Duties to Report and the Proceeds Of Crime Act 2002: A Comparison With Mandatory Reporting In France.

 

Dr Rachael Stretch,

Nottingham Trent University

rachael.stretch@ntu.ac.uk

Copyright © Rachael Stretch 2005
First Published in the Web Journal of Current Legal Issues

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Summary

This article compares the differing approaches taken towards the notion of a duty to report the commission of a crime in England and France.  The article argues that French experience suggests that the increase in the degree of mandatory reporting introduced in England by the Proceeds of Crime Act 2002 is neither likely to produce the number of problems suggested by some nor all the benefits suggested by others.

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Contents

Bibliography

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Introduction

Since the abolition of the offence of misprision of felony by the Criminal Law Act 1967, there has not been a general duty to report offences in English criminal law.  Instead mandatory reporting has been limited to specific offences or situations.  Misprision of treason is still an offence and under section 19 of the Terrorism Act 2000, failing to report terrorism is also punishable.  Similarly, according to sections 70 and 172 of the Road Traffic Act 1988, a driver or a vehicle owner may commit an offence by not reporting an accident or road traffic offence.  Whilst the duties to report terrorism and treason may be justified because of the seriousness of these offences, this argument is less convincing in relation to the reporting of road traffic accidents. It seems instead that this mandatory reporting is based on widespread car ownership and motoring insurance and the rights of victims of road traffic accidents and offences to recover compensation.  The final non-reporting offence is set out in section 5 of the Criminal Law Act 1967.  This makes it an offence to fail to report if the non-reporter had been paid not to report.  Here, the failure to report is especially blameworthy because the non-reporter has profited from this silence.  Furthermore, the fact that he was paid not to report would make it clear that he knew about the offence.  

The Proceeds of Crime Act 2002 has increased the scope of mandatory reporting.  It has introduced duties to pass on information about criminal proceeds with the result that professionals may have to report the criminal activities of their clients or third parties.  Unlike existing duties to report, the obligations in the Proceeds of Crime Act apply to all criminal offences and therefore represent a significant change in the approach of English criminal law towards mandatory reporting.  In order to better understand this change, it is useful to explore the reasons for it and examine whether it is likely to be effective.  In doing this, the Article will compare duties to report in the Proceeds of Crime Act 2002 with the approach taken towards mandatory reporting in the French Penal Code.  The French Penal Code has contained duties to report since Liberation (Ordonnance 25^th June 1945; Article 62 of the Former French Penal Code) and it is hoped that the longer experience of mandatory reporting in France will be a useful framework against which to evaluate the provisions in the Proceeds of Crime Act 2002.  Furthermore, even though the French non-reporting offences differ from the mandatory reporting in Proceeds of Crime Act 2002, these differences will themselves be useful as a contrast to the approach taken in the English Act in that they suggest an alternative, and perhaps preferable, approach to mandatory reporting.

Nevertheless, before exploring the French provisions and comparing them against the English law, it is first necessary to describe in more detail the extent of the duties to report in the Proceeds of Crime Act 2002.

 

Section 328 of the Proceeds of Crime Act 2002

This section sanctions a failure to report an arrangement which helps another individual to acquire or use criminal property.  Under subsection (1), knowing or suspecting that an arrangement would help an individual acquire or deal with criminal property is an offence.    Subsection (2) provides a defence namely that an authorised disclosure under section 338 was made or there was a reasonable excuse for not reporting.  In other words, a person has to report arrangements of criminal proceeds under subsection (2) or he will commit an offence under subsection (1).   Although section 328 is not specifically aimed at professionals, it is arguable that some professionals, and especially those who give financial advice, are particularly likely to discover criminal proceeds.  For example in Squirrell Ltd v National Westminister Bank plc (customs and excise intervening) [2005] EWHC 664, a bank discovered that some of the proceeds in a customer’s account could have been the result of criminal activity and as a result was forced to block a customer’s account in order to prevent itself becoming involved in making arrangements for dealing with criminal property.

