amendment is to be
prepared under which the directive will apply to professions including
solicitors, who will be required to report sums of money deposited by their
clients in connection with certain types of transaction. It is thought that the
Commission's draft will not apply to certain legal activities – namely "purely"
defence work or "purely" advisory work. Then it will be up to the European
Parliament to address the issue.

It is to be hoped that the CCBE will insist on being consulted on the

new draft directive so that Article 6 of the Convention genuinely safeguards the
rights of the defence.
Practice as a lawyer and the principles of the European Convention on
Human Rights

the problem of money laundering and confidentiality of this profession

the problem arising from organised crime and the ethics of this
profession

Mr. John FISH

Chairman of CCBE Task Force on Money Laundering
Dublin, Ireland

Introduction

I am very pleased to address you today on the problem of money laundering

and confidentiality of the legal profession with the allied problem of organised
crime and the ethics of the profession under the general heading of the
exercise of the profession of lawyers with regard to the principles of the
European Convention on Human Rights.

You might like to know that, in fact, I am not a criminal lawyer but a commercial
lawyer based in Dublin, practising in the field of mergers, acquisitions
and financial transactions generally. However, I think it is fair to say
that it is precisely in the fields in which I do practice that money laundering
issues can arise or, to be more precise, the need to be vigilant to
potential money laundering activities by clients is relevant. Apart from that, I
have the honour of being the Chairman of a committee which was established
by the Law Society
in Ireland to monitor proposed legislation by the Irish Minister for Justice,
Equality and Law Reform to extend existing anti-money laundering legislation
to solicitors, the principle feature of which would, if so designated, be the
reporting of suspicious transactions to the authorities.

I also have the honour of heading up a Task Force established by the CCBE,
effectively to carry out the same job in connection with the
European Commission’s proposals to extend the existing Directive on money
laundering (which currently applies to credit and financial institutions)
to certain professions including the profession of lawyer.

Since I became involved in the subject of money laundering and the

legal profession, I have found that lawyers have reacted with
astonishment at the very suggestion that they should be put in a position
of reporting suspicious transactions to the authorities. How is it possible, they
say, that lawyers should be obliged to denounce their clients to the authorities
and worse still, be subject
to criminal prosecution themselves if they fail to do so? Where do the
time honoured principles of client/lawyer confidentiality stand in the
circumstances? The suggestion itself causes lawyers to fear for the
integrity of one of the fundamental pillars of the profession, and in some
instances, comparisons
have been drawn with the erosion of civil liberties during the darker days of
European history.

However, I do not think it is quite as simple as that, when one bears in mind not
only the nature of money laundering and organised crime itself, but the danger
to which lawyers themselves may be exposed where, acting in good faith, their
services are availed of by criminal elements in order to conceal their
money laundering objectives. I hope that in the course of this address, I will be
able to point out the difficulties which face the legal profession from the ethical
point of view having regard to the stated intention of the authorities to “widen
the net”
so that lawyers will, in certain circumstances, be bound by obligations
which currently apply to credit and financial institutions within the European
Union.

Whilst I appreciate that many of you here today are from jurisdictions
from outside the European Union, nevertheless, I believe the current thinking
of the European Commission in relation to the legal professions and anti-
money laundering measures will serve, for the purposes of this address, as
a useful guide to the way in which other States may approach the subject.

Money laundering and organised crime

It cannot be denied that money laundering, that is to say the process whereby
dirty money, representing the proceeds of organised crime is converted
into clean money, represents one of the most serious crimes with which
the financial community and States, have to cope. No one could quarrel with
the efforts of the international financial community to combat money
laundering. Equally, it would be a mistake for lawyers to underestimate the
determination of the authorities in the international community to combat
money laundering where it is perceived by such authorities that members of
the legal profession can be targeted by organised crime. Neither can it be
denied that lawyers have not been and will not be immune from determined
attempts by criminals to avail
of the legal services of lawyers in order to obscure their real objectives.

To date, the authorities have taken the view, in relation to credit and financial
institutions, that the efforts of organised crime to use such institutions for
money laundering purposes can be effectively limited where certain procedures
are followed and, in particular, procedures relating to:

- the identification of clients and the retention of records relating to such

identification
- retention of records relating to the transaction concerned, and
- probably the key provision, that such institutions would be under an
obligation to report to the authorities any suspicious transactions
without notification to their customers.

It is perfectly understandable therefore that, to the extent that lawyers in

the course of their activities are engaged in the provision of legal
services in connection with transactions primarily of a financial character,
the authorities have taken the view, that subject to certain qualifications,
lawyers should also be subject to similar obligations as those which relate
to credit and financial institutions.
I would refer you to the remarks contained in the Explanatory Memorandum
issued by the European Commission in connection with the proposal for
a European Parliament and Council Directive adopted by the Commission on
th 51 52
14 July, 1999 to extend the provisions of the existing Directive to
certain professions including the legal professions and in particular, the
references to the misuse of lawyers and accountants to help hide
criminal funds. For
53
example, the reference to the Financial Action Task Force , 1996-97 Report in
the Explanatory Memorandum is worth noting where it states that:

“as regards money laundering techniques, the most noticeable

trend is the continuing increase in the use by money
launderers of non-bank financial institutions and non-financial
business relative to banking institutions. This is believed
to reflect the increased level of compliance by banks with
anti- money laundering measures .... Money launderers
continue to receive the assistance of professional facilitators,
who assist in
a range of ways to mask the origin and ownership of tainted
funds.”

It is against this background therefore that the legal profession needs to assess
the extent to which compliance with the obligations similar to those
currently imposed on credit and financial institutions within the European
Union will conflict with the traditional principles relating to client/lawyer
confidentiality and also to assess on grounds of proportionality, whether in
so complying, the erosion of such principles are or are not acceptable. The
fundamental issues which I believe need to be addressed are as follows:-

- Is it in the best interests of the administration of justice and accordingly

in the interests of the common good that disclosures by lawyers in
connection with suspected money laundering activities by clients or in
connection with organized crime should be made without the consent
and knowledge of clients?

- Does the fact that such disclosures may be limited

- to the financial activities of clients, and

- will not be required where the representation of clients in legal
proceedings are involved

make any difference?

I hope that during the course of this address, I may be able to identify
the natural concerns which members of the legal profession would have
in the context of these issues, to review the extent to which the
Convention on

51
COM (1999) 352 final; 99/0152 (COD)
52
Council Directive 91/308/EEC, 10 June, 1991
53
FATF was created by the G7 countries and includes the European Commission and
all EU Member States
Human Rights might be relevant, to consider issues of privilege and the current
proposals of the European Commission in this regard.

The common good

From an entirely subjective point of view, it is of course very easy for a lawyer
to say that almost by definition it cannot be in the best interest of the
administration of justice that lawyers should be compelled by law to
make disclosures, on the grounds that in order to discharge his duty to act in
the best interests of his client, and apart altogether from any contractual
or ethical issues, he must be put in possession of all relevant facts to
enable him to properly advise his client.

The client needs to have the assurance that by instructing his lawyer fully,
information will not be revealed, save with his express consent.

I suggest that the following tests can be applied in determining whether or not
such an obligation is in fact in the common good:-

- is the obligation necessary for the administration of justice?

- will the obligation lead to any restriction on the rights of clients to

access to justice or the right against self-incrimination?

- is the obligation compatible with the lawyer’s role in advising

clients against the commission of crime?

- Is the obligation open to abuse, albeit unintentional, in other respects.

Before considering each of the above, I would make the following preliminary
points:

1. I do not think we need dwell too much on the position of the

lawyer who actively participates or colludes with his client in the commission of
a crime whether it relates to money laundering or any other criminal offence.
There can be no question that either the client or lawyer, or the lawyer
himself should
in any way benefit from the cloak of confidentiality. It should be stated loudly
and clearly that the legal professions do not condone any such activity
by lawyers.

