10/10/2013 09:59 EDT | Updated 01/23/2014 06:58 EST

Supreme Court will hear government's appeal over terror financing law

OTTAWA - The Supreme Court of Canada will hear a case that pits lawyer-client confidentiality against the need to track terrorist financing.

The high court today granted the federal government leave to appeal a unanimous ruling from British Columbia's top court.

The B.C. Court of Appeal ruled that lawyers should remain exempt from portions of the federal government's Proceeds of Crimes and Terrorist Financing Act.

The legislation ordered lawyers and financial institutions, among others, to keep records on money transactions in an attempt to stop terrorists and criminals from laundering cash.

All 14 of the country's laws societies joined in the lower court challenge to the law.

As usual, the Supreme Court gave no reasons for its decision to hear the case.

In dismissing the federal government's previous appeal, the B.C. appeal court ruled the law interferes with the independence of lawyers.

The financing law was passed in 1989 and was amended in 2008 to extend the reporting regulations to lawyers and law firms.

The lawyers, represented by the Federation of Law Societies of Canada, concede that requiring lawyers and notaries to take steps to deter criminals from using them to launder money and finance terrorism is a valid goal.

But they argue that the law fails to respect fundamental constitutional principles.

Justice Christopher Hinkson, writing for the appeal court, said the case didn't necessarily turn on the principle of solicitor-client privilege, calling it a "secondary concern."

"That said, in my opinion the independence of the bar is a principle of fundamental justice with which the regime interferes to an unacceptable degree," he wrote.