The meaning of section 328 was recently considered by the Court of Appeal in Bowman v Fels [2005] EWCA CIV 225.   In this case, the court gave a narrow definition to the provision and determined that making arrangements did not include litigation or preparing for litigation.  This is important because it could significantly limit the scope of the mandatory reporting in the Act and in particular it could ease some of the feared conflict between this provision and professional duties of confidentiality.  Nevertheless, whilst litigation is clearly excluded, it is less clear whether other activities will also escape the ambit of section 328.  For example, what about negotiations on behalf of a client that are not part of litigation or what about the professional confidentiality of other professionals.

The scope of section 328(1) and therefore of the duty to report is quite extensive.  In particular, there is no minimum limit on criminal proceeds, nor is the provision restricted to particular types of criminal activity.    On the other hand, the duty to report only arises if a person knows or suspects that the property is criminal proceeds, and it could be that a large amount of property or proceeds from more serious offences are more likely to be discovered than small funds from minor offences.  Against this, it could be claimed that some professionals will have access to information that will enable them to uncover even small levels of criminal proceeds.    In any case, it may be that a duty to report all offences is actually less onerous than a more selective duty.   At least with an all-encompassing duty, the potential reporter does not first have to determine the provenance of the proceeds or whether they are sufficiently significant to warrant reporting. 

Section 338 Proceeds of Crime Act 2002

This section explains what is meant by an authorised disclosure, in other words what a person has to do in order to avoid committing an offence under section 328(1).  The first requirement set out in subsection 338(1)(a)  is that the disclosure is made to the appropriate person, in other words, to a constable, customs officer or nominated officer.  In addition, the disclosure has to be made in the correct form, details of which are given in section 339.  Finally, an authorised disclosure generally has to be made before the prohibited act (Proceeds of Crime Act 2002 s. 338(2)), or there has to be a good reason for it being done later (Proceeds of Crime Act 2002 s. 338(3)(b)), and in any case it has to be done as soon as practicable (Proceeds of Crime Act 2002 s. 338(3)(c)).  The fact that section 38 allows for reporting both before and after the criminal offence suggests that the purpose of encouraging reporting is both to prevent offences (the reports before the offence) and to name and punish those responsible (the reports before and after the offence). 

Section 333 of the Proceeds of Crime Act 2002 - Tipping Off

The rules on authorised disclosure in section 338 are further complicated by the fact that it is an offence to ‘tip off’ someone that a disclosure has been made.  The defences to this are set out in section 333(2), namely that the informer did not realise that the disclosure would be prejudicial (Proceeds of Crime Act 2002 s. 333(20(a)) or that the disclosure was justified by a function that he holds (Proceeds of Crime Act 2002 s. 333(2)(b)).  Nevertheless, the most important defence is likely to be section 333(2)(c) which states that a person does not commit an offence if he is a professional legal advisor and the disclosure is made to either his client or his client’s representatives and is connected with the giving of legal advice.  In relation to this final defence, subsection 333(3) clearly states that tipping off will not be justified by legal professional privilege if it was done with the intention of furthering a criminal purpose.

The scope of tipping off was considered in P v P (ancillary relief:  proceeds of crime) [2003] EWHC 2260.  Having made a disclosure under section 328, the wife’s solicitors wanted to know whether they were permitted to tell their own client about this disclosure and whether they were able to inform the husband’s advisors.  Although, both their relationship with their client and the need for full and frank disclosure in ancillary relief negotiations were arguments in favour of informing,  the firm were concerned whether they were barred from making such a disclosure by the sanctions against tipping off in section 333.   The court confirmed that acting in family proceedings would be covered by section 333(3)(c) and therefore the solicitors would be able to disclose that they had made a report under section 328.  It did however suggest that it would be good practice to wait a maximum of seven days before telling a client that a report under section 328 had been made ([2003] EWHC 260 at paragraph 67).