2. It seems to me also that if a lawyer knows as a matter of fact, that his

client is using the lawyer’s services simply to pursue his criminal ends,
then equally in these circumstances, there can be no question of a
right to confidentiality. I would personally take the view that apart from
immediately ceasing to act for the client, no criticism could be attached
to a lawyer who decided that in those circumstances, he voluntarily
reported his client to the authorities. One must not forget that the client is
simply trying to make use of the lawyer’s services for his own criminal
purposes.
(i) Administration of Justice

In the discharge of his duty to act in the best interests of his client, a lawyer
must advise his client not only on his legal rights, but also ensure that he (the
lawyer) and his client are acting in compliance with the law. In the absence of
a full and frank disclosure by a client to his lawyer of all relevant facts
and information, then the lawyer will not be able to discharge these functions
which
in turn has an important place in the administration of justice. The
confidentiality of information supplied to the lawyer, is an essential protection to
a client to enable the lawyer to discharge that function.
54
In the well known case of AM&S , the European Court of Justice spoke in the
following terms regarding lawyer/client relationship:

“that confidentiality serves the requirements, the importance of

which is recognised in all Member States that any person must
be able, without constraint to consult a lawyer whose profession
entails the giving of an independent legal advice to all those in
need of it.”

The principle is perhaps most dramatically described in an old US

55
Supreme Court Decision of Connecticut Mutual Insurance v Schaefer where
the Court observed:

“The protection of confidential communications made

to professional advisers is dictated by a wise and liberal policy.
If a person cannot consult his legal adviser without being
liable to have the interview made public the next day by an
examination enforced by the Courts, the law would be little short
of despotic.
It would be a prohibition upon professional advice and
assistance.”

(ii) Clients’ rights of access to justice and rights against self-

incrimination

If, during the course of taking instructions from a client, a lawyer became aware
that a client might have committed a money laundering offence which required
the lawyer to inform the appropriate authorities without the consent of
the client, then this could effectivel y result in the client unwittingly
incriminating himself. The mere fact that by consulting a lawyer, potential
clients become aware that matters disclosed within the sanctity of the
lawyer’s office could be reported to the appropriate authorities, would
inevitably result in clients being fearful of taking legal advice, thus denying
the rights of such clients to legal advice in the first instance.

These interlocking principles of access to a lawyer and the privilege

against self-incrimination have been reinforced by judgments of the European
Court of
54
Case 155/79 AM&S [1982]ECR1575
55
94 US 457 (1877)
 56
Human Rights and in particular, I would refer you to Saunders v UK where
the Court held that Article 6(1) of the European Convention on Human Rights
(which guarantees, inter alia, the right of a fair trial), protects the privilege
against self-incrimination.

The following statements in that decision are worthy of note, namely, at

paragraph 68 and 69:

68 - “The Court recalls that ... the right to silence and the
right not to incriminate oneself, are generally recognised
international standards which lie at the heart of a notion of a
fair procedure under Article 6. Their rationale lies, inter alia in
the protection of the accused against improper compulsion by
the authorities, thereby contributing to the avoidance of
miscarriages of injustice and to the fulfilment of Article 6 ...
The right not to incriminate oneself, in particular,
presupposes that the prosecution in a criminal case seek to
prove their case against the accused without the resort to
evidence obtained through methods of coercion or oppression
in defiance of the will of the accused. In this sense, the right
is closely linked to the presumption of innocence contained
in Article 6(2) of the Convention.”

69 - “The right not to incriminate oneself is principally

concerned, however, with respecting the will of an accused
person to remain silent. As commonly understood in the
legal systems of the Contracting Parties to the Convention and
elsewhere, it does not extend to the use in criminal proceedings
of material which may be obtained from the accused through
the use of compulsory powers, but which has an existence
independent of the will of the suspect such as, inter alia,
documents acquired pursuant to
a warrant, breath, blood and urine samples and bodily tissue for
the purpose of DNA testing.”
57
Again, in Funke v France , the French Customs Authorities required Funke to
disclose the existence of documents relating to the operation of a foreign bank
account. When he failed to do so, he was convicted and fined. The
Court concluded that this infringed Article 6(1) of the Convention and stated:

“The Court notes that the Customs secured Mr.

Funke’s conviction in order to obtain certain documents
which they believed must exist, although they were not certain
of the fact. Being unable or unwilling to procure them by some
other means, they attempted to compel the applicant himself
to provide the evidence of offences he had allegedly
committed. The special features of customs law cannot
justify such an infringement of

56
(1991) 24 EHRR 332
57
(1993) 16 EHRR 297
Note: Other ECHR cases which are worth noting are: Murray v United Kingdom
(1993) 16 EHRR 247; S v Switzerland, 25 Oct 1991; Kopp v Switzerland, 25 March
1998
 the right of anyone “charged with a criminal offence” within the
autonomous meaning of this expression in Article 6, to
remain silent and not to contribute to incriminating himself.”

For these reasons, one could foresee difficulties in reconciling a

mandatory reporting scheme by lawyers with the obligations of States under
the European Convention of Human Rights.

(iii) Confidential role of lawyers in the prevention of crime

In the endeavour to resolve the conflict between the interests of the State in
combating crime and the entitlement of clients to confidentiality in their dealings
with lawyers, it should be borne in mind that a lawyer performs an important
and significant role in the administration of justice by ensuring that the clients
who seek their advice and assistance, will not engage in an activity
which would otherwise constitute a criminal offence. This can only be
achieved where information is made fully available by the client to the
lawyer in the strictest confidence, thus enabling the lawyer as a member of
an independent and self-regulated profession to provide advice which cannot
be obtained from any other source.

(iv) Other Issues

In addition, I suggest that the following consequences need to be taken

into account:

- is it right that lawyers whose duty it is to defend the interests of clients,

should find themselves in the position of having to give evidence against
58
their clients in subsequent prosecutions? ;
- is it right that where a report is based upon mere suspicion and not on
facts, that persons could be made subject to investigation by State
authorities, even though it subsequently turned out that they were
entirely innocent of any crime?;
- is it right that, a lawyer might even incriminate himself in the course of
reporting suspicions, if he himself were to be subsequently prosecuted?
- is it possible that information made available to the authorities, but not
acted upon by the authorities, could still be retained as a
permanent record on file with possible adverse consequences for the
client in some other set of circumstances?; and
- finally, do we have any concerns that, once the principle of client/lawyer
confidentiality has been diminished, authorities would not be tempted to
regard this as a useful precedent, where it would suit the authorities to
obtain information concerning the affairs of lawyers/clients?

58
Note: It has been suggested that as the information is required in connection with an
investigation by the authorities, then the lawyer could not be compelled to give evidence
against his client. It is however difficul t to resist the idea that, in order to establish proof,
the evidence of the lawyer might well be required in order to achieve a
successful
prosecution.
Client protections

Having outlined the difficulties which lawyers might face regarding their
obligations of confidentiality to their clients, as understood in the various
European jurisdictions (for example in those jurisdictions where ‘le
secret professionel’ or its equivalent applies and which constitutes an
intrinsic and sacrosanct part of the daily professional life of a lawyer), we
need to consider whether, by limiting the obligation to disclose to certain
financial activities of clients, and by excluding the obligation to report
suspicious transactions in the context of legal proceedings, the rights of
clients are in effect sufficiently protected.

Article 2a(5) of the European Commission’s Proposals, provides that

the obligations laid down in the existing Directive shall be imposed on
‘independent legal professionals’when assisting or representing clients in
respect of the:

(a) buying and selling of real property or business entities

(b) handling of client money, securities or other assets
(c) opening or managing bank, savings or securities accounts
(d) creation, operation or management of companies, trusts or similar
structures
59
(e) execution of any other financial transactions

There will, no doubt, be those who will argue that because lawyers are involved
in assisting clients, in what may be regarded as a purely administrative
function, then there is no real justification why lawyers should be regarded as
immune from the obligations which are borne by financial intermediaries.
Accordingly, on this hypothesis, the State is entitled to implement
legislation which imposes such obligations on lawyers, having taken
into account principles relating to privilege, ie. the circumstances recognised
by the Courts under which a lawyer cannot be compelled to furnish information.

I would not dare to assume that the principles regarding privilege in the
common law jurisdictions (such as in the United Kingdom and Ireland) are the
same throughout continental Europe, but I will nevertheless assume that for the
purposes of this address, it is a generally recognised principle that a
lawyer should not be compelled to disclose information where he is
representing his client in legal proceedings. In common law jurisdictions, the
privilege rule has been defined as follows:-

“It is a substantive principle of the common law that in Civil

and Criminal cases, a person is entitled to
preservethe confidentiality of statements and other
materials which have been made or brought into existence
for the sole purpose of seeking or being furnished with
legal advice by a practising

59
Note: It is interesting that, broadly speaking, the Swiss anti-money laundering
regulations make a distinction between the lawyer performing his legal duties in
his capacity as a lawyer, in which case, as I understand the position, an obligation to
report does not arise, and where he acts not in the capacity of a lawyer but for
example, as a
financial intermediary, in which case the obligation does arise.
 lawyer, or for the sole purpose of preparing for existing or
contemplated judicial or quasi judicial proceedings.”

