We understand that this is the first occasion on which a Dáil committee has invited interested parties to appear before it, to make submissions in relation to draft legislation. This is, therefore, a significant event in the history of the Oireachtas. It is an honour for the Law Society to be the first such interested party to be invited to make a submission to a Dáil committee and, on behalf of the society, we wish to thank the Chairman and the committee for the invitation to address you. The Minister for Finance, in his Second Stage speech, indicated that there were quite detailed discussions with the accountancy bodies prior to the announcement of the measures under consideration today. We wish to place on record that the Law Society was not consulted in advance about section 153 of the Finance Bill, 1995, nor have we been afforded an opportunity to make representations since its publication, other than by writing to the Minister. In those circumstances this invitation is particularly welcome. The Law Society was established by Charter in 1888 and under statute by the Oireachtas in 1954, which legislation has subsequently been amended as recently as 1994. It is charged by the Oireachtas with being the representative and regulatory body for solicitors in Ireland. The solicitors profession has a long and proud history of service to the people of Ireland. Perhaps the most important role that lawyers can play is to stand between the State and its citizens when the rights of the latter are under threat. It is a role which rarely endears lawyers to the State, but is one which the profession has never shirked and which it will not shirk on this occasion.
One of the most disturbing aspects of section 153 is what we would term its "slippery slope" dimension whereby the undermining of certain constitutional rights connected with lawyer client confidentiality, once established, could be expanded on in years to come. Although the current proposal is confined to the tax affairs of companies, if the principle were established here it is not difficult to envisage it being extended to the tax affairs of individuals and, indeed, beyond tax matters to other matters of issue between the individual and the State. It is because of this that the Law Society views section 153 as it applies to lawyers as a civil liberties issue of genuine significance.
Section 153 is a measure intended to assist the State to curb tax evasion. We wish to make it utterly clear at the outset that the society and the solicitors' profession whom we represent in no way condone tax evasion. We would condemn without hesitation any solicitor engaged or assisting clients in relation to tax evasion. Apart from the criminal penalties which such activity would attract, to be so engaged would be a matter of the most serious professional misconduct for a solicitor. It would be dealt with as such with the utmost severity by the society and would be likely to lead to the ultimate sanction of the solicitor being struck off the roll of solicitors by the President of the High Court.
There have been some suggestions that the society's opposition to section 153 indicates an ambivalence towards tax evasion and a desire to protect clients who may be guilty of it from being brought to justice. This is most emphatically not the case. Any such suggestion is a defamatory misrepresentation of the society's position and we deeply resent it. A lawyer's duty to defend an accused person must not be confused with sympathy for the crimes of which his client has been accused. The society is indeed opposed to the application of section 153 to lawyers but we have excellent grounds for being so opposed.
We believe that it is profoundly wrong in principle to create an obligation on lawyers to report their clients to the Revenue Commissioners in violation of the confidentiality which has historically attached to information disclosed by a client to a solicitor. In its ultimate application it can be envisaged that solicitors would be compelled to give evidence in court against their own clients concerning information which had been revealed to the solicitor in confidence. In so far as the society can determine, such a law would be without precedent anywhere in the free world. Colleagues in other countries have been both amazed and shocked to hear from us that it was proposed to impose such an obligation on lawyers in Ireland.
The society considers that section 153 is not merely wrong in principle but that it would create enormous difficulties in practical terms. Given that tax law is exceedingly complex and contains many grey areas, even experts may profoundly disagree on what constitutes evasion. The application of this provision would create impossible practical dilemmas for lawyers. In addition, there is a real risk that clients would seek tax advice abroad rather than from advisers in this country and that the measure would discourage foreign investment in Ireland. In order for anyone to obtain proper legal advice it is necessary to make a full disclosure to the legal adviser. Accordingly, we submit that it is wrong in principle to create a risk of undermining in a general way the public's trust and confidence in its lawyers.
The members of this committee have received a six page submission from the society setting out the grounds of many of the objections in principle and problems in practice which the society's taxation committee sees in section 153. All of the points made today and in the said document are considered by the society to be important, but are subsidiary to the primary point. The society's fundamental objection is that section 153, as it applies to lawyers, constitutes a serious erosion of the protection of citizens' rights in dealing with State authorities and violates rights protected by the Constitution.
This view of section 153, as it applies to lawyers, occurred to the Law Society on first sight of the Bill on 12 May 1995. The society subsequently saw it and obtained a fully argued opinion from two barristers who are recognised as unquestionably among the foremost experts in Irish constitutional law. This opinion unequivocally expressed the view that, in so far as it would apply to lawyers, section 153 trenches deeply and disproportionally on established constitutional rights and would be struck down by the courts as unconstitutional.