Since this decision, the Court of Appeal in Bowman v Fels [2005] EWCA CIV 225 has ruled that information discovered by a lawyer whilst they are preparing for litigation does not have to be reported and it is arguable that the fact that this decision reaffirms the primacy of legal professional privilege casts doubt on whether there was in fact an obligation to report in P v P (ancillary relief: proceeds of crime) [2003] EWHC 2260.

 

Section 330 of the Proceeds of Crime Act 2002 - Failure to disclose – regulated sector

According to this section, it is an offence for anyone in the regulated sector (defined by Proceeds of Crime Act 2002 schedule 9) to fail to report money laundering.  Nonetheless, this offence will only be committed if the conditions in subsections (2), (3) and (4) are satisfied and it is important to remember that there are defences set out in subsections (6) and (7). 

The first condition in section 330(2) refers to the potential reporter’s knowledge of the offence.  A person has to report if he knows or suspects or if he has reasonable grounds for knowing or suspecting that another person is engaged in money laundering.  This seems to be quite a low level of knowledge.  A potential reporter does not have to be certain or even believe that there are criminal proceeds.  Moreover, under subsection 330(2)(b), a person could be liable for not reporting even if he himself did not realise that there was money laundering if a reasonable person would have realised. It is enough that a reasonable person would have suspected.

The second condition in subsection (3) makes it clear that the duty to report only applies to information that a person acquires through his profession.  This is important for two reasons.  First it may be that this information is more pertinent and more reliable than information that had been obtained outside the business context.  Secondly, one of the problems with mandatory reporting is how it may conflict with other priorities and duties the potential reporter has.  By restricting reporting to information that has been acquired in the regulated sector it is at least clear that the reporter’s personal life and personal relationships will not be affected.  On the other hand, because the duty concerns information acquired in a professional context, it may conflict with a person’s professional aims or some professional duties or ethics.  The final condition, in subsection 330(4) is that the disclosure was not made as soon as practicable.

There are three defences to non-reporting under section 330.  According to subsection 330(6) failing to report is not punishable if the non-reporter had a reasonable excuse for not reporting or if he was bound by legal professional privilege.  In addition, under subsection 330(7) a person does not have to report unless he knew or suspected that there was money laundering.  Arguably the most problematic of these defences is subsection 330(6)(a) as it is not clear what would be a reasonable excuse justifying non-reporting.  One possibility might be that a failure to report would be excusable if reporting would have conflicted with a duty of confidentiality.  In support of this, the defence of legal professional privilege suggests that conflicting duties of confidentiality are viewed sympathetically, on the other hand though, it could be argued that if confidentiality in general were a defence this would have been specifically stated. 

 

Mandatory Reporting and the French Penal Code

Unlike English criminal law, there has been a duty in French criminal law to report all serious offences since 1941(Law 25^th October 1941); the offence being reinstated after Liberation (Ordonnance 25^th June 1945) as Article 62.  This is now contained in Article 434-1 of the current Penal Code.  In the 1960s, a specific duty to report terrorism and offences against the State was added (Ordonnance 4^th June 1960) followed in 1971 by a duty to report the abuse or neglect of children (law 6^th July 1971).  These are now found in Articles 434-2 and 434-3 respectively.   The duty to report child abuse has been the most prosecuted of the duties and in the mid 1990s reforms of the Penal Code this duty to report was extended so that it covered violent offences against vulnerable adults as well as child abuse and neglect.  As well as these specific non-reporting offences, there are other provisions that may be used to encourage reporting.  Article 40 of the Code of Criminal Procedure imposes a duty on professionals to report any information about criminal offences that they discover in the course of their profession.  Although this seems to be the closest match to the requirements in the Proceeds of Crime Act 2002, failing to report contrary to Article 40 is not punished by a criminal sanction but is instead likely to be dealt with by a disciplinary procedure.  Finally, the duty to rescue or to prevent violent offences in Article 223-6 may in practice also be used to require reporting (Cadoppi, 1993; Ashworth and Steiner, 1990).   Whilst this is not actually a duty to report, it is clear that one way of preventing an offence or removing a victim from danger is to report that situation to the authorities.  