In Ireland, the Irish Courts have made a distinction between communications

60
for the purpose of obtaining or receiving legal advice and legal assistance . In
the case of communications which are required for legal assistance, then it is
unlikely that such information would be protected on the grounds of privilege.

It will be noted that in the United Kingdom, which so far as I am aware is the
only member State of the European Union which has applied anti-money
laundering provision to solicitors, the principle of privilege has been
61
recognised .

It can be seen therefore that unless the information, based upon which a
lawyer has formed a suspicion, has been communicated to the lawyer,
falls within the realms of privilege, then the lawyer will have no choice but to
report his suspicions to the authorities.

Certainly in common law jurisdiction, and I suspect in some other jurisdictions

depending on how rules of privilege or its equivalent is implemented, it still
remains the responsibility of the lawyer concerned to determine whether or not
the rule applies. Thus the lawyer will become ‘a judge and jury in his
own cause’. One could envisage circumstances therefore where a lawyer did
not report his suspicions where he should have done so (because he believed
that privilege applied) and circumstances where he did report his suspicion
where he should not have done so (because he believed that privilege did not
apply).

Before leaving this aspect, I need to refer to the proposals of the

European Commission and to consider the way in which the ‘lawyers’
discretion’ is intended to be dealt with. I quote again from the
Explanatory Memorandum where it is stated that:

“In the case of notaries and other independent legal

professionals, the obligations of the Directive would only apply in
respect of specific financial or company law activities where the
money laundering risk is the greatest.

Given the particular status of the legal professions, as stressed

inter alia by the European Parliament, lawyers would
be exempted from any identification or reporting
requirements in any situation connected with the representation
or defence of the client in legal proceedings and, again to make
full allowance for the professional duty of discretion, as called
for by the European Parliament, Member States would be
given the option of allowing lawyers to communicate their
suspicions of money laundering by organised crime not to
the normal anti-money laundering authorities, but to their bar
association, or equivalent professional body.
60
Smurfit Paribas Bank Limited v AAB Export Finance Limited [1990] IR 469
61
Criminal Justice Act, 1993
 The Member States will determine the appropriate forms of
cooperation between the bar associations or professional bodies
and the normal anti-money laundering authorities. The
Commission will monitor closely the effectiveness of
these procedures.

With this special treatment for lawyers, the Commission is

striving to include this profession in the anti-money
laundering effort while safeguarding the special role of the
lawyer in our society. Professional confidentiality is a general
principle which
is encountered, but takes a different form in every Member State
depending on the structure of the relevant legal system.
The basic objective of the proposal in this area is to make
it more difficul t for actual or potential money launderers to
attempt to misuse the services of the lawyer, possibly
by providing inaccurate or incomplete information, safe in
the certainty that the attempt, if discovered, would not be
reported to any other higher authority. At the same time, the
lawyer would not be left alone faced with the suspicion of
serious criminal activity. Appropriate sanctions should,
however be introduced where a report to the bar association
should have been made, but was not made.”

In my role as Chairman of the Task Force set up by the CCBE, we

had endeavoured to put forward proposals to the European Commission
whereby the implementation of measures by individual Bars and Law
Societies, would make it more difficul t for potential money launderers to have
access to the legal profession. For example, the introduction of stricter
controls in relation to the sources of funds and disciplinary measures
for breach of anti-money laundering regulations would have the effect of
isolating or “ring fencing” the legal profession from criminal elements.
In this context, it is interesting
to note, that the Commission has apparently acknowledged the proposals of
the CCBE, that the bar associations or professional bodies could
have an important role to play in the combat against money laundering. As
indicated in the Explanatory Memorandum the Commission’s proposals
contain the following:

Article 6(3), first paragraph

“In the case of the independent legal professions,

Member States may designate as the authority responsible for
combating money laundering, the bar associations or
appropriate self- regulatory body of the profession concerned
and in such cases shall lay down the appropriate form of
cooperation between them and the other authorities responsible
for combatting money laundering.”
Furthermore, the second paragraph of proposed Article 6(3) provides that
 “Member States shall not be obliged to apply the obligation laid
down in paragraph 1 to such legal professionals with regard to
information they receive from a client in order to be able
to represent him in legal proceedings.”

However, the paragraph goes on to state that:

“This derogation from the obligations laid down in paragraph

1 shall not cover any case in which there are grounds
for suspecting that advice is being sought for the purpose
of facilitating money laundering.”

Although at the time of the preparation of this presentation, these proposals are
subject to further review by all relevant parties, and indeed may still go through
further change when considered in the European Parliament, it is gratifying that
recognition has been given to the potential role of the bar association or
professional bodies. However, it is not entirely clear at this stage how these
proposals would operate in practice. For example, where a Member
State decides to exercise the option of designating a bar association or
professional body, would that association or body still be required to pass
on information received to other authorities, or would they be able to impose
sanctions on their members without further reference to such other
authorities? Certainly, in the latter case, and assuming the bar
associations or professional bodies were willing to undertake these
burdens, and that satisfactory arrangements are agreed between the
authorities and such bar associations or professional bodies which
effectivel y protects, for example, “le secret professionel” then perhaps a
number of the concerns which I have addressed in this paper, might
to some degree be allayed.

The issue of confidentiality is a topic which is currently being considered

in connection with a proposed Recommendation on the freedom of
exercise of the profession of lawyers, by the Council of Europe’s
Committee on Legal Cooperation. The current thinking in relation to the
principle of confidentiality is that, whilst maintaining that all necessary
measures should be taken to respect the confidentiality of the lawyer/client
relationship, an exception to these rules could be made in particular when
criminal investigation so requires, as for example in the case of abuse of an
electronic communication between lawyers and clients for criminal conspiracy.

Furthermore, the Committee is currently considering a proposal that where it is

necessary during criminal investigations to restrict the confidentiality
of communications between lawyer and clients, such restriction should be
carried out under the control of a judicial or other independent and impartial
authority,
in order to enable the latter to ensure the respect of the rights of the defence
and of the principle of equality of arms between prosecutors and the defence
counsel. A qualification to this is the further proposal that this provision should
not imply that lawyers should be forced to witness against their clients.
Some general observations

In trying to reach a satisfactory conclusion on the issues for the legal

profession, I think that we should also bear in mind that money laundering may
not be confined only to the proceeds of terrorist and drug related crime. The
proposals of the European Commission referred to earlier, defines
criminal activity as including a crime specified in Article 3(1)(a) of
the Vienna
Convention, participation in activities linked to organised crime, fraud,
corruption or any other legal activity damaging, or likely to damage the
European Communities’financial interest, and also includes “any other criminal
activity” designated as such for the purposes of the Directive by each Member
State.

There remains however, some outstanding questions, and in respect of which

the concerns I have expressed in this paper will still be relevant. For example,
what will the position be, notwithstanding the implementation of any option by
States along the lines envisaged by the European Commission proposal,
where lawyers are still bound to report suspicious transactions to
the authorities in circumstances where “privilege” or its equivalent does not
apply?
In the event that a lawyer ultimately is prosecuted for failure to comply with the
money laundering obligations and, in particular, the reporting of clients to the
authorities, one can envisage that by way of defence, a lawyer might well argue
that the obligations imposed, either in relation to the client or even the lawyer
himself were in breach of the Convention on Human Rights. In that event, the
Court may be asked to determine the compatibility of such obligations with the
Convention having regard, I believe, to some of the principles which I
have outlined in the course of this presentation.
 General Report by:
Mr. Milan KOSTOHRYZ
Lawyer, Representative of the Czech Bar Association to the European Bars
Federation

Introduction

The Czech Bar Association was honoured to work with the Council of Europe on
organising the multilateral meeting of lawyers in which representatives of the
Council of Europe member States both from Western and Central and East-
European countries took part. Present were also representatives of the
Council of the Bars and Law Societies (CCBE). The sub-topics discussed
under the main ”Ethics of Lawyers” topic was a follow up to the
multilateral meeting on ”The role and responsibilities of the lawyer in a society in
transition” organised with success in Budapest by the Council of Europe together
with the
Hungarian Bar Association in December 1997.

