Legal professional privilege and attorney secrecy in the EU the landscape after the Jones/ Freshfields firm raids.

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1 Legal professional privilege and attorney secrecy in the EU the landscape after the Jones/ Freshfields firm raids. Prof. Dr. Eckart Brödermann LL.M. (Harvard), Attorney-at-law (New York), Maître en droit (Paris), FCIArb (London) Certified Specialist for Cross-Border Economic Law, Hamburg Bar (Member of the Board) Brödermann Jahn RA GmbH 09 November 2017

2 Table of Content Legal professional privilege and attorney secrecy in the EU I. Legal Framework Comparison of the concepts The legal foundation of attorney secrecy in the context of criminal investigations II. Recent Incidents Freshfields Jones Day III. Legal Remedies IV. Evaluation Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 2

3 Comparison of the concepts U.S. Common Law Legal Professional Privilege Attorney Secrecy German Civil Law Exception to the general duty of disclosure. Imposes a personal secrecy obligation on the attorney. The client as well as the attorney may invoke the privilege. The attorney must claim attorney secrecy during judicial proceeding. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 3

4 Comparison of the concepts U.S. Common Law Part of substantive law German Civil Law Part of procedural law T h e p r i v i l e g e c o v e r s a n y communication, excluding facts that are underlying the communication between the client and his attorney (or vice versa). In-house counsel is treated in the same way as outside counsel. Covers everything the attorney knows about his clients affairs, including facts. Attorney Secrecy does not apply to Inhouse counsel. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 4

5 Legal Framework 2. The legal foundation of attorney secrecy in the context of criminal investigations Criminal investigations of authorities', especially firm raids, interfere with fundamental rights of the affected party, such as: Article 13 of the German Constitution ( GG ) inviolability of the home; Art. 12 GG freedom to engage in an occupation; Art. 14 GG inviolability of property; Art. 2 para 1 in conjunction with Art. 1 para 1 GG - right to informational selfdetermination; Art. 20 para 3 GG the rule of law Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 5

6 Legal Framework Against this background, criminal investigations require a prerequisite of a legal foundation, e.g. Section 102 para 1 of the Code of Criminal Procedure (Strafprozessordnung StPO"): as a legal base for a search warrant against an attorney as a suspect, it is expected that the search is leading to the discovery of evidence Section 103 para 1 StPO: as a legal base for a search warrant at a attorney as a unsuspected third party, if there is a reasonable expectation (because of proven facts) that the search is leading to the discovery of evidence Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 6

Legal Framework The judge as a neutral and independent body controlling Furthermore a measure which is based on section 102 or 103 StPO may be permitted only by judicial order (sec.

7 Legal Framework The judge as a neutral and independent body controlling Furthermore a measure which is based on section 102 or 103 StPO may be permitted only by judicial order (sec. 105 StPO) upon application of the prosecutor. In view of the interference into fundamental rights, the standard for such judicial order is high (Identification of criminal defense, purpose of search, precise description of the searched evidence) proportionality test Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 7

8 Legal Framework Proportionality test of the judge: The measure has to be necessary for the investigation and prosecution of the criminal offence, which is not the case if the objective pursued can be attained by means of a less restrictive measure. The measure has to be in proportional manner in relation to the degree of suspicion, gravity of the accused offense and the level of the expected sentence. The court has to consider, if on the present status of investigations, a conviction is highly probable. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 8

9 Legal Framework Prohibition of confiscation of evidence: The judicial order of a search is illegal, if the searched evidence is covered by the prohibition of confiscation of evidence (sec. 97 StPO). The prohibition includes any piece of information (including documents) which a client passes to his attorney (section 97 (2) StPO). The form of the information is irrelevant. Oral statements, recordings, printed documents etc. are covered. Sec. 97 StPO aims to prevent a circumvention of the attorney s right to refuse testimony according to Sec. 53 para (2) and (3) StPO. Included by section 53 para (2) and (3) StPO are attorneys with a secret in his professional capacity or pursuit thereof if the secret is related to his profession as attorney (e.g. a working document). Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 9

