The Gazette 1974

Nevertheless, the Society feels that the proposals are in direct conflict with the rule of absolute privi- lege of transactions between a solicitor and his client, a rule which is for the protection of the client to enable him to confide unreservedly in his legal adviser. This proposed legislation attacks one of the funda- mental rights of the citizen and to the extent that the Society feels it must call public attention to it, and is making representation to the Minister for Finance to alter the section and preserve the privilege. This expresses the fears and objections of the legal profession to this section. I am sure the Minister is also well aware of their determination, as far as possible, to resist this section. I read an article in the magazine, Business and Finance which refers once again to the proposed change. It refers to the solicitor here as the confidential agent. Speaking of the clients, it says : Without trust, absolute trust, who does he go to? In Sicily they go to the Mafia. The Minister is aware that in the Dail one of his legal colleagues, stated that he will absolutely refuse to comply with this regulation. I won- der how the Minister or the Revenue Commissioners propose to deal with this. How will the Minister deal with these solicitors, some on his side of the House, if they refuse to comply with this as I am sure many of them will do? They have already challenged the Minister and intimated that they have no doubt at all that they will refuse to do this. I think this subsection will become unenforceable and will lead to confusion. I think that the amount of money which the Minister would hope to collect or the amount of tax avoidance which he would hope to be able to prevent would not be worth the candie, taking into account the cost of the administration of this section. Because of the nature of the relationship between a client and a barrister, an accountant and a banker, I think that this special privileged relationship should be preserved. Mr. R. Ryan: I do not want to delay the House but acceptance of recommendation 28 would, in fact, leave solicitors completely unprotected. It seems to me that acceptance of recommendation 29 would not give soli- citors any greater protection than there is under the section. All they have to do is supply names and addresses. Mr. Lenihan: It is only relevant in the context of having Section 59 in the Bill. The whole thinking in this area is crazy in our circumstances. We are in a period of recession where we are experiencing serious difficulties and we are concerned about chasing half- pennies and destroying basic legal principles in order to chase halfpennies. There is a sense of unreality surrounding this debate. We are seeking to erode a confidentiality which has existed over centuries between a solicitor and a client, between banks and their clients and between a client and accountant or a barrister. This concerns the private affairs of individuals. "In the case of anything done by the solicitor in connection with the transfer of the asset" is the phraseology used. Mr. R. Ryan: The names and addresses of the people involved—no more than that. Mr. Lenihan: I am referring to (a), (b), and (c) of subsection (3). Mr. R. Ryan: It is the names and addresses that are

involved and no more. Mr. Lenihan: And also (a) in the case of anything done by the solicitor in connection with the transfer of any asset and (b) in the case of anything done by the solicitor in connection with the formation or manage- ment of any such body corporate and (c) in the case of anything done by the solicitor in connection with the creation or with the execution of the trusts— Mr. R. Ryan: The name and address. That is all that is asked. Mr. Lenihan: There is a lot more than that. With that type of ascertainment of information if you link (a), (b) and (c) together the whole operation in effect which has been discussed between solicitor and client is re- vealed to the Revenue Commissioners. I agree with Senator Sean Brosnan's view that this is unenforceable. If professional persons in the category mentioned decide not to give the information, that will be the end of that. There is no clause written into this section. If a thing is undesirable but is in the interests of the com- munity, that is acceptable. The amount of information and the amount of revenue this will yield eventually will be negligible. We will just have added a further tarnishing to the good name we spent many years buil- ding up. This type of section brings us close to the Banana Republic type. We have sought for over fifty years to get rid of that—we have never had it in our State. There is a high regard abroad for our institutions and for the way we carry on business and behave ourselves. If we are to have a sec- tion such as this written into the principal piece of legislation enacted, which is the Finance Act, there can be no confidentiality in regard to particular transactions between solicitor, client, accountant, barrister, banker and so on. This sort of damage is punitive when linked to a number of other proposals that the Government have adumbrated, many of which they have withdrawn. It is the total add-up that counts and this is causing the present lack of confidence on the part of financial affairs and business in the development of our commu- nity. Basically, the whole financial structure depends on the single element of confidence. If, by reason of sections like this, one further erosion is added to our confidence we are on a dangerous, slippery slope. I appreciate that the Minister is adamant in this matter. Mr. R. Ryan: Senator Brosnan quoted the letter which the President of the Incorporated Law Society sent to the Press. I am not aware that the solicitors' profes- sion or the society were consulted before the letter was issued. Secondly, I am disappointed that the President of my own professional society should have written a letter to the Press which was, to say the least of it, mis- leading in that it did not fully tell the public the true position under the section. The letter from the learned President to the Press stated, as Senator Brosnan quoted, that solicitors would be required to give particulars relating to any transaction concerning the transfer of assets abroad and the possible avoidance of taxation thereby and that this section shall require that solicitors among others should be compelled to disclose information relating to their clients and their affairs. I am disappointed that the President did not display the type of caution which I think a solicitor should. Mr. Lenihan: He must have thought it a very serious matter. 243