How will the revelations resulting from the Mossack Fonseca leak impact lawyers?
The Panama Papers leak could lead to “a flurry of tax and crime investigations” and, ultimately, work for civil and crime litigators, a senior litigation lawyer has predicted.
About 11.5 million client files were leaked from Panamanian law firm, Mossack Fonseca. Public indignation about secretive tax avoidance schemes followed.
Writing in NLJ this week, David Greene, NLJ consultant editor and senior partner at Edwin Coe, considers the consequences of the Panama revelations for lawyers: “First, the Solicitors Regulation Authority (SRA), getting in on the act, has called on lawyers named in the Panama papers to ensure they have acted lawfully. Second, [HMRC] are likely to highlight avoidance schemes and seek to set them aside. Third, judges caught up in the moral maelstrom are likely to be more sympathetic to [HMRC’s] position declaring schemes unlawful.
“Fourth, the Panama disclosures will now be pored over by the Police and Revenue and lead to a flurry of tax and crime investigations. Civil and crime litigators will get busy again.”
The SRA has written to law firms identified in the media as being linked to the Panama Papers to ask for assurances that they have looked into the matter and have acted appropriately. The Financial Conduct Authority has also contacted banks to check if they have links to Mossack Fonseca, with a 15 April deadline for responses.
Greene also warns that some tax avoidance schemes, notably film finance avoidance schemes have been “the subject of much litigation and now convictions for conspiracy to defraud the Revenue”.
Mossack Fonseca has published a statement on its website denying any wrongdoing and defending its integrity. It reads: “Recent media reports have portrayed an inaccurate view of the services that we provide and, despite our efforts to correct the record, misrepresented the nature of our work and its role in global financial markets.
“These reports rely on supposition and stereotypes, and play on the public’s lack of familiarity with the work of firms like ours. The unfortunate irony is that the materials on which these reports are based actually show the high standards we operate under.”