 

What offences have to be reported?

The offences that specifically punish failures to report, namely Articles 434-1, 434-2 and 434-3, are supposedly restricted to serious and dangerous offences.  The general duty to report in Article 434-1 is restricted to the most serious class of offences in the French Penal Code, crimes.  According to Article 111-1 of the French Penal Code only offences with sentences of at least ten years are classified as crimes.  Nevertheless, whether this in reality means that only serious and dangerous offences are defined as crimes depends on the types of offences that carry sentences of at least ten years.  In fact, a review of the Penal Code suggests that sentences of ten years or over are almost exclusively restricted to significant violent and sexual crime.

Similarly, it may seem that the duty to report terrorist offences in Article 434-2 is prima facie restricted to serious offences.  Again, whether this accurate, depends on how terrorism and offences against the State are defined.  The French Penal Code recognises three types of terrorism.  First, any offence can be a terrorist offence if it is committed with a terrorist motive.  The obvious difficulty here is the fact that it applies to “any” offence.  Secondly, Article 421-2 defines ecological terrorism as a form of terrorism.  This is when an individual, or group, acting with a terrorist motive introduces something dangerous into the air, soil, subsoil or water.  The most recent prescribed form of terrorism is described in Article 424-2-1. This provision makes membership of a terrorist group by itself a form of terrorism.  Furthermore, there is no need to establish that this membership has ever been, or is currently, active.  In terms of duties to report, this type of terrorism is arguably the most problematic.  In that it goes beyond reporting a person’s involvement in a criminal enterprise to reporting their beliefs or even beliefs that they once held but have now renounced.

The third duty to report, Article 434-3, covers the abuse and neglect of children or vulnerable adults.  Although, abuse or neglect that was a crime would have come within the general duty to report crimes, it was decided that there was a need for a specific duty to report child abuse.  This was because some abuse and neglect was not being reported because potential reporters were not clear whether it was sufficiently serious to be defined as a crime.  The introduction of a specific duty to report removed this uncertainty and coupled with an increased awareness of child abuse and neglect lead to an increase in reporting.   

Article 40 of the Code of Criminal Procedure is the widest duty to report.  It covers all crimes and délits that a professional discovers in the course of his profession.  Unlike other duties to report it is not limited to crimes, to or serious violent offences, or to offences against a particular type of victim.  Because of its breadth, there have been concerns that Article 40 has been misused, and that rather than helping to uncover or investigate dangerous crime, it has been used disproportionately against illegal immigrants, with the result that many immigrants are deterred from accessing social, health or education services for fear that they will be falsely accused Fontenelle, 1997, 154-156.   Nevertheless, it is likely that the high level of reporting of these offences is because they are easily discovered, particularly for some professionals in the course of their work, rather than because officials are deliberately misusing Article 40 of the Code of Criminal Procedure. In any case, Article offers perhaps a useful warning to English use of mandatory reporting.  It is possible that like Article 40, the duties in the Proceeds of Crime Act 202 will lead to more minor offences being reported perhaps at the expense of more serious offences.

Another provision that may be used to punish non-reporting is Article 223-6 of the Penal Code.  There are two aspects to Article 223-6, rescuing a person from danger and preventing an offence and both of these could require reporting.  Danger has been defined as a threat to life, health, or physical integrity (Dr. pén 1991 comm 135; Fillette, 1995, 3863), and therefore it seems that the duty to rescue a person from danger would only benefit victims of serious violent offences.  Furthermore, it is clear that danger does not include economic danger and therefore it would not apply to a victim of financial crime.  Similarly, although there is a duty to prevent crimes or délits in Article 223-6, it only applies to serious violent offences that compromise bodily integrity.

