The Supreme Court has released its judgment in Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7, holding that some of the obligations which federal legislation intended to combat money-laundering and the financing of terrorism cannot be constitutionally applied to lawyers. It thus (largely) confirmed the decision of the British Columbia Court of Appeal in Federation of Law Societies of Canada v. Canada (Attorney General), 2013 BCCA 147 ― but not its reasoning, which had elevated the “independence of the bar” to the status of a principle of fundamental justice protected by s. 7 of the Charter. Having denounced that reasoning as “disturbing,” I am happy to see the Supreme Court reject it, although even its narrower decision is open to some criticism.
The Federation of Law Societies challenged two sets of provisions. One allowed for warrantless searches of lawyers’ offices in the pursuit of information related to money laundering and terrorism financing, with limited protections for solicitor client privilege. The other imposed substantial identity-verification and record-keeping requirements on legal professionals. Neither, the Supreme Court found, could stand up to constitutional scrutiny.
The search provisions, it unanimously found, were in breach of s. 8 of the Charter, which prohibits unreasonable searches and seizures. In Justice Cromwell’s words, the law “authorizes sweeping law office searches which inherently risk breaching solicitor-client privilege,”  contrary to the requirements set out in a case decided a dozen years ago, Lavallee, Rackel & Heintz v. Canada (Attorney General),  3 S.C.R. 209, 2002 SCC 61. In particular, there was no notice to the client whose potentially privileged communications with his or her lawyer the government could seek to seize; no opportunity for the client (as opposed to the lawyer), or some independent entity to assert privilege; and no opportunity for a judge to refuse the communication of privileged documents in the absence of a challenge to the communication. Furthermore, the legislation failed to provide that “before searching a law office, the authorities must satisfy a judicial officer that there exists no other reasonable alternative to the search.”  These defects made the search provisions unreasonable, and thus contrary to s. 8. Nor could it be justified under s. 1 of the Charter, as the Court had set out some less impairing alternatives in Lavallee ― which Parliament failed to enact.
As for the identification and record-keeping provisions, the Court was also unanimous in finding that they infringed s. 7 of the Charter. All judges agreed that as failure to comply with these provisions exposed lawyers to imprisonment, their right to liberty was obviously engaged. However, they disagreed about the nature of the principle of fundamental justice with which these provisions did not comport.
Importantly, the majority (with which the concurrence does not disagree on this point) does not accept the “independence of the bar” as a principle of fundamental justice. This principle, championed by the Federation of Law Societies and accepted by the Court of Appeal, is capable of very broad application. The federal government argued “that the Court of Appeal’s broad definition of the independence of the bar essentially places lawyers above the law,”  a position in which the majority found “considerable merit”  although it concluded that it did not need to formally decide the matter. The majority added that although
self-regulation is certainly the means by which legislatures have chosen in this country to protect the independence of the bar … [it did] not have to decide here whether that legislative choice is in any respect constitutionally required. 
Rather, for the majority, the principle involved was “that the state cannot impose duties on lawyers that undermine their duty of commitment to their clients’ causes.”  The lawyers’ duty of commitment is, in its view, already a crucial part of the administration of justice in Canada, as part of a broader duty of loyalty, and universally recognized as such. Furthermore, although “this standard is far from self-applying, it has proven to be sufficiently precise to enable the courts to apply it in widely divergent fact situations.”  The state, therefore,
cannot impose duties on lawyers that undermine the lawyer’s compliance with that duty, either in fact or in the perception of a reasonable person, fully apprised of all of the relevant circumstances and having thought the matter through. The paradigm case of such interference would be state-imposed duties on lawyers that conflict with or otherwise undermine compliance with the lawyer’s duty of commitment to serving the client’s legitimate interests. 
The majority concluded that the impugned legislation did not comply with the principle of fundamental justice it articulated. The legal profession’s self-regulatory bodies have developed standards as to the information that lawyers ought to collect from clients, but the legislation required lawyers to collect much more information than (they thought) necessary in order to ensure ethical and effective representation ― and, potentially, turn it over to the state in breach of solicitor-client privilege. While
[p]rofessional ethical standards … cannot dictate to Parliament what the public interest requires or set the constitutional parameters for legislation[, they] do provide evidence of a strong consensus in the profession as to what ethical practice in relation to these issues requires. 
A departure from these standards would create the impression, both in the minds of (reasonable) lawyers and their (reasonable) clients, of a potential conflict with the lawyers’ duty of commitment.
The concurrence (the Chief Justice and Justice Moldaver) thought that respect for that duty is too vague a requirement to amount to a principle of fundamental justice. Because the nature of a lawyer’s duty to his or her client depends on “the nature of the retainer … as well as … other circumstances … [i]t does not … provide a workable constitutional standard.”  Instead, the concurrence would have considered the respect of solicitor-client privilege as the principle of fundamental justice involved.
Some of the initial reactions I have seen were also critical of the majority opinion’s recognition of the duty of commitment as new principle of fundamental justice. For my part, I think that Justice Cromwell provides a pretty compelling argument in its defence. That a lawyer ought to be, and appear to be, committed to his or her clients’ interests and to no others’ is surely a well established principle in our legal system, and at least arguably a fundamental one. It would indeed be troubling if the state were able easily to interfere with that duty.
What I find more troubling is the majority’s application of the principle it identifies. Mostly, that’s because, although Justice Cromwell says that standards adopted by professional self-regulatory bodies “cannot … set constitutional” requirements, they seem to have exactly that effect in his reasons. If a requirement that lawyers depart from professional standards is inherently constitutionally suspicious, then I fail to see how the professional standards are not becoming, ipso facto, constitutional ones. And I don’t think that it is right that ethical standards developed by professional regulatory organizations can, by virtue simply of existing, acquire such a status.
I am greatly relieved, however, the the court all-but-rejected enshrining a (potentially) expansive view of the independence of the bar as a constitutional principle. As important as it is for lawyers to have the freedom to zealously represent unpopular clients, including against the government, it is at least not obvious that the cartelization of legal services and consequent impediments to access to justice, in which the self-regulation of the legal profession results, is necessary for this pubic good to be achieved. It is very good news indeed that the Supreme Court has not committed us to that regulatory approach.