Following on the federal government's decision to repeal the Part 1 regulations, in late April 2003 the parties to the constitutional challenge consented to an adjournment of the challenge to November 2004. This adjournment, filed by consent in BC Supreme Court on April 15, 2003, states that the Attorney General has agreed to reimburse the parties for all "costs thrown away" in relation to all proceedings for interlocutory relief across the country, including all appeal processes.

Despite relieving lawyers from Part 1 of the PCMLTFA, the federal government says it still intends for Canada's anti-money laundering and anti-terrorist financing regime to cover all entities that act as "financial intermediaries," including lawyers and law firms. The federal government has, however, agreed to consult with the Federation before enacting the new regulations. If those new regulations are unacceptable to the Federation or other parties involved in the constitutional challenge, the federal government has agreed to defer their enactment and consent to injunctions exempting lawyers and Quebec notaries from the PCMLTFA until the constitutional challenge is resolved. This agreement applies to appeals to the BC Court of Appeal and the Supreme Court of Canada if necessary.

Lawyers remain subject to the provisions on cross-border movement of currency and monetary instruments under Part 2 of the PCMLTFA, which took effect in January 6, 2003. These regulations require specified persons to report the importation or exportation of amounts of $10,000 or more of currency or monetary instruments in bearer form.

There are several parts to section 12(3) of the PCMLTFA, the section that indicates who is required to submit cross-border transaction reports on reportable cross border transactions. The different parts of this section deal with the different ways in which currency or monetary instruments can exported or imported from Canada (by mail or courier, physically carried etc.).

Legal advice provided to the Federation of Law Societies indicates that, where a lawyer is involved in a reportable cross-border transaction on behalf of a client, under ss. 12(3)(b)-(e), it is the client that is obligated to report the transaction, not the lawyer. This is the case as under these parts of s. 12(3) it is the client, not the lawyer, that is considered the exporter or importer, and it is the exporter or importer that is specified as the person who is obligated to report. While it is the client who has the obligation to file the report in these circumstances, the lawyer may do so as a service to the client if so instructed.

The advice provided to the Federation indicates that pursuant to s. 12(3)(a), lawyers would be required to report cross-border transactions only if they physically carry currency or monetary instruments across the border on behalf of a client. In all other cases reporting is the client's obligation.

Practically speaking, very few lawyers will engage in the types of cross-border transactions that are reportable under this legislation. This new interpretation makes it even less likely that lawyers will engage in a cross-border transaction that they must report under this legislation.

Note, under this legislation there is no requirement that lawyers report cross-border transactions involving bank drafts or cheques or other negotiable instruments made payable to a named person, and which have not been endorsed. Lawyers are not required to report cross-border electronic funds transfers they are involved with through banks (banks may report these EFT transactions).

For more information on the constitutional challenge, see the Federation of Law Societies Web site at http://www.flsc.ca/en/committees/moneylaundering.asp

Managing the Lawyer/Client Relationship
Most claims arise out of fundamental failures in the lawyer/client relationship - failures such as inadequate client-case screening, poor communication and insufficient systems, trails and record-keeping. Learn how to better understand and manage the critical dynamics of your interaction with clients and reduce your risk of a claim. Click here to download this booklet (PDF format, size: 208KB).

Managing Conflict of Interest Situations
Conflicts of interest represent the second most frequent cause of claims made against lawyers. Find out how to better manage this risk by identifying, checking for and managing conflict of interest situations. Click here to download this booklet (PDF format, size: 242KB).

Managing the Practice of Investing in Clients
The practice of lawyers investing in clients' businesses is current and growing. Past experience with this type of activity (which includes taking equity positions in the form of shares of stock) has taught us that this practice raises significant issues which need to be managed. Find out about the issues you should consider before engaging in the practice of investing in clients. Click here to download this booklet (PDF format, size: 185KB).

managing a MENTORING relationship Booklet
This new booklet provides advice on how mentors and mentees can make mentoring relationships more productive and successful. Click here to download this booklet (PDF format, size: 164KB).

managing practice INTERRUPTIONS Booklet
Accidents or disasters that have the potential to interrupt or destroy a law practice come in many forms. Foresight, along with some planning and preparation beforehand is critical to minimizing the impact of any accident or disaster, large or small. This new booklet provides a comprehensive review of the steps you can take to prepare for unexpected minor and major practice interruptions. Click here to download this booklet (PDF format, size: 152KB).

managing the finances of your practice Booklet
Taking an active role in managing the finances of your practice is key to building a successful law practice. This new booklet reviews the steps you can take to better manage the finances of your practice, and touches briefly on some of the longer-term financial planning issues involved in winding up a law practice. Click here to download this booklet (PDF format, size: 171KB).