The development in the discussed areas has not stopped and the issues are
important not only for Central and East-European countries but for West-
European countries as well. The most urgent and also the most sensitive
is now the issue of confidentiality, that forms a basis for a lawyer’s
profession, in view of the growing pressure by States searching for more
efficient instruments
in their combat with organised crime and corruption. In spite of the
pressure lawyers must continue to defend the interest of their clients. The
clients must trust their lawyers and it is, therefore, necessary to look for
solutions that would protect the basic principles of the lawyer’s
profession and prevent any interference from outside. The discussion on
the possible solutions of the problem continues, and will continue, in
many international organisations. Nevertheless, the lawyers must insist on
the fact that the protection of the client’s secrets in relation to the
lawyer and subsequently the courts has its human rights’dimension.

The issue of publicity is undoubtedly related to the ethics of the

lawyer’s profession together with access to justice and free legal aid.
Since the last meeting in Budapest the Council of Europe has drafted a
recommendation on the freedom of the lawyer’s profession that will reflect
the existing instruments and rulings of the European Court of Human Rights
related to the issue. The point mostly is the provision of efficient legal
aid in specific cases, confidentiality of communications with the lawyer
and appointing a lawyer in cases when it is required in the interest of justice.
The Bar Associations of the Council of Europe member States have been
asked for comments to the project that should be completed in the year
2000. The recommendation will relate to the freedom and independence
of the lawyer’s profession, legal education, general education and access
to the lawyer’s profession in general, role and obligations of lawyers, their
associations and the system of disciplinary actions. In view of the need to
harmonise the systems of the lawyer’s profession clear basic rules are
needed for lawyers and the profession.
Opening session - chaired by Karel Cermák, President of the Czech Bar
Association and Ms. Nathalie Wawrzyniak, Programme Adviser, Directorate of
Legal Affairs of the Council of Europe.

Ms. Nathalie Wawrzyniak, programme adviser in the legal affairs directorate of

the Council of Europe, opened the session. In her address she said that
the present meeting was a natural follow up to a similar meeting held in
Budapest
in 1997 on “the role and responsibility of lawyers in a democratic society”. New
at this meeting was the fact that the invitation was sent to bar associations of
all the Council of Europe member States and membership candidates.
The meeting in Budapest where leading professionals spoke on the individual
topics indicated that the independence and respect for ethical rules of the
profession were inseparable features of the lawyer’s profession. At the
moment, the most urgent and most sensitive seems to be the approach to
and solution of the principle of confidentiality and obligatory non-disclosure
which form a basis of the profession. Lawyers are here to defend the
interest of their clients who must trust them and, therefore, it is necessary to
very carefully and sensitively respond to the tendency aimed at weakening
such basic principles of the lawyer’s profession and attempts to interfere
from outside.

Other topical issues involving professional ethics include publicity, access

to justice and free legal aid and other issues that, directly or indirectly, reflect
the problem of money laundering and organised crime. Since the last
meeting in Budapest the Council of Europe has decided to draft a
recommendation on the lawyer’s profession that will reflect the existing
instruments and rulings of the European Court of Human Rights which has
ruled in many cases connected with lawyers. The cases are mostly
connected with effective legal aid in specific cases, the confidentiality of
communications with the lawyer and the appointment of a lawyer in
cases where it is required in the interest of justice. The bar associations of
the Council of Europe member States have been asked, through their
respective Ministries of Justice, to submit comments to the project which
should be completed on the year 2000. The recommendation will treat issues
such as the freedom to perform a lawyer’s profession, legal education,
general education and access to the profession, roles and
responsibilities of lawyers, associations of lawyers, and disciplinary actions. In
view of the required harmonisation of the profession, the lawyers need
clear basic guidelines on the rules governing their profession in their
respective countries. At the end of her introductory address Ms.
Wawrzyniak said that already in Budapest the participants appreciated
meetings that allowed the lawyers to learn about the situation in other
countries and help form common approaches to urgent problems
accompanying our profession in its process of transformation and integration.

The topics discussed at the meeting were subdivided as follows:

1. The function of lawyer: the legal and moral obligations towards the clients
 – his own legal profession – the courts – the public (notably the problems
linked to legal aid);
2. Establishment of foreign law firms;
3. Multidisciplinary partnerships;
 4. Publicity: Publicity of legal services and its different forms;
5. Client’s funds;
6. The exercise of the profession by lawyers with regard to the principles of
the European Convention on Human Rights.

Apart from the ”Multidisciplinary partnership” topic the presenters were

both foreign and Czech lawyers and it was, therefore, possible to compare
various models and approaches applied in the traditionally democratic
countries with models and opinions (and regulations) in countries whose
legislation had undergone (and in some cases still was undergoing) in
the process of transformation. The speakers were real experts on
their topics and professionals in the field which is a component part of the
judiciary system and
a guarantee of its performance.

Topic I.

The function of a lawyer: legal and moral obligations towards the clients – his
own legal profession – the courts – the public

The client-lawyer relationship is a cornerstone of the profession because

it goes to its very basis. Its existence is not self-promoting, it is justified by
the need for legal services in society. The relationship must be governed by
certain rules. They are rules of the profession – professional ethics, rules of
conduct and competition between lawyers – and generally binding
regulations. One of the most urgent issues in this respect is to provide an
access to legal aid for all and the related issue of providing free legal aid.

Such was the introduction to the topic presented by Mr. Jirí Nykodým of the
Czech Republic who spoke also about the right to legal aid provided for in Art.
37, para 2 of the Bill on Fundamental rights and freedoms. The accessibility of
legal services is a fundamental right defined in the Constitution. It
is conditioned by the supply of such services and their price. While the supply
is sufficient in most countries their accessibility is a problem for low-
income groups of the population and the problem is faced in most
transforming countries in Central and Eastern Europe but also in some
countries in Western Europe. The aim is to achieve a situation in which the
definition of free legal aid for all groups of the population, irrespective
of their financial situation, guaranteeing their access to justice would
become a part of the legislation. It is difficult in terms of funds required for the
introduction and operation of such a system because it is up to the
Governments whose financial possibilities are very limited.

The second presenter on the topic was Mr. Tony Huydecoper of the
Netherlands. He focused on the client-lawyer relationship which is basically
built on trust. The existence and building of such a relationship is conditioned
by the independence of the lawyer who must be free of the influence of any
other interests, any loyalty or obligations to other persons; in other words,
 he/she must fully defend the legitimate interests of a client. The principle
of confidentiality and trust in the lawyer-client relationship includes its protection
against any interference from outside. We witness attempts to interfere with
and weaken this basic feature of the lawyer-client relationship as a result
of measures adopted by the States against money laundering and
organised crime. While this principle in the lawyer-client relationship is of
fundamental importance and cannot be violated there is no rule without
an exception. Especially, extreme cases with potential disastrous
consequences that the lawyer is naturally obliged to prevent should be
considered. Consequently, the lawyer’s profession should create, among
others, such conditions for the profession which would ensure the
lawyers’independence from any political, economic or other pressures.

Discussion

The discussion on this topic showed that all participants agreed with the need
to spare no effort in searching for respect for these inherent parts of the lawyer-
client relationship, i.e. confidentiality and the lawyer’s obligation of
non- disclosure.

Mr. Cermák, the Czech Bar Association, stressed the client’s interests over the
interests of the lawyer.

Mr. Rayner, UK, pointed to such problems in the UK where the lawyers
are obliged to report suspicious transactions carried out by their clients
without a possibility to give a prior information to their client.

Mr. Anczyk, Poland, pointed to the danger of a potential conflict of the

client’s and lawyer’s interest and the need to apply the confidentiality
principle also after the termination of contract on legal representation, the
same should apply
to ex officio defence counsels.

Mr. Thoroddsen, Island, spoke about the need to be aware of a potential

conflict of interest between the client and justice and the need for the lawyers
to reflect this aspect in their work. The focus should be on non-ethical, though
legal, delay tactics of some lawyers.

Mr. Huydecoper, the Netherlands, defined the protection of the confidentiality of

the information received from the client as a basic requirement and the British
approach and practice in this respect as untenable. However, only legitimate
interests of the client should be protected under this principle. It is up to the
lawyer to decide.

Mr. Alain de la Bretesche, France, warned against too sophisticated rules

in this field and stressed the need for the compliance with general legal rules
and feelings.