It seems therefore that the French duties to report are less extensive than the mandatory reporting in the Proceeds of Crime Act 2002.  Even the most extensive provision, Article 40 of the Code of Criminal Procedure, does not apply to contraventions (the most minor offences in the French Penal Code) and the other provisions are even more limited, only covering serious and violent crime.  In contrast, the duties to report in the Proceeds of Crime Act 2002 seem wider.  Earlier duties to report money laundering in the Drug Trafficking Act 1992 focused on the proceeds of specific offences, however the later Act covers the proceeds of any criminal activity.  It is clear from subsection 340(2) that there is no restriction as to the type of crime that the proceeds have come from, nor is there any minimum value which the criminal proceeds have to reach before they have to be reported.  The danger of this of course, is that if the criminal proceeds are of a very low value, or if the offence that led to them was not that serious, it may be that an obligation to report is disproportionate to the harm they represent. 

The fact that the Proceeds of Crime Act 2002 applies to the proceeds of all offences also raises practical issues.  One advantage is that a potential reporter can be more confident that there is a duty to report.  In other words, he does not have to check that the proceeds came from one of the specified offences or that they are sufficient to come within the duty to report.  It is however questionable whether finding out where the proceeds came from or what they amounted to would be a problem for the professional or even that a more limited (in terms of offences it applied to and level of proceeds) duty to report would mean that a professional would have such a duty to investigate.  Moreover, the fact that section 328 applies to all offences and any amount of criminal proceeds may perhaps make it unworkable.  It is possible that it may be harder to investigate significant criminal proceeds because of a wealth of information about less important criminal proceeds.  In addition, it is possible that because the duty to report in the Proceeds of Crime Act 2002 is so extensive that attention may be distracted from serious offences to less serious offences and it is possible that, like Article 40 of the French Code of Criminal Procedure, it may primarily be used against easily discoverable offences, rather than against the most serious or harmful offences.  

The Purpose of Reporting

There are two main reasons for encouraging reporting.  They are that reporting a future offence might prevent it happening and alternatively that reporting might make it easier to prosecute and punish those responsible for the offence.  The specific non-reporting offences in the French Penal Code are aimed at preventing offences and the identification and prosecution of those responsible is clearly excluded from their aims.  One reason for this is that there is a significant distinction in French law between dénonciation and délation (Gayraud, 1995, 28-32).  The former is seen as benefiting the community, as altruistic and as something which should be encouraged by the law. The latter is seen as divisive, underhand and harmful.  It is clear from both the wording of the duties to report and the relevant case law that Articles 434-1, 434-2 and 434-3 only include reporting the fact of the offence, they do not extend to reporting the identity of the offender (D. 1962 121).

Article 40 of the Code of Criminal Procedure is wider. It covers both past and future offences and it seems it can be used both to prevent an offence happening and to deal with those responsible.  There are two explanations why Article 40 is wider than Articles 434-1, 434-2 and 434-3.  Firstly, even though Article 40 may require the offender to be identified as well as the offence to be reported, it only applies to professionals reporting in a professional capacity.  One of the dangers of délation is it being misused and malicious.  It is arguable that professional reporting will be responsible and reliable and that therefore this risk is irrelevant or at least less important.  Another reason for the wider scope of reporting in Article 40 is that it is not backed by criminal sanction and therefore the argument that the duty should be limited to the most serious types of non-reporting does not apply.

As for Articles 223-6, it applies to both past and future offences.  The duty to prevent violent offences focuses on offences that have yet to happen, in other words those than can still be prevented, whilst the duty to rescue concentrates on past offences that have left the victim in danger.  Interestingly, though, in both cases, the duty is centred on the victim and it does not seem to be aimed at punishing the person responsible for leaving the victim in danger.  In other words, whilst the naming of the offender is not specifically excluded, it is not required either and it will only be relevant as part of the duties of Article 223-6 if it either helps prevent an offence or aid a person in danger.

