Recent case law in the UK and a raid in Germany have reignited the discussion about the protection provided by attorney-client privilege in criminal and internal investigations. In a ruling on 8 May 2017, a judge in the UK ordered mining company Eurasian Natural Resources to disclose certain attorney-produced documents to the Serious Fraud Office. In Germany, prosecutors raided the Munich offices of the law firm representing Volkswagen. Although there are important differences in the national legislation of different countries, legal privilege is currently also a subject of debate in the Netherlands. Earlier this year, the Netherlands Bar wrote a letter to the Dutch parliament, expressing its concerns about proposed restrictions of legal privilege. According to the Netherlands Bar, professional legal privilege is based on a fundamental legal principle intended to protect the interests of citizens against the government. Everyone should be able to seek advice and assistance from a lawyer without fear of disclosure. De Brauw believes that legal privilege should continue to be guaranteed and that parties should be able to communicate freely with legal counsel without the possibility of shared information being disclosed to third parties – including in situations where the party is facing a criminal investigation or conducting an internal investigation. We will, of course, keep you informed of further developments.
In a recent ruling, the UK High Court of Justice found that interview notes (prepared by a company’s external lawyers as part of an internal investigation into allegations of corruption) are not protected by legal privilege. Mining company Eurasian Natural Resources (ENRC) was ordered to hand over certain attorney-produced documents to the Serious Fraud Office (SFO), which is investigating ENRC for alleged fraud, bribery and corruption in Kazakhstan and an unnamed African country. In connection with this criminal investigation, the SFO had requested the production of documents. ENRC refused, stating that the documents were covered by UK litigation privilege, legal advice privilege, or both.
The documents requested by the SFO fell into four categories:
In the UK, legal professional privilege is not protected as a general right – UK law differs in this respect from Dutch law. UK law distinguishes between litigation privilege and legal advice privilege. Legal advice privilege only applies to communication between a lawyer and a client, and not to communication with a third party. Litigation privilege protects communication within a broader group, but only applies – in short – in cases of reasonably anticipated, adversarial litigation.
The High Court:
ENRC is currently seeking to appeal the decision. We will continue to monitor this case and update you on any new developments.
In the Volkswagen/Jones Day case, German prosecutors raided the Munich offices of the law firm conducting Volkswagen’s internal investigation since 2015. According to the New York Times, the German justice department seems to have suspected that the law firm was holding back crucial information.
Volkswagen in a press release responded by stating: “We consider the action of the Public Prosecutor’s Office in Munich to be unacceptable in every respect. In our opinion, a search carried out on the premises of a law firm which has been instructed by a company is a clear breach of the principles of the rule of law laid down in the Code of Criminal Procedure.”
In Juve, Germany’s main online source of legal news, a press officer of the regional court in Munich (Landgericht München), confirmed that the court had ruled on 10 May 2017 that the raid at Jones Day was lawful. The grounds for this decision have not been made public.
In Germany, legal privilege is rather limited and is not a general principle.
In the Netherlands, legal privilege has also been the subject of debate.
In the past few years, the Dutch Public Prosecution Service (DPPS) began stating that it believes legal privilege is too wide in scope and should be restricted. A DPPS spokesperson, in an interview with a Dutch newspaper, said that it was no longer clear which part of legal communication or information falls within the scope of legal privilege. According to the spokesperson, the expansion of “certain tasks” taken on by lawyers has led to uncertainty in this respect. The DPPS does not believe that all “new” tasks fit under legal privilege, and this leads to improper use and abuse.
In February 2017, the Netherlands Bar expressed its concerns in a letter to the Dutch parliament. The reason for this letter was a proposal by the State Secretary of Finance to limit tax-related legal privilege. According to the Netherlands Bar, the general principle of legal privilege cannot be limited for the benefit of just one authority in a particular situation, such as the Dutch Revenue Service. It is incorrect to regard a tax matter as different from any other matter in deciding whether there is legal privilege.
These developments, in the Netherlands and elsewhere, illustrate that legal privilege is increasingly being challenged. This makes the idea of embedding legal privilege in the Netherlands more relevant, and should also prompt companies to properly structure internal investigations to ensure that the investigation is indeed protected by legal privilege. This is all the more relevant in cross-border investigations, where differing rules may apply to legal privilege. The Dutch legislature is currently reviewing the scope of legal privilege and has held meetings with the DPPS, the Netherlands Bar and the Royal Dutch Association of Civil-Law Notaries about its scope. A more detailed procedure will probably be introduced in the Dutch Code of Criminal Procedure.
As also indicated by the Netherlands Bar, we believe it important that legal privilege continue to be guaranteed and that parties be able to communicate freely with each other, especially in situations where criminal investigations and sanctions are to be expected. They should be able to conduct internal investigations without the possibility of attorney-client information being disclosed to authorities.
Please contact us at De Brauw if you have any questions or require further guidance regarding legal privilege.
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