Ms. Heinicke, Germany, mentioned the responsibility of lawyers in

the legislative process indicating the lawyers are not visible enough. The
client should become more of a partner to the lawyer.

Mr. Philippe Lucet, France, stressed that confidentiality was a basis of the
profession and it should be viewed as a whole. This condition of the lawyer’s
profession cannot be subdivided, the lawyer cannot waive it, and nobody can
deprive him/her of it. Attempts to do this pose a threat to the profession and
Article 6 of the Convention of the protection of human rights should be
extended to the protection of confidentiality in the lawyer’s profession.

Mr. John Fish, Ireland, reacted to the statement by Mr. Rayner, UK, because
Ireland expects a similar approach as in the UK. They are attempting to reverse
the trend and explain that the solution to the problem should be entrusted to
the lawyers’profession. The discovery of the client’s abuse of trust falls
within the responsibility of the lawyer who must prevent his/her mixing with a
crime by
all meas.

Ms. Zhukovska, the Ukraine, pointed to the sensitivity of the problem and its
solution especially in the countries with recent experience with totalitarian
regimes and their actions against lawyers. In view of this experience it
is necessary to fully respect the principle of non-disclosure by lawyers to
prevent the duty of a lawyer to report something from turning into an act of
denunciation which is often the case. This approach is reflected in the new
rules of ethics approved recently by the Ukrainian Bar Association though
various pressures have been felt – also from abroad – to include the
obligation of lawyers to report the information in case of the most serious
crimes.

The representative of Norway stressed the need to carefully evaluate the

legitimacy of defending the client’s interest and the respect for the
condition that no other interests of the client can be defended. In this
respect, the lawyer’s independence is needed also in the lawyer-client
relationship.

Mr. Šolc, Czech Republic, stressed that the approach to the issue depends on
the lawyer’s position in the proceeding. His/her target is to protect the interest
of the client and to try to be objective. Therefore, the confidentiality principle
should be upheld without any reservation and should be seen as a gift to the
profession which is, at the same time, a condition for the performance of the
profession.

Mr. Huydecoper proposed to define the rights and obligations of a lawyer under
the principle of a ”just proceeding”with a focus on proceeding confidentiality.
In this respect the Malta representative mentioned an example of a lawyer
who took part in a public discussion on the case in which he acted as a
defence counsel.

Mr. Mohail Neagoe of Rumania, spoke about the restriction of rights to defence
and rights of lawyers in his country where the right to defend in the
court is often limited by the fact that the lawyer is not allowed to speak with the
client in seclusion, there are preliminary interrogations in the absence of
the lawyer, etc.. He expressed a need to get closer to European standards in
this respect.

The discussion to this topic was chaired by Mr. Karel Cermák, President of the
Czech Bar Association.
Topic II.

Establishment of foreign law firms

This topic was subdivided into the following sub-topics:

1. The respect of the principles of other Bars and Law Societies and
the establishment in other States;
2. The establishment;
3. The co-operation among lawyers from different member States;
4. The corporate spirit of the profession.

Mr. Károly Stefáni from Budapest and Mr. Martin Šolc from Prague were the
presenters on the topics.

The discussion on the topics indicated there might be different approaches to

the problem in different countries and they might lead to the same result, i.e. to
allow for the establishment of lawyers and law firms from other countries,
to establish partnership firms with local lawyers, and co-operation among
lawyers from various countries.

While Mr. Stefáni focused in his presentation on the situation in Hungary, both
its history and the present legislation and actual situation, Mr. Šolc
focused spoke about the situation in the Czech Republic and presented
also more general aspects. The basic difference between the Hungarian
and Czech legislation is that in Hungary foreign lawyers do not become full
members of the bar and can, therefore, act only as foreign legal advisers
and should be associated with a Hungarian lawyer or a Hungarian law firm .
Contrary to that the Czech legislation uses the principle of full acceptance
of foreign lawyers with all rights and obligations. Similar is the definition
of the scope in which foreign lawyers may provide legal aid. Their
authorisation covers the law of the lawyer’s country of origin, international and
European law.

The problem should be dealt with sooner than later because the countries must
prepare for the entry of foreign lawyers in the best possible way. A
parallel effort is needed to gradually harmonise the national legislation
with the respective EU Directive. The topic is also linked with the respect of
ethical rules related to the home and host law firms. The discussion opened
other serious questions. Answers to them may become a key to harmonising
the rules in this field. In this respect Mr. Šolc outlined issues such as the
sufficient professional background of the lawyers for providing legal aid in
a foreign country, the training of clerks, whether, in view of the EU Directive,
it would be desirable to allow the establishment without passing a test
in ethical rules, efficient communication between the home and host bar
associations, the problem of the impact of a disciplinary action taken by a
home bar on the position of the lawyer in the host bar and vice versa, and
others.
Mr. Stefáni believes it is most important for the client to get good legal aid
which he/she can mostly get from local lawyers rather than from big
foreign legal firms.

Discussion

Following a question by a representative of Latvia the speakers underlined that

the obligation to keep the register of legal advisers in Hungary and to organise
the tests of foreign lawyers in the Czech Republic rests with the respective bar
associations.

A representative of the Ministry of Justice of the Czech Republic pointed

to potential problems resulting from the implementation of the so called
second directive after the accession of the country to the European
Union. The directive stipulates an unlimited automatic right of foreign
lawyers to work in other member countries. The presenters believed the
implementation of such principles would be affected by natural correctives,
such as language barriers, etc., and their application would depend on
removing the barriers.

Mr. Mustafa Bozcaadeli, Turkey, expressed concern about the competition of

big foreign firms and the subsequent loss of clients for local lawyers and firms.
Similar concern was expressed by the representative of the Ukraine who put a
question of whether measures should not be taken to limit the establishment
and influence of such firms in the national legal profession.

The presenters Mr. Stéfani and Mr. Šolc and other participants in
the discussion Mr. Fish, Mr. de la Bretesche and Mr. Rayner said that
the development should be seen as the natural consequence of globalisation
in all fields which could not be stopped by building any artificial barriers or
obstacles. The only way for coping with the development is the
competitiveness of local firms. It was pointed out that even in the US
most lawyers worked as individuals and big law firms usually did not accept
civil or family cases. The point was mostly in competition in commercial cases.

Mr. Anczyk, Poland, gave information about the Polish legislation in this
respect. It is not a condition of establishment for a foreign lawyer to be a Polish
citizen but he/she must present an equivalent diploma and prove his/her
language skills.

Mr. Fish, Ireland, outlined the issue of monitoring lawyers’activities both in the
home and host countries.

Mr. Rayner, the U.K., pointed out that most clients were not global giants and
the laws and bar associations had to aid smaller lawyer firms as well.

The discussion on this and the following topic was chaired by Mr. John Fish.
Topic III.

Multidisciplinary partnership

The main presentation on this topic was presented by Ms. Petra Heinicke from
st
Munich. She spoke of three main approaches. The 1 one is the impact of the
multidisciplinary partnership on the traditional concept of a free and
independent profession with a substantial corporate spirit. The list of
professions and activities incompatible with the profession of a lawyer differs in
various countries and reflects the varying perception of the lawyer’s
profession and the varying techniques of accepting rules, as can be
found in the comments to the CCBE lawyer’s conduct code. It is, therefore,
important to be open and critical when we talk about different and common
nd
traditions and their influence on our approach to the issue. The 2 one
is the client-lawyer relationship. From this point of view it is most
important that all the rules of multidisciplinary partnerships comply with the
basic principles governing such a partnership. A safe and simple way to
achieve this objective is to oblige the partners from other professions to
apply the rules of conduct valid for lawyers
and vice versa. It is impossible to allow for weakening our basic principles, i.e.
namely the principle of trust and rules regulating the conflict of interests. The
rd
3 one is the economic aspect initiating a lot of questions. Market is the core
term. When we consider rules for the multidisciplinary partnership we should
not focus on the issue of whether the partnership is meaningful or not because
it is up to the market to reply to this very question. It is important to respond in
time because the world around us is changing quickly and the needs of
our clients and the range of potential clients is changing with it.

The problem may be solved by a liberal opening of the market governed

by balanced regulations and constraints ensuring the untouchable principles and,
in parallel, by providing room for creativity of those lawyers who consider a
potential multidisciplinary partnership.