The duties to report in the Proceeds of Crime Act 2002 require the reporting of both future and past offences.  Although section 338 states that the disclosure should, if possible, be made before the offence, it also allows for disclosures after the offence.  Similarly, section 328(1) seems to suggest that the disclosure could be before or after an offence has been committed.  The fact that the Proceeds of Crime Act 2002 applies to both past and future offences is further supported by the fact that English criminal law does not distinguish between the dénonciation and délation types of reporting nor have existing duties to report.  Moreover, the references to additional information in subsection 339(3) might suggest that a reporter could be required to name a potential offender, meaning that reporting could have the purpose both of preventing the offence and prosecuting the offender and could therefore occur both after the offence as well as before it has been committed. 

This raises the further question of what purpose these duties to report should have.  The argument for preventing offences does seem more compelling.  If the offence is prevented, its intended victim does not suffer the harm it would have caused.  Hence in this situation a duty to report will not only benefit the community as a whole but also a particular individual.   Furthermore, a duty to name an alleged offender is more problematic than a duty to report the existence, or planned existence of an offence.  The former raises issues of betrayal and arguably lends itself more to malicious reporting.  Here the history of mandatory reporting in France is instructive.  Duties to report were first introduced during Occupation where there purpose was to protect occupying forces and collaborators and prevent Resistance activity (Law 25^th Oct 1941; Fontenelle, 1997, 74).  Although the duties were later legitimised by being modified and adopted by the Provisional Government, it is still the case that mandatory reporting had a shameful origin in France and because of the experience of malicious reporting during Occupation, there is probably a desire to distinguish and distance current duties to report from the 1941 law (Amouroux, 1981, 261; Halimi, 1983, Fontenelle, 71; Gayraud, 1995, 89-97).

On the other hand, the division between the different types of reporting is perhaps artificial.  In reality if an informant knows who the offender is, it may be difficult to report the offence without naming him.  Moreover, it is perhaps unrealistic to consider duties to report in isolation.  For example, in France, although there is no duty to name a person under Articles 434-1, 434-2 or 434-3, under Article 81 of the Code of Criminal Procedure a person who has information can be interviewed by the examining magistrate and if he knows who the offender is, it may then be an offence for him to fail to name him (French Penal Code Article 434-12).

Reporting and Legal Professional Privilege

The question of whether a person should be compelled by the criminal law to report another’s wrongdoing becomes more complex when the potential reporter is a professional.  Whilst there may be a benefit to the community in more reliable information being obtained, there may be a cost to the individual client who is not able to rely on the professional’s confidentiality. Furthermore, there may be a wider cost as some are deterred from seeking help because they cannot rely on the professional’s confidentiality.  In fact, it is even possible that rather than increasing information, professional duties to report may in fact decrease information.  Either because people filter the information they give to the professional to prevent being reported, or being they do not even go to see the professionals.  Against this it could be argued that a professional, who has to report because of a duty to report, would be viewed more sympathetically than a professional who chooses to report.  The conflict between the perceived benefits of mandatory reporting for professionals and its potential costs are reflected in the different approaches in English and French law and whilst in English criminal law a professional may have an increased duty to report because of his profession, in France, the professional may be exempt from the non-reporting offences because of his profession.

According to Article 434-1, a professional, who is covered by professional confidentiality, does not have to report.  This is because under Article 226-13 of the French Penal code breaking a professional duty of confidentiality is an offence and faced with the impossibility of meeting two completely contradictory standards, namely a duty to disclose and a duty to keep quiet, the general position is that a professional, who discovers a crime during his employment, can choose whether to report.  In reality, however, the position is a little more complex and not all professionals or all professional and client situations will come within the exception in Article 434-1 and therefore some professionals will nonetheless have to report.

