Internet Newsletter for Lawyers
September/October 2003, by Delia Venables

Updates on past stories....

Money Laundering as it relates to legal services on-line

In his article in the
July/August issue, "On-line Legal Services - are they a Dead Duck?" Michael Kaye raised the very difficult question of how on-line providers of legal services could continue having regard to the due diligence requirements of the new anti-money laundering regime. In particular, he pointed out that the obligation to know your client is personal and non-delegable. This is clear from the fact that criminal liability rests on the individual. It is the individual alone who has duties to discharge.

He has continued to look into the position and he reports that there are many ways in which the duty can be discharged. For example, there is nothing wrong with verifying identity by use of a credit checking organisation. This does not amount to a delegation of responsibility for discharging the obligation; rather, a mechanism by which the duty is discharged. The Skipton Building Society with Dunn & Bradstreet, have just established a joint venture to check identities and there are others, such as Experian, in the market as well. Their checking identity service is a very valuable tool but it by no means relieves the obligation resting on the person to make enquiries not only about identity but also about the nature of the client’s business so that the regulated person knows the rationale for the instruction or transaction.

The degree of due diligence work will vary from case to case. It boils down, at the end of the day, to an exercise in risk assessment/management; in some cases verification of identity by credit check may be sufficient but other cases may require much more. It follows therefore that preparing a simple Will or the affidavit leading to a Grant of Probate may in many cases still be a practical proposition to undertake via an interactive web site but the preparation of a power of attorney or deed poll change of name deed may need greater enquiry.

Michael Kaye is a partner in Kaye Tesler & Co., (, e-mail He is widely known as an innovator in the legal IT sphere and has published many lectures on audio CD. His latest venture is a web based anti-money laundering staff training program, with details at

Digital Rights Management

Laurence Kayre wrote on this topic in the July/August issue, He reports further:

So the copyright wheel comes full circle. Napster, the online song swapping service, will be re-launched as a legal service by its new owners Roxio in time for Xmas (The Times, July 03). But does this mean that the music industry is turning into Father Christmas and giving up its efforts to stop the illegal 'peer to peer' distribution of copyright materials?

Judging by the spate of lawsuits launched recently by the Recording Industry Association of America (RIAA) the answer seems to be no. In recent months, the RIAA launched a series of actions against ADSL providers in the US, including Pacific Bell Internet Services ("PBIS") and Verizon Communications. The RIAA has filed hundreds of subpoenas to compel these ISP's to disclose subscribers' names so that actions for copyright infringement can be pursued against the file swappers.

However, the ISP's are now fighting back. PBIS recently launched a suit to challenge the RIAA's subpoenas. The lawsuit charges that the Digital Millennium Copyright Act (DMCA), which the RIAA says supports its current antipiracy actions, may violate the right to privacy enshrined in the U.S. Constitution. The legal battle is set to continue in the US with copyright infringement actions doing battle with counter-attacks by the proponents of privacy rights, fair use and freedom of speech. Meanwhile, the development of paid-for services, that give consumers of digital music what they want at a price they're willing to pay, can only be good news for the music industry.

Laurence Kaye,, runs a niche legal practice focused on electronic publishing, e-commerce, technology and intellectual property law. His clients range from SME companies to multi-nationals. In addition to his transaction-based work, he also advises a number of media industry bodies on digital media and e-commerce legal issues, including the European Publishers Council and the Digital Content Forum. He has recently worked on the E-Commerce and Copyright Directives.

Later note from the Guardian, 15th August:

Microsoft, together with digital music company OD2 (On Demand Distribution), has launched an internet download service in Europe to sell individual tracks. The software used will be Microsoft's Media Player allowing users to download songs from five major labels - over 200,000 songs - before they are available in the shops.

LCD Website! (or DCA)

Note from Mike Wicksteed:

In the May/June newsletter, I described the new site for the Lord Chancellor's Department, due to be launched during the summer.

No sooner was the issue on peoples' desks than the Government announced the demise of the LCD and the creation of the new Department for Constitutional Affairs.

Also out of the blue came a requirement to assist the Hutton Inquiry. DCA web staff have been busy building, and twice daily maintaining, the Inquiry's website ( which during the first week of Inquiry hearings attracted 48,126 unique visitors who accessed 975,152 pages.

This obviously effected work on the new DCA site, but we still hope to launch in September.

Mike Wicksteed is Head of External Communications at the Department for Constitutional Affairs,

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