Discussion

Mr. Šolc, Czech Republic, said the problem had not been legislated yet but the
resolution was being prepared for the up-coming congress of lawyers and
it should become a basis for the legislation and treatment of the problem.

Mr. Lucet, France, said no legislation of the issue existed in France. The ethical
code defines what is compatible and what is not and it reflects the
reality in society. The law did not allow for such an association.

Mr. Adell, Spain, said it was necessary to consider how to potentially face the
already existing situation.

The Portuguese representative indicated that a similar problem was discussed

at the IBA Congress in New Delhi, India.

Mr. Thoroddsen, Island, pointed out the need for positive outcomes and
approaches. The client is often more interested getting more advice in
one building than the confidentiality of information.
 Mr. Fish, Ireland, spoke of the need to maintain the independence of the
profession and non-interference with the basic principles by other professions.

Topic IV.

Publicity: publicity of legal services and its different forms

Mr. Stanislav Balík from Prague, Mr. Jorge Adell from Barcelona and Mr.
Stephen Rayner from London were the presenters. It was said that the
development in the field was rather revolutionary, from complete prohibition to
complete freedom in using publicity and advertising. At the moment the
legislation in this respect very much differs. This is reflected in the
CCBE ethical code, Art. 2.6, which reflects local differences and offers
guidelines for lawyers’conduct in personal publicity. It has been stated that the
development cannot be stopped and an adequate response is required and
reasonable rules should be set for local conditions.

Discussion

Mr. Huydecoper touched on the problem of the ”ideological publicity” and

its regulation with the aim to prevent the political or social abuse of the
lawyer’s work.

Mr. Fish, Ireland, pointed out the desirability for the profession to set the rules
itself to prevent any surprises from outside as it had happened in Ireland.

Mr. Mirzojev, Russia, also joined the discussion with more general comments
on the situation in the so called post-Soviet area, i.e. namely Russia. He said
substantial democratisation had been achieved, the lawyer’s profession had
become a part of the constitutional system and the principles of fundamental
human rights and freedoms were promoted though the profession was still
governed by the law adopted in 1980. Internal rules, however, were
created under which the lawyers themselves decided they would apply the
CCBE ethical rules. Three years ago the Government by its ruling established
the so called First Academy of the Lawyers’Profession. The profession is
organised
in a classical way, i.e. from individual lawyers to big legal firms. The
top authority for the profession in Russia is the so called Gilda.. There is a
common qualification commission which decides about the admittance to
the bar of a lawyer after two years of work experience and passing an
examination that includes ethical issues. At the moment the most debated
issues are the conflict
of interest, protection of confidentiality, publicity and, first and foremost,
the drafting of a new law on the profession which assumes the setting up of
bars and lawyers’council. The Russian lawyers co-operate and have contacts
with other countries, with international organisations of lawyers and
individual national organisations.
The publicity issue was mentioned by the Cyprus representative who spoke
about the institutional publicity of legal firms. Based on the U.K. experience Mr.
Rayner pointed out that caution and sensitivity were needed and, if possible,
the opinion of the bar members should be checked in order to prevent
their future disapproval with the activity.

Mr. Adell, Spain, added that sometimes it was necessary for the bar to approve
such publicity with respect to the situation, e.g. the risk of other
professions’ competition, etc. Statements by lawyers in the media are also
sensitive in this respect.

Mr. Balík, Czech Republic, raised a question whether publicity of a public

institution, i.e. the Bar Association, was at all possible. Mr. Rayner illustrated
the situation by an example from the U.K. when banks received the authority to
write testaments. Then the Law Society launched a campaign to support
solicitors. In general, however, it is necessary to respect the opinion of the bar
members on such an activity.

Topic V.

Client’s funds

The topic was sub-divided into the three following sub-topics:

1. Ascertaining the origin of the client’s funds;

2. Retention of the client’s funds;
3. Refund/repayment of the client’s funds.

The main presenters of the topic were Mr. Ladislav Krym, Czech Republic, and
Mr. Alain de la Bretesche, France. Mr. Krym in his presentation
compared, among others, the rules governing the issue in the European
Union with the professional ethics rules adopted by the Czech Bar
Association in 1996. The comparison indicated that the Czech legislation was
more general and many rules on managing the client’s funds by lawyers
had to be defined through interpretation or by using related legislation.
Under the Czech legislation any increase in the client’s funds managed by
the lawyer belong to the depositor, i.e. the client. Mr. de la Bretesche
summarised the principles underlying the approach to the client’s funds
according to the ethical code of lawyers in the European Union, the related
European charter of professional association on the combat with the
organised crime and a follow-up to the CCBE declaration
nd
of July 2 , 1999. He also mentioned the proposal to amend the 1991 Directive
on the abuse of a financial system for money laundering. In this respect
he
mentioned the French CAPRA system (Caisse de Réglement Pécuniares)
which had been recommended to the other European bar
associations because it allowed for the client’s funds management in
compliance with the CCBE rules. The principle governing client’s
funds management is the realisation that the client’s funds are
someone else’s funds and the lawyer cannot be tempted to use them.
 Discussion

Mr. Huydecoper mentioned the need to identify the origin of the client’s funds
in case of a slightest doubt. The lawyer should be able to identify the purpose
and source of the planned transaction and, if need be, express his/her
reservations. The training of young lawyers and clercks is very important in this
respect.

The discussion on topics IV. and V. was chaired by Mr. Károly Stefáni from
Budapest.

Topic VI.

The exercise of the profession of lawyers with regard to the principles of the
European Convention on Human Rights

The topic was subdivided into two parts:

1. Money laundering versus the confidentiality required in the

profession;
2. Organised crime versus the ethics of the profession.

Mr. Marian Anczyk, Poland, and Mr. John Fish, Ireland, were the main
presenters on the topic. Mr. Anczyk stressed the need of respecting the
principle of confidentiality in the profession with relation to money laundering
and organised crime because it is impossible to allow any interference
with these basic principles of the lawyer’s profession from outside. The
preventive measures against a potential abuse of the profession for the above
mentioned purposes or involving a lawyer in a crime should be approved by the
profession
in its own interests and in the interests of the clients, general public and
society. When some countries adopted or attempted to adopt regulations
obliging the lawyers to abuse the confidentiality principle, they grossly
interfered with the principles of the lawyers’profession and law and order. In
this respect it could be considered whether to add to the Convention on Human
Rights a right for defence combined with the principles of trust and
confidentiality. Mr. Fish developed the topic in his presentation as he spoke
about other risks linked with this approach, i.e. risks to public interest, judiciary
administration, the right of the clients to have access to justice, and the right of
the lawyer for protection against self-incrimination. In the CCBE drafts are
being prepared for the European Commission which assume the integration of
measures into the individual internal bar association codes that would
complicate the actions of potential launderers. Among others, it is a provision
on stricter checks on the client’s funds’origins and on disciplinary actions filed
for violating the provisions on protecting the profession against money
laundering. It would be a way for preventing the criminal elements from abusing
the lawyers’ profession. It is important that the European Commission has
already accepted the CCBE proposals under which the bars and law societies
should play a significant role in the combat against money laundering. In case
of an action against a lawyer for his/her failure to meet the obligation under the
money laundering regulations it could be easily argue that the required
obligations, in the relationship to the client or to himself/herself, are in
 contradiction with the Convention on Human Rights. In such a case he/she
could ask a court for a ruling on the compatibility of such measures with the
Convention.

Discussion

The above approach and procedure of lawyers to the problem of money

laundering and organised crime was fully supported by Mr. Stéfani from
Budapest.

Mr. Lucet, France, also stated that effective means against a potential abuse of
the profession for such purposes and against infiltrating of the organised crime
into the profession should be looked for inside the profession and he also
stressed the role of training for this purpose. It is important to have an effective
system for handling the funds, such as the French CARPA. Should the lawyers’
organisations manage to adopt such convincing measures it would be easier to
face any pressures from outside. Mr. Fish reaffirmed this concept. Mr. Rayner,
UK, believed such approaches were utopian in view of the situation and
draconian interference with the rights of lawyers in the UK and he could
imagine the profession in the UK would approach the Council of Europe and
the European Court for Human Rights. The Cyprus representative also fully
supported the above privileges of the lawyers’ profession. It would also be
important to identify crimes to which the special obligations and regime would
apply. As Mr. Fish said it would be up to the lawyer whether he/she would
apply the privilege in a specific case because it is a rather elastic area. The
problem of the protection of witnesses and crime victims and the system of
anonymous or ”reformed”witnesses had been discussed. According the Mr. de
la Bretesche the problem would have to be discussed though it might be just a
fashionable trend that usually disappear. Mr. Huydecoper said that
the European Court for Human Rights had already ruled in such cases and
some governments had been found guilty for using such witnesses. The
system could not be totally eliminated but exact limits for its application
should be defined. The Ukrainian representative pointed to another
approach to the problem from what might be called an Eastern position. She
believed that too broad a definition of the organised crime opened
possibilities for the abuse of the profession and saw the solution in an ethical
code which would oblige the lawyer to refuse a client when he/she had a
suspicion of an illegal intention but with no duty to report such a client.