One reason for this is that the professional confidentiality exemption only applies if a professional discovered the crime whilst carrying out the duties of his profession and this has meant that as the definition of what constitutes acting in the course of a profession has narrowed, correspondingly it has become increasing likely that a professional will have to report (Stretch, 2003).   This is clearly illustrated by the law’s attitude towards non-reporting priests.   Traditionally, priests had a very extensive duty of confidentiality (Robine, 1982, 221).   Recently however, a bishop was convicted of failing to report child abuse committed by a priest on the basis that as he did not learn about the abuse in the confession his duty of confidentiality did not apply and he was not exempt from the duty to report (‘ L’ Eveque, 2001; Prison, 2001).  Although this does create a clear distinction between when a priest is acting in the course of his employment and when he is not, it is a surprising decision as it reversed the existing case law and doctrine.  In fact, it is probable that the decision was motivated by the seriousness of the offences and the fact that the bishop seemingly ranked the reputation of the church above the welfare of children. 

Moreover, although professionals may be exempt from having to report under Articles 434-1, 434-2 and 434-3, they are not exempt from the duty to rescue or prevent an offence in Article 223-6 of the Penal Code or from the duty to report in Article 40 of the Code of Criminal Procedure.  In fact, it seems they may have an increased duty to report in these provisions.   The case law and doctrine surrounding Article 223-6 suggests that professionals are especially likely to be prosecuted for a failure to rescue or prevent an offence because they are more likely to fulfil the requirements of Article 223-6 (Filliette, 1995; Soutoul, 1992). In particular, because of their training and experience they are more likely to realise that a person is in danger and in order to increase the effectiveness of the duty to rescue, case law has interpreted it to mean that  professionals can be required to travel to help people in danger.  As for Article 40 of the Code of Criminal Procedure, this clearly applies to professionals as it is limited to information that professionals uncover in the course of their profession.

The Proceeds of Crime Act 2002 imposes increased duties to report on professionals.  The duty to report in section 328 of the Proceeds of Crime Act arises if a person is involved in arranging the use or acquisition of criminal proceeds.  It is more likely that a professional, for example a lawyer or accountant, would help deal with criminal proceeds than a non-professional.   On the other hand, it is arguable that the recent Court of Appeal decision in Bowman v Fels [2005] EWCA CIV 225 has mitigated the extent of the duty to report.  This decision made it clear that litigation and the preparation of litigation would not be defined as an “arrangement” and therefore there would be no duty to report criminal activity that was discovered as the result of this.  Interestingly, in this case the criminal proceeds did not belong to the solicitor’s actual client but it is probable that if they had belonged to the client the decision would have been the same. In Bowman v Fels the criminal proceeds were the result of offences that had already been committed.  A further issue is whether a different approach would have been taken to potential proceeds that were based on offences that had yet to be committed.  Although, these situations seem very similar it is arguable that they are distinguishable.  Looking again at section 338, there does seem to be a preference for reporting before an offence has been committed and  it could be argued that despite legal privilege the lawyer’s role is not to help the client commit an offence and therefore the actions of the lawyer would come within section 328 and would carry a duty to report.

Section 330 is a duty to report by the regulated sector and therefore is aimed at professionals.   This provision does, however, take a slightly different approach.  According to subsection 330(6)(b), the fact that a person was bound by legal professional privilege will excuse a failure to report.  Furthermore it is even possible that the duties of confidentiality of other professionals would also excuse a failure to report as under subsection 330(6)(a) which states that a person has not committed an offence if he has a reasonable excuse for not reporting although as has already been explained the Act is not clear on this.

