Legal Professional Privilege and AML — UK guide
LPP and POCA s.330 in operational practice — the two heads of privilege, the statutory s.330(6) exclusion, the crime/fraud exception, and a six-step decision framework.
By Mehmood Rajoka · Last updated 2026-06-08
TL;DR — Quick Summary
- •Legal Professional Privilege (LPP) and AML reporting obligations sit in structural tension — LPP protects communications between client and lawyer; POCA s.330 requires regulated-sector workers to report suspicion of money laundering. POCA s.330(6) provides the statutory accommodation: privilege circumstances are excluded from the s.330 reporting duty.
- •Two heads of LPP apply: legal advice privilege (communications between lawyer and client for the dominant purpose of giving or receiving legal advice) and litigation privilege (communications related to actual or contemplated litigation).
- •POCA s.330(6)(b) excludes information that came to the legal professional 'in privileged circumstances' — broadly, in the giving of legal advice or in connection with legal proceedings. The exclusion is statutory, not discretionary.
- •The crime/fraud exception applies: privilege does not extend to communications made for the purpose of furthering crime or fraud. A client who consults a lawyer in furtherance of money laundering does not establish privilege over the criminal communication.
- •Application is fact-specific and high-stakes. Misapplication risks both privileged disclosure (regulatory and ethical failing) and missed SAR reporting (POCA s.330 criminal offence). Mid-market firms structure LPP-and-AML decision-making with senior involvement and documented reasoning.
Answer-first summary
How does LPP interact with POCA s.330?
POCA s.330 requires regulated-sector workers — including legal professionals — to report suspicion of money laundering to the NCA. POCA s.330(6)(b) accommodates Legal Professional Privilege by excluding from the reporting duty information that came to the legal professional 'in privileged circumstances'. The exclusion is statutory, not discretionary. Where information genuinely came in privileged circumstances AND the crime/fraud exception does not apply, the s.330 reporting duty does not apply to that information. Misapplication risks both privileged disclosure (regulatory and ethical failing) and missed SAR reporting (POCA s.330 criminal offence).
- s.330(6)(b) excludes privileged-circumstances information from reporting duty
- Crime/fraud exception removes privilege for criminal-purpose communications
- Application is fact-specific and high-stakes
- Mid-market firms structure with senior involvement and documented reasoning
The two heads of LPP
Legal advice privilege
Communications between client and lawyer for the dominant purpose of giving or receiving legal advice. Covers correspondence, attendance notes, drafts of advice — but does not cover communications with third parties even if those communications relate to the legal advice.
Litigation privilege
Communications between client / lawyer and third parties for the dominant purpose of actual or reasonably contemplated litigation. Wider than legal advice privilege — covers witness statements, expert reports, factual investigations conducted in preparation for litigation.
The POCA s.330(6) exclusion in operation
Information in privileged circumstances
POCA s.330(6)(b) excludes from the reporting duty information that came to the legal professional 'in privileged circumstances'. The exclusion is statutory, not discretionary — where the information genuinely came in privileged circumstances, the s.330 reporting duty does not apply to it.
Excluded conduct — the crime/fraud exception
Information received in privileged circumstances is excluded UNLESS the information was disclosed with a view to furthering a criminal purpose. The crime/fraud exception is critical: it prevents privilege from protecting client-lawyer communications made to plan or execute criminal conduct.
Statutory exclusion vs voluntary disclosure
Even where s.330(6) excludes the information from the reporting duty, the lawyer may make a voluntary disclosure if they choose. The exclusion removes the obligation; it does not prohibit reporting. Voluntary disclosure decisions should be made with structured senior involvement and documented reasoning.
Continuing material
Information that comes into the lawyer's possession outside privileged circumstances is not protected by s.330(6) merely because it relates to the same client matter. The fact-specific question is when and how the information was received, not just whose information it is.
Six-step decision framework
Document the reasoning at each step contemporaneously — retrospective reconstruction is materially weaker for SRA inspection:
- 1Identify the information: what specifically did the lawyer come into possession of? Communications? Documents? Inference from client behaviour?
- 2Trace the information's origin: did it come from a client-lawyer communication for the dominant purpose of legal advice (legal advice privilege) or from communications relating to actual or contemplated litigation (litigation privilege)?