According to Mr. Anczyk, Poland, even the refusal of a client could be seen as
a denunciation. The Portuguese representative fully supported the principle of
confidentiality in a lawyer’s work and said that the lawyer must identify the risks
and draw conclusions. Mr. Hanslik, Austria, believed the client needed to trust
his/her lawyer. Rich people could not automatically be seen as suspects. The
Turkish representative raised the question whether the potential obligation
to report suspicious transactions imposed on lawyers could effectively
prevent money laundering or help its prevention. A clear no and never was
presented by Mr. Fish. Mr. Karaminkov, Bulgaria, gave information on the
money
laundering act in which lawyers were not mentioned and they were not obliged
to act as witnesses in their cases because they could be turned into informers.
Mr. Anczyk and Mr. Fish spoke about the problem of the lawyer doing some
acts as a notary. According to Mr. Fish the lawyer’s profession should be
seen
as a whole and no activity which might potentially be subject to the reporting
obligation should be separated from it. Governments attempted to do it
but such an approach could not be accepted.

The discussion on point VI. was chaired by Mr. Stanislav Balík.

Conclusions

It could be said that the wind of reforms did not end in 1997 and it is obvious it
will accompany the lawyer’s profession into the third millennium.

Therefore, it is necessary to thank the organisers from the Council of Europe

and this time from the Czech Republic and the future organiser, Island, and last
but not, least all speakers, participants in the discussion and others present at
the meeting.

The meeting was very valuable because it dealt with priority problems of
lawyers common to all the Council of Europe member countries irrespective of
their geographical position, political development or traditions. They differed in
the opinion on the best possible solution in specific cases but they agreed on
the existence of the present and future treatment of the problem which
will prevail in the future.

The meeting approved conclusions that are presented separately.

The meeting was closed by words of thanks by the President of the Czech Bar
Association Mr. Karel Cermák.
Conclusions

The participants in the multilateral meeting on "the ethics of lawyers",

held in Prague from 3 to 5 November 1999 in co-operation with the Czech Bar
Association, as part of the Council of Europe's programme of legal co-
operation activities for the development and consolidation of democratic
stability:

Considering that the independence of the judiciary vis-à-vis the

legislative and executive remains the cornerstone of the rule of law;

Being aware of the provisions of the European Convention on Human

Rights and the case-law of its organs, and of the Convention on
Laundering, Search, Seizure and Confiscation of the Proceeds from Crime
(ETS No. 141, Strasbourg, 8 November 1990);

Having regard to Recommendation No. R (81) 7 on measures

facilitating access to justice, Recommendation No. R (93) 1 on effective access
to the law and to justice for the very poor, and also referring to the Council of
Europe's work on the effectiveness and fairness of civil justice and legal aid;

Observing that, by reason of the nature of their work, lawyers

are governed by a code of ethics designed to cover all the duties to be fulfilled ,
and also by rules of conduct guaranteeing respect for certain moral obligations,

The participants noted the following points of agreement and adopted the
following conclusions at the end of the meeting:

Theme No. 1: The role of lawyers: legal and moral obligations towards
their clients, their own profession, the courts and the
public (in particular questions relating to legal aid)

"Everyone has the right to liberty and security of person." (Article 5 of

the European Convention on Human Rights). This guarantee includes, among
other things, individuals' legal security. Lawyers have to play an essential role
in the administration of justice and in safeguarding human rights and
fundamental freedoms. In order to carry out their work in a wholly independent
manner, it is vital that there should be no pressure on them, particularly
with regard to their duty of professional secrecy of which they have the deposite
whatever the origin. Consequently, they should have a number of legal and
moral obligations towards the following parties:

Towards the client

The primary function of lawyers is to defend their clients' legitimate

interests to the best of their ability. In order to do so there must be mutual trust
between them and their clients. The duty of loyalty towards their clients must have
priority, so that a lawyer's other duties, in the event of a conflict of interests, are
subordinate to this main duty.

Lawyers must not withdraw from a case if their withdrawal might

place their client in a dangerous situation (for example if the client cannot
immediately find another defence counsel).

Lawyers should, wherever possible, decline to represent a client if their

workload is such as to prevent them providing an effective and high
quality defence . The same applies if the lawyer's professional skills are
inadequate to the task in hand or if there are other impediments.

Lawyers should scrupulously avoid conflicts of interest that might

jeopardise their independence or the confidentiality of the case.

Towards their own profession

Subject to the supremacy the client's interests, lawyers should maintain a

relationship of trust and loyalty with other members of their profession.

In order for hearings to proceed properly and to represent properly

the clients, lawyers taking part in proceedings should have no direct contact
with the other party, save with the agreement of the colleague responsible for
conducting the other person's case.

Lawyers should endeavour to settle cases friendly and

avoid unnecessary litigation, subject to their duty of serving their clients' interests
fairly.

Towards the courts

Lawyers must observe the rules of conduct of the court in which they
appear and show respect for the office of the judge.

Lawyers should deal with cases without undue delay while at the same
time pursuing their main aim, ie to represent their clients.

Towards the public and the administration of justice

The proper administration of justice requires respect for the principle of

access to justice for all, as set forth in Article 6 of the European Convention on
Human Rights. In order to achieve this aim, lawyers are under an obligation to
inform the public of the existence of legal aid and advise for the poor.

Respecting for the adversarial nature of proceedings, lawyers must

ensure that every document in the file is made available both to the judge and
to the parties. They must on no account knowingly provide the court or
the other parties with erroneous information.

It would appear desirable for national codes of conduct to

be harmonised, particularly with regard to the pactum de quota litis rule
still in force in most member states of the Council of Europe.
 Although lawyers have the right to freedom of expression, they should
show a measure of restraint in their relations with the media.

Theme No. 2: Establishment of foreign law firms

1. Observance of the rules of bars in host countries and setting up

practice in other states

There is a strong tendency towards international harmonisation of the

profession of lawyer. It is desirable that member States should give foreign law
firms the right to set up in the host country under certain conditions. In order to
avoid any anarchical settlements, it is however acceptable to require
foreign lawyers:

- to satisfy the relevant legal conditions, which may include a

restriction on the scope of their activities;
- to register formally with the bar of the host country;
- to respect the code of conduct in the host country.

When a lawyer from another country sets up practice, the bar of the
host country should inform the country of origin; it should also inform it of the
closure of a practice. The country of origin should also provide such
information.

Member States are asked not to discriminate against foreign law firms.

Lawyers who have set up business in a foreign country and

infringe
that country's rules of conduct should be subject to the disciplinary procedure
of the bar association in the host country, which should inform the national bar
association in the lawyer's country of origin and vice-versa.

2. Partnerships

Member states should wherever possible facilitate the establishment of

foreign law firms. It is desirable that the latter set up business in partnership
with national lawyers, as this would guarantee co-operation between member
states.

3. Co-operation among lawyers from different member states

In the interests of the proper administration of justice,

lawyers representing clients in a country other than their country of origin must
have the professional competence required to handle the case. If not, they
should either co-operate with a lawyer in the country concerned or give their
client the name and address of a competent lawyer.

Lawyers co-operating at international level must ensure that account is

taken of the differences between the legal systems of the countries in question
so as to safeguard their clients' rights.
4. The corporate spirit of the profession

Lawyers should show respect and loyalty towards other members

of the profession and maintain good relations with lawyers from other
member States.

Theme No. 3: Multidisciplinary partnerships

Some European countries have multidisciplinary partnerships, whereas

others do not allow this type of concentration of activities. Each country should
retain the right to take the measures required to safeguard the independence of
the profession and avoid conflicts of interest. Partnerships with members
of other professions, such as architects, engineers and doctors, could
be envisaged, according to the needs of the profession of lawyer.