It is perhaps not surprising that the Proceeds of Crime Act recognises and indeed encourages reporting by professionals as this fits with other duties to report.  A professional duty of confidentiality did not excuse a person from the duties to report under misprision of felony and in more recent years the trend has been towards professionals having an increased duty to report.  For example, whilst the earlier duty to report terrorism in section 19 the Prevention of Terrorism (Temporary Provisions) Act 1989 applied to both professionals and non-professionals, the current duty to report terrorism is limited to professionals and information that they acquire through their profession.  Furthermore, although English criminal law has been reluctant to impose positive criminal law duties, such as duties to rescue, it has been prepared to impose duties to rescue on certain people because of their professions (R. v Haines (1847) 2 Car & K 368; R v David Hughes (1857) 7 Cox CC 547; R v Pittwood (1902) 19 TLR 37; Glazebrook, 1960).  Although this is partly because rescue or reporting crime may be more effective and reliable if restricted to professionals, another reason for the increased duty to rescue or report of professionals is that these duties are less an infringement of autonomy.  By choosing to carry out a profession, the individual is assumed to have chosen the responsibilities and duties that come with it.   For these reasons, it is perhaps not surprising that in English criminal law professionals have an increased duty to report.   In contrast in France the non-reporting and failing to rescue offences apply to all the population. This may be because there is an acceptance in French law that there are rights and responsibilities that come with French citizenship.  Interestingly, this view was prevalent post World War 2 when the duties were introduced. The Constitution of the Fourth Republic shows a clear move away from a liberal interpretation of rights towards a view of the State having positive duties towards her citizens and this approach is perhaps mirrored in the positive duties that the citizen has towards others.

Would a duty to report increase reporting?

A duty to report makes it clear that reporting is right. It might be supposed therefore that it supports those who choose to report by clearly promoting their behaviour and it increases reporting by persuading otherwise reluctant reporters to reporter.  Therefore, in order to determine whether duties to report are effective it is necessary to consider whether they do increase reporting.  In this respect, the French offences of failing to report do not offer much support.  Article 434-1 is rarely prosecuted and it is therefore not well known and as a result unlikely to have much of an impact. Furthermore, whilst the serious offences covered by Article 434-1 are well reported, this is more likely to be because of their seriousness which means they are easier to discover and there is greater sympathy with any victims. In other words, in France it is likely that most crimes are reported because people choose to than because of the threat of punishment under Article 434-1.   Similarly, whilst Article 434-3 is better known and there has been an increase in the reporting of child abuse since its introduction, this could be due to increased awareness of child abuse rather than purely because there is a duty to report.

Clearly then the experience of mandatory reporting in France does not prove that duties to report increase reporting.  In fact, their effect on reporting has arguably been negligible.  Nevertheless, it is possible that the duties to report in the Proceeds of Crime Act 2002 would be more effective in encouraging reporting than Articles 434-1, 434-2 and 434-3 have been.  One difference is that the Proceeds of Crime Act 2002 is more extensive and is not focused on offences that are particularly likely to be voluntarily reported. Another important difference is that the professionals covered by the Proceeds of Crime Act 2002 are not only likely to be aware that they have a duty to report, they are arguably more likely to comply with such a duty that the layperson. 

Finally, there is the issue of how onerous these duties to report are and whether their cost is justified by their benefits. Here it is arguable that lack of clarity and confusion cause the most harm.  A professional who has a clear duty to report which overrides everything else may ironically be in an easier position than a professional who feels that he may have to report, but whose decision to report may have to be justified and may actually be more injurious to his relationship with clients.  In this respect, the decision in Bowman v Fels is to be welcomed.  It has clearly excluded litigation and the preparation for that litigation from section 328, it only remains to be seen now how other solicitor/client actions will be perceived and how the duties of other professionals will be viewed.

Conclusion

When they were introduced the duties to report were very controversial and spawned concerns amongst lawyers that they would not be able to guard their client’s confidentiality and that their ability to work for their clients would be severely hampered. The recent judgement in Bowman v Fels partially, at least, mitigates these fears.  Moreover, the experience of professionals in France suggests that even when they have a duty to report, this has not significantly hampered their work or effectiveness.  On the other hand though, it could be noted that whilst the French experience does not produce a dire warning of the effects of mandatory reporting, nor is it clear evidence of its benefits.  There is little to suggest that it has increased useful reporting.

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