Their grounds for reaching this conclusion in relation to section 153 are, in outline, as follows: (1) Section 153 undermines the constitutional right against self-incrimination. The centuries old Common Law right against self-incrimination has been explicitly recognised by the courts as a right protected by Article 38.1 of the Constitution. In addition, the right against self-incrimination has been deemed by the European Court of Human Rights to be an essential feature of the right to a fair trial under Article 6.1 of the European Convention on Human Rights.
This right, which finds a classic expression in the Fifth Amendment to the Constitution of the United States and which is also recognised in European Union law, has been held by the courts in Ireland to be fundamental to the rules under which criminal trials are conducted and to come within the terms of the guarantee of a fair trial contained in Article 38.1.
There has been a considerable body of case law on the application of the test of proportionality to the overriding of a constitutionally protected right. Following examination of this case law, the opinion concludes that, linked to the judicially established constitutional right of access to a legal adviser, it must be seriously doubted whether the Oireachtas could ever trench upon the right against self-incrimination in the manner suggested in section 153.
(2) Section 153 undermines a client's right to legal professional privilege. A client's right to legal professional privilege, like the rule against self-incrimination, is a necessary aspect of the constitutional right of access to a lawyer. It is an essential feature of the rule of law and the proper administration of justice. A classic formulation of this appears in a judgment of the United States Supreme Court, which our advisers believe would be followed by the Supreme Court in Ireland in the following terms:
If a person cannot consult his legal adviser without being liable to have the interview being 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.
Some of the potential objections to section 153 in relation to the client's right to legal professional privilege are mitigated by the "in preparation for litigation" savour in section 153(8). Even allowing for this, and for the legal assistance/legal advice distinction drawn by the Supreme Court in the Smurfit Paribas case, however, section 153 trenches deeply into client's legal professional privilege to such an extent as to fail to respect a fundamental feature of the constitutional right of access to a lawyer.
These are not technical meritless lawyers' points by which legalistic special pleading is being invoked to frustrate a legitimate measure. An independent legal profession plays a crucial role in the administration of justice. If a citizen cannot have the existence and means of exercise of a right explained to him, he effectively loses that right. The right against self-incrimination and a client's right to legal professional privilege are badges of a free democratic society. It is the rights of citizens, not simply of lawyers, which are under attack from this provision. It is a threat to the constitutional rights of every citizen if lawyers are to be made agents of the State rather than of their clients.
That this indeed is a civil liberties issue would probably be much more clearly identifiable if it was a measure proposed in the general area of criminal law rather than the Revenue area. However, the principles at stake remain the same. One must not lose sight of the fact that we are dealing here with potentially very serious criminal offences. If constitutional rights are to be impugned, there should be minimal restraint of the exercise of the protective right in the exigencies of the common good. The objective must be of sufficient importance to warrant overriding the constitutionally protected rights. On the legal advice to the society that is not the case here.
It was on the basis of this very strong legal opinion from constitutional law experts to the effect that section 153 as it applies to lawyers is unconstitutional — an opinion which, according to newspaper reports, has now been given to the Government by the Attorney General — that the council of the Law Society, at its meeting on 4 May 1995, decided to recommend to its members that they should not comply with section 153 if it is enacted. This was not a decision taken lightly by the Law Society council. It is obviously a major step for the society to issue to its members a recommendation that they ignore statute law passed by the Oireachtas. It has done so only based on a compellingly argued expert opinion, the conclusion of which is that it would, in fact, be the Oireachtas which would be failing in its duty to respect the Constitution by enacting section 153 as it would apply to lawyers. If section 153 were to be enacted, then the society would in all likelihood launch a constitutional law action immediately to have the provision as applied to lawyers struck down by the courts.
The society accepts that the motivation of the Minister for Finance and of the Government in introducing this measure is entirely honourable. Their objective is laudable. The society in no way condones tax evasion and would support any reasonable measure introduced by the Government to help curb it. However, it will not support measures which unreasonably and disproportionately undermine important constitutional rights of citizens. If the Minister had restricted section 153 to auditors, as recommended by Mr. Justice Hamilton in the beef tribunal report, then the constitutional problems arising from the special role played by legal advisers in the administration of justice would probably not have arisen.
As the Government clearly cannot proceed with legislation which is likely to be struck down by the courts as unconstitutional, the society now calls on the Minister to either amend section 153, so that it will no longer apply to legal advisers, or else to drop the section completely.