The various existing professions may be governed by different

rules. The legal security of "justice users" should be protected, particularly in
terms of confidentiality among the different professions concerned. It is
desirable for all partners to understand the ethics of each profession
concerned, and the idea
of an additional code of conduct for multidisciplinary partnerships should be
explored.

Theme n° 4 : Publicity : publicity of legal services and its different forms

Publicity/Advertising of legal services has now become inevitable and bars that
have traditionally prohibited such publicity are now being obliged to
change their traditional positions because of:

1. Internationalisation of legal services

2. The arrival of Internet and e-commerce as a new means of
publicity and provision of legal services
3. Growing harmonisation of commercial law both formally and
practically
4. Illegality of prevention of advertising because of competition laws
and Human Rights (Article 10)
5. Defence of bars against competition from non lawyer
organisations advertising legal services.

Some regulation is desirable to prevent abuse eg. misleading advertising.

Such regulation is presently made of domestic bars, but international co-

ordination is desirable to avoid conflict in standards: eg. if CCBE and
IBA Codes being adopted by domestic bars.

Publicity of legal services creates a benefit to the potential client to the extent
of choice of the right expert and advance knowledge of cost.
Theme No. 5: The client's funds

Lawyers should refuse to accept any funds that are not received
directly from a clearly identified individual or legal entity or which are intended,
pursuant to a legal or judicial decision, for a clearly identified person.

The account into which these funds are paid should be quite separate
from the lawyer's personal account or the firm's account.

The clients' funds should be payable on sight and only be retained for
the length of time strictly necessary.

National bars should be recognised by national legislation as the

authorities responsible for strictly supervising the implementation of these rules
and for taking appropriate disciplinary measures.

A national or regional professional organisation set up by the bar could

be made responsible for the direct or delegated management of all
clients' accounts.

The bars, which are guarantors of the ethics of legal defence

and advice, should ensure that the laws on money laundering of the
proceeds of crime are enforced with regard to identification of the origin of
funds, with due respect for the lawyer's duty of confidentiality to a clearly
identified client.

Theme No. 6: The exercise of the profession of lawyer with regard to the
principles of the European Convention on Human Rights

1. The problem of money laundering and the confidentiality of

the profession

At the multilateral meeting held in Budapest in December 1999 on

"the role and the responsibilities of the lawyer in a society in transition", all the
representatives of national bars expressed concern at the undermining of
confidentiality through the numerous statutory exceptions. As is stated in the
CCBE's declaration of principle on the confidentiality of lawyers and
money laundering legislation, professional secrecy is a fundamental right which
makes
a relationship of trust with the client possible. Confidentiality of
discussions between the client and his/her counsel can prevent certain
illegal activities. The decision to betray a client's confidence should only be
taken by lawyers themselves on the basis of their conscience, and there
should be no judicial procedure under which lawyers can be obliged to
breach confidentiality. In cases of abuses , there should be the
possibility of disciplinary proceedings and criminal sanctions, governed by
strict rules, against the lawyer in question.

2. The problems arising from organised crime and ethics of the profession
of lawyer
Bar Associations and their members need to recognise that criminal elements,
given the opportunity, will attempt to avail of the legal services provided
by lawyers in relation to financial transactions.

The activities of lawyers who knowingly collude with, or participate in organised

crime or who permit the cloak of confidentiality to conceal the activities
of organised crime, cannot under any circumstances be condoned.

As a consequence, lawyers have a need to ensure that high standards

of integrity, care and prudence are exercised regarding the bona fides of
their clients. To that end, Bar Associations should consider the introduction
(if not already in place) of procedures regarding the identification of
clients and control of funds, thus making it more difficult for criminal
elements to use the services of lawyers for criminal purposes.

Nevertheless, it is noted that significant political pressure is being brought to

bear to introduce procedures whereby lawyers will be made subject
to obligations of disclosure of information to the authorities regarding
suspicious transactions without the consent or knowledge of clients, other than
where the representation of a client in legal proceedings is concerned.

Deep concerns were expressed that any obligation imposed on lawyers

to report information to the authorities without the consent or knowledge
of the client, would constitute an irreversible breach of the principle of
lawyer/client confidentiality which, in addition to representing a core
value in the lawyer/client relationship, also constitutes an essential
element in the proper administration of justice.

Furthermore, any breach of this principle could lead to an infringement of the

rights of individuals of access to justice and against self-incrimination in
accordance with the jurisprudence of the European Court of Human Rights.

Accordingly the implementation by member States of anti-moneylaundering

measures should take place in conjunction with Bar Associations in a manner
consistent with the rights of individuals in accordance with the European
Convention on Human Rights and so that any such measures shall not conflict
with the core value of lawyer/client confidentiality.
Programme

Wednesday 3 November 1999

14h 30 Opening of the meeting

- Mr Karel CERMÁK, President of the Czech Bar Association

- Mrs Nathalie WAWRZYNIAK , Programme Adviser, Directorate
of Legal Affairs of the Council of Europe

Chair : Mr Karel CERMÁK, President of the Czech Bar Association

15h 00 The function of lawyers : the legal and moral obligations towards their
clients - their own legal profession - the courts - the public (in particular
questions relating to legal aid)

Rapporteurs: Mr Jirí NYKODÝM, lawyer, Prague, Czech Republic

(the courts - the public (in particular questions relating to

legal aid)

Mr Tony HUYDECOPER, Lawyer, President of the PECO

Committee – CCBE, Den Haag, The Netherlands

(the legal and moral obligations towards their clients - their

own legal profession)

16h 30 Break

17h 00 Round Table with the participants

19h 30 Dinner organised by the Czech Bar Association at Brevnov

Monastery

Thursday 4 November 1999

Chair : Mr John FISH, Lawyer, Arthur Cox, Ireland, Representative of

the CCBE

09h 30 Establishment of foreign law-firms :

1) the respect of the rule of other Bars and Law Societies and
the establishment in other States
2) the partnership
3) the co-operation among lawyers from different member States
4) the corporate spirit of the profession
 Rapporteurs :

- Mr Martin ŠOLC, Lawyer, Karlovy Vary, Czech Republic (points 1

and 4)
- Dr Károly STEFANI, Lawyer, Budapest, Hungary (points 2 and 3)

10h 30 Break

10h 45 Round Table with their participants

11h 30 The multidisciplinary partnerships

Rapporteur : Ms Petra HEINICKE, lawyer, Münich, Germany

12h 00 Round Table with the participants

13h 00 Lunch

Chair : . Dr Károly STEFANI, Lawyer, Budapest, Hungary

14h 30 The publicity : publicity of legal services and its different forms

Rapporteurs :

- Mr Stanislav BALÍK, Lawyer, Prague, Czech Republic

- Mr Jorge ADELL, Lawyer, Barcelona, Spain
- Mr Stephen RAYNER, Solicitor, London, United Kingdom

16h 00 Break

16h 30 Round Table with the participants

17h 00 The client’s funds :

1) ascertaining the origin of the clients’funds

2) retention of the clients’funds (accounts, etc)
3) refund/payment of the clients’funds

Rapporteurs :

- Mr Ladislav KRYM, Lawyer, Prague, Czech Republic

- Mr le Bâtonnier Alain DE LA BRETESCHE, Laval, France

18h 00 Round Table with the participants

Friday 5 November 1999

Chair : Mr Stanislav BALÍK, Lawyer, Prague, Czech Republic

09h 30 The exercise of the profession of lawyers with regard to the

principles of the European Convention on Human Rights :

1) the problem of money laundering and confidentiality of this

profession
2) the problem arising from organised crime and the ethics of
this profession

Rapporteurs :

- Mr Marian ANCZYK, Vice-President of the Polish Bar

Association, Warsaw, Poland
- Mr John FISH, Lawyer, Arthur Cox, Dublin, Ireland,
Representative of the CCBE

10h 30 Break

11h 00 Round Table with the participants

12h 30 Lunch

Chair : Mr le Bâtonnier Alain DE LA BRETESCHE, Laval, France

14h 00 Report of the General Rapporteur

- Mr Milan KOSTOHRYZ, Lawyer, Prague, Czech Republic

15h 00 Discussion with the participants

15h 30 Break

16h 00 Presentation of the Conclusions of the meeting and discussion

with the participants

17h 00 End of the seminar