Lawyers now exempt from Part 1 of proceeds of crime legislation, but not Part 2
Ontario lawyers are now exempt from Part 1 of the PCMLTFA (the obligations to record and report suspicious and large cash transactions, and to implement a compliance regime). Lawyers are not exempt from the cross-border reporting obligations imposed by Part 2, which will be implemented sometime later this year. Click here for more details.

Significant Stats:
Almost 8% of LAWPRO claims are caused by a failure to calendar
Although it is one of the easiest errors to prevent, simply failing to keep a proper calendar is one of the most common causes of LAWPRO claims. In the last 12 years, 2,335 claims – 7.6 per cent of all claims reported – have been attributed to this error. Costs and indemnity payments to deal with these claims will total just over $38 million.

As noted above, this error is very easy to prevent. Everyone should have proper tickler systems in place. You should identify time deadlines, follow-ups and reminders. Establish a system for checking the accuracy of information inputs. Keep a backup system as a safety net. Calendar every case, not just litigation matters.

For a more detailed review of what you can do to prevent this error, and others like it, visit www.practicepro.ca and download the managing the lawyer/client relationship booklet. It will help you avoid making this mistake, and build a better relationship with your client.

Lawyers and law office staff will be statutorily obliged to report suspicious transactions starting November 8. Compliance with other parts will be required in three or more phases over the next 4-12 months. Training staff and preparing your practice will take a great deal of work: If you have not already started to prepare to comply, you should start immediately.

LPIC has undertaken several initiatives under its practicePRO banner to help lawyers meet the onerous obligations placed on them by this legislation.

• Our 45-page Web-based Guide contains a detailed step-by-step review of the obligations imposed by this legislation. This Guide is dynamic and will be updated as this legislation is implemented. An extensively updated Version #3 of the Guide was just released. To date more than 1,000 lawyers have downloaded this Guide.
• In conjunction the Law Society of British Columbia a sample compliance manual has been prepared. It is designed so that lawyers will be able to easily adapt it for their firms and to use it for staff training.
• As well, practicePRO is offering an email news service that is providing current information to all interested individuals. This service provides regular updates by email of current news and information on this legislation. Almost 500 lawyers have subscribed to this service.

Go to the practicePRO website at www.practicePRO.ca to download the detailed Guide or the compliance manual, and to subscribe for the email news service.

Again, please immediately start your work to comply, and remember to use these helpful tools from practicePRO in your efforts to do so. They will save you many hours of work.

Law association presentations
Over the last few months, practicePRO director Dan Pinnington has visited more than a dozen law associations to explain the money laundering act and its implications for lawyers. Many more presentations are planned for the next several months. Watch your local association newsletter for details of a presentation in your area. To book Dan, send an email to pinningd@lpic.ca or call 1-416-596-5863.

The guide is the major element of a comprehensive program launched by LPIC to assist lawyers in dealing with the new Proceeds of Crime (Money Laundering) Act (PCMLA). The four-part program consists of:

1. an eight-page bulletin which provides lawyers with an overview of the key obligations they face under the Act. Copies of the bulletin were mailed to all lawyers in mid-May;
2. a detailed Web-based Guide that reviews obligations under this legislation. Go to www.practicepro.ca/mlguide.asp to download version #1 of this Guide. The statement of the law in version #1 is current to May 17, 2001. The Guide will be updated regularly to reflect changes in the Act, Regulations and Guidelines over the next 12-18 months;
3. a Draft Compliance Manual, being jointly produced by LPIC and the Law Society of British Columbia. This manual, which will assist law firms in implementing a compliance regime, should be available for download from the practicePRO website by late June;
4. an e-mail news service, to which lawyers can subscribe to receive notification of updates to the Web-based Guide or other news relevant to the proceeds of crime legislation. Go to www.practicepro.ca/mlnotice.asp to subscribe to this list.