10 Legal Framework Exceptions: If the search warrant is addressed against a attorney as a suspect (sec. 102 StPO) sec. 97 StPO does not apply (more strict requirements are applicable for defender). However the admissibility of the evidence obtained is limited to the process of the attorney and the person involved in his offense. The prohibition does not apply if the seized evidence was used in or arose from an offense ( Deliktsgegenstände ) Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 10

11 Legal Framework The admissibility of evidence from internal investigations: As to the question of admissibility of evidence sec. 160a StPO shall apply as a subsidiary source of law. v Accordingly, criminal investigations cannot be conducted against an attorney in order to attain information that would be covered by the attorney s right to refuse testimony. However, documents and information of a attorney out of internal investigations do not fall under sec. 160a StPO (they may be seized by the prosecutor). This is due to the aspect, that there is no attorney secrecy for the benefit of the accused associate of the client. v Therefore these documents do not fall under the prohibit of confiscation of evidence. v Exception: If the mandate is to defend the client. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 11

Recent Incidents Freshfields Bruckhaus Deringer s Frankfurt office was searched in connection with an investigation being carried out by the city s Public Prosecutors Office and relates to advice

12 Recent Incidents Freshfields Bruckhaus Deringer s Frankfurt office was searched in connection with an investigation being carried out by the city s Public Prosecutors Office and relates to advice concerning a former client s cum-ex transactions. There is no information on which legal foundation the search warrant was based on. It can only be assumed that it was based on sec. 102 (1) StPO (whereby misuse of the prosecutor is not excluded). Sometimes prosecutors tend to circumvent sec. 97 StPO by accusing the responsible partner of a law firm of assistance in the criminal action, thereby making him also to an accused person. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 12

13 Recent Incidents However, the application for a judicial order by the German Parliament inquiry committee was rejected by the German Supreme Court at 02 February 2017 (file number 1 Bgs 74/14) The German Supreme Court could not detect a sufficient connection between the object of the investigation of the German Parliament inquiry committee (determinate of the background of misconduct by the finance management) and the search. Further developments remain to be seen. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 13

14 Legal Remedies Jones Day Internal Investigations German authorities searched the offices of Jones Day which Volkswagen hired to conduct an internal investigation of its emissions fraud. The search warrant was based on sec. 103 (1) StPO. Following the raid, Jones Day pushed back against authorities' ability to use the information gleaned during the raid, calling the search and investigation "unacceptable in every respect. 25 July 2017: Upon request of Jones Day, Germany's Federal Constitutional Court held that the Munich prosecutor's office must turn over to the court all information taken during the search and that the government cannot use the data, at least until a decision has been made on challenges related to the constitutionality of the search. It would be premature use of the material could harm the law firm and its clients more than the prosecution. Further developments remain to be seen. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 14

15 Evaluation A functioning legal system. A distinction between defense lawyers and other lawyers. A distinction between defending a case and performing an internal investigation. Decisions of the legislator. Misuse of career driven prosecutors exist in any legal system. If that was the case here, we do not know. Prof. Dr. Eckart Brödermann Legal Professional Privilege and Attorney Secrecy 09 November 2017 page 15

16 Thank you! Questions? Prof. Dr. Eckart Brödermann LL.M. (Harvard), Attorney-at-law (New York), Maître en droit (Paris), FCIArb (London) Certified Specialist for Cross-Border Economic Law, Hamburg Bar (Member of the Board) Brödermann Jahn RA GmbH ABC-Straße Hamburg 09 November 2017

JONES DAY DAWN RAID VS. ATTORNEY-CLIENT PRIVILEGE

CLIENT ALERT GERMANY JONES DAY DAWN RAID VS. ATTORNEY-CLIENT PRIVILEGE by Dr. Oliver Sahan and Dr. Andreas Minkoff Dr. Oliver Sahan sahan@roxin.de Key Notes Dr. Andreas Minkoff minkoff@roxin.de ROXIN Rechtsanwälte