- 3Apply the crime/fraud exception: was the communication made with a view to furthering a criminal purpose? The test is the client's purpose, not the lawyer's awareness at the time of the communication
- 4Determine s.330(6) effect: where the information came in privileged circumstances AND the crime/fraud exception does not apply, the s.330 reporting duty is excluded for that information specifically
- 5Consider voluntary disclosure: even where s.330(6) excludes mandatory reporting, the firm can choose to report. The decision should be made with senior involvement and documented reasoning
- 6Where the information falls outside the privileged-circumstances exclusion (e.g. comes from a third party, or the crime/fraud exception applies), the standard s.330 reporting duty engages — escalate to the MLRO
Five common LPP-and-AML mistakes
Treating all client-related information as privileged
Not everything the lawyer learns about a client matter is privileged. Third-party communications, public-record information, the lawyer's own observations of client conduct in non-advice contexts are typically not privileged. Treating all client information as privileged risks missed SAR reporting.
Treating no client information as privileged
Equally, treating client communications as routinely non-privileged risks improper disclosure. The default for client-lawyer communications in advice contexts is that privilege applies; specific facts may rebut that default but reasoned analysis is required.
Applying privilege without considering the crime/fraud exception
Even genuinely privileged communications lose protection where the crime/fraud exception applies. Where suspicion arises that the client may have consulted the lawyer for the purpose of furthering crime, the privilege analysis must include the exception.
MLRO not involved in privilege/SAR decisions
The privilege analysis and the SAR decision are connected. MLRO involvement at the right point — typically after the lawyer has identified that privilege issues are in play — protects both the SAR pipeline and the privilege analysis. Junior staff making the call alone is a known weakness.
Decision not documented contemporaneously
The privilege-versus-SAR analysis should be documented at the time it is made — what information was considered, what privilege analysis was applied, what conclusion was reached, who was involved. Retrospective reconstruction is significantly weaker, and inspections will probe contemporaneous documentation specifically.
FAQ
Answer-first summary
What is Legal Professional Privilege?
Legal Professional Privilege (LPP) is a common-law doctrine protecting certain communications between a client and their lawyer from disclosure. Two heads apply. Legal advice privilege: communications between client and lawyer for the dominant purpose of giving or receiving legal advice. Litigation privilege: communications between client / lawyer and third parties for the dominant purpose of actual or reasonably contemplated litigation. LPP is a fundamental protection of the client-lawyer relationship and is recognised in UK statute and case law.
Answer-first summary
How does LPP interact with POCA s.330?
POCA s.330 requires regulated-sector workers — including legal professionals — to report suspicion of money laundering to the National Crime Agency. POCA s.330(6)(b) accommodates LPP by excluding from the reporting duty information that came to the legal professional 'in privileged circumstances'. The exclusion is statutory, not discretionary. Where information genuinely came in privileged circumstances and the crime/fraud exception does not apply, the s.330 reporting duty does not apply to that specific information.
Answer-first summary
What is the crime/fraud exception?
The crime/fraud exception is a common-law principle (codified through case law) that LPP does not extend to communications made for the purpose of furthering crime or fraud. A client who consults a lawyer in furtherance of money laundering — for example, seeking advice on how to disguise criminal proceeds — does not establish privilege over the criminal-purpose communication. The exception is critical to the POCA s.330(6) analysis: privileged-circumstances information loses POCA s.330(6) protection where the exception applies.
Answer-first summary
Should I report suspicion if it came from privileged communication?
POCA s.330(6) does not require reporting where the information came in privileged circumstances. But the lawyer may make a voluntary disclosure if they choose. The decision is high-stakes — improper disclosure breaches privilege and may breach professional obligations; failure to disclose where the crime/fraud exception applies leaves the lawyer exposed under s.330. Mid-market firms structure this decision with senior involvement and documented reasoning. Junior staff making the call alone is a known weakness.
Answer-first summary
What about information from third parties on a client matter?
POCA s.330(6) protects information that came to the legal professional 'in privileged circumstances'. Communications with third parties — even where related to a client matter — typically do not come in privileged circumstances (legal advice privilege applies to client-lawyer communications; litigation privilege has different scope). Third-party information on a client matter is usually subject to the standard s.330 reporting duty if it raises suspicion of money laundering. The lawyer's analysis should identify the source of the suspicion-triggering information separately from the broader client matter.
Answer-first summary
Does Certivus support LPP-and-AML decision documentation?
Certivus structures the SAR pipeline including documented MLRO decision-making, internal disclosure trails, and the supporting reasoning for each decision. Where LPP analysis is part of the decision (the lawyer concluded that information was protected under s.330(6) or that the crime/fraud exception applied), the documentation can sit within the SAR pipeline record. The substantive LPP analysis itself is a legal-professional judgement; Certivus provides the structured record-keeping that makes that judgement reconstructable for SRA inspection or for the firm's own future reference.