October deadline looms
Although the exact timing remains uncertain, lawyers could be required to have a compliance regime in place and to commence reporting suspicious transactions as early as October 2001.

Employed lawyers may be exempt
Contrary to earlier interpretations (and to what is stated in the bulletin), it now appears that many in-house counsel and other employed lawyers are not in fact caught by the provisions of the Act. This is discussed in more detail in the section of the Web-based Guide titled What "Legal Counsel" Activities Trigger PCMLA Obligations.

Solicitor-client privilege issues
Under the PCMLA, communications protected by solicitor-client privilege is given full protection in some circumstances, and no protection in others. As well, you must fully disclose information that has traditionally been treated as "confidential" in the solicitor-client context . Advisory Services at the Law Society of Upper Canada has posted a document on its website that reviews the issue of solicitor-client privilege and confidential information. It is available at www.lsuc.on.ca/pdf/laundering.pdf

On May 23, 2001 the Federation of Law Societies passed a resolution to take steps to deal with these problems. It is available at www.flsc.ca/english/publications/resolution2001moneylaundering.htm

The Federation is seeking to delay the proclamation of the PCMLA to enable it to express its concerns to the federal government, and to seek amendments to address these concerns. Ultimately it will review the possibility of mounting a constitutional challenge of the relevant sections of the PCMLA if necessary.

The full text of both the bulletin and Web-based Guide are available online through the practicePRO website at www.practicepro.ca/mlguide.asp

practicePRO throws support behind innovative conferences & CLE initiatives
As part of its program of partnering with the legal community to deliver innovative CLE opportunities, practicePRO will support the following innovative programs in the coming months.

CBAO Institute 2001: February 1-3, 2001
practicePRO will again be a sponsor of the CBAO's annual Institute of Continuing Legal Education: In keeping with its emphasis on Wellness and Balance for 2001, practicePRO will participate in the "Healthy, Wealthy and Wise" breakfast programs put on by the Ontario Bar Assistance Program (OBAP), and will exhibit at the Institute's trade show. More information on the CBAO's annual CLE event will be available in the next issue of LPIC: News, scheduled for November 2000.

Investing in Clients? LPIC issues guide to managing the issues involved
LPIC’s new Managing the Practice of Investing in Clients booklet provides an overview of the key issues to consider and helps lawyers manage this practice in a risk-averse way.

Walkerton Compensation Plan Checklist
This checklist is designed to assist lawyers providing independent legal advice respecting the Walkerton Compensation Plan. It replaces any previous ILA checklist provided by LPIC prior to October 27, 2000.

The checklist available earlier on this website should be disregarded and not used. LPIC has revised its earlier checklist as a result of being provided with the revised Compensation Plan which we understand to be the Plan under which compensation will now be offered.

The revised Plan information became available on October 30, 2000, after the initial checklist had been issued. The revised Plan implements the October 4, 2000, press release of the Attorney General. The wording of the revised Plan and related documentation has removed a number of LPIC's earlier concerns, and our previous comments about the Plan should be ignored. LPIC apologizes for any confusion that may have been caused.

LPIC encourages lawyers to refer to the revised checklist when providing independent legal advice respecting the Walkerton Compensation Plan. In providing this checklist, LPIC is attempting to proactively provide risk management advice to its insured lawyers.

LPIC believes this checklist is sufficient to accommodate any further revisions to the Plan and related documentation that may be made.

However LPIC urges lawyers to satisfy themselves as to the precise wording of all documents at the time legal advice is provided by lawyers to their clients.

Download an Acrobat PDF version of the Walkerton Compensation Plan ILA Checklist (39KB file).

View the Walkerton Compensation Plan ILA Checklist. (The checklist has been removed)

Popular "Managing" booklets now online
practicePRO's two "best sellers" – its booklets on managing conflicts and managing the lawyer/client relationship – are now online at http://www.practicePRO.ca.

The online versions contain the same handy checklists and tips that have made so popular the printed copies, 10,000 copies of which were distributed to lawyers in 1998. The online managing booklets are available in simple text versions and in a PDF version that can be downloaded, printed and bound for easy reference.