Analysis
21 January 2022

Impacts of the attorney-client privilege reform on white-collar practice

On 22 December 2021, Law n° 2021-1729 for confidence in the judicial institution was enacted. Following the initiative of the Minister of Justice , this Law has been the subject of several controversies concerning the attorney-client privilege.

 

Although it reaffirms the principle of protection of this privilege, both in matters of defense and counsel, the final version that was adopted integrates exceptions regarding some white-collar offences. If these exceptions are limited to certain specific situations, the distinction made between defense and counsel activities leads to some questions that will certainly be discussed and will have to be clarified, probably in court.

 

I.  Consecration of the attorney-client privilege’s protection for both counsel and defense activities

The attorney-client privilege is one of the fundamental guarantees for the defense of any individual[1]. As a fundamental principle of the profession’s practice enshrined in Law n°71 – 1130 of 31 December 1971 reforming certain judicial and legal professions, this attorney-privilege provides that “[i]n all matters, whether in the field of counsel or defense, consultations addressed by an attorney to his client or intended for the latter, correspondence exchanged between the client and his attorney, between the attorney and his fellows with the exception of those marked as “official”, interview notes and, more generally, all documents in the case are covered by attorney-client privilege”.

The attorney-client privilege covers all information that the attorney may have received by virtue of his position. This includes confidences received from the client and information received from third parties in the context of the case, as well as any element that attorney may have observed, discovered, or deduced from his professional[2] The National Internal Regulations (“RIN”) of the attorney profession specify in article 2.1 that this attorney-client privilege is of public order, general, absolute, and unlimited[3]. Thus, except in the context of his own defense or in cases of declarations or disclosures provided for or authorized by Law, the attorney is bound by this privilege and cannot be released from it, not even by his client[4].

In recent years, the Cour de cassation criminal chamber’s case law has tended to limit the scope of this legally conferred protection. For example, it has been asserted that ascertaining the truth in the context of an investigation prevails over the protection of the attorney-client privilege[5]. Similarly, it has also been held that the scope of the protection was limited to defense activities[6]. This case law trend, qualified by some as contra legem[7], contradicts the letter of 31 December 1971 Law, which protects every element that the client is led to entrust to the attorney, in any form whatsoever, with a view to being counseled or defended.

As introduced in April 2021, the Law’s bill for confidence in the judicial institution initially sought to reverse these valuable gains by inserting a paragraph in the criminal procedure code stating that “respect of the attorney-client privilege in matters of defense is guaranteed during the proceedings under the conditions provided for in this code”, thereby excluding from the privilege’s perimeter the counseling activities[8].

In its promulgated version, the text rectified the case law’s positions regarding the counseling activity and reaffirmed the overall protection conferred by the attorney-client privilege. The Law enshrines in the criminal procedure code that “the respect of the attorney-client privilege, both in matters of defense and counsel, as prescribed by the article 66-5 of the Law n° 71-1130 of 31 December 1971 reforming certain judicial and legal professions, is guaranteed during the criminal procedure under the conditions provided for in this code”[9].

 

II.  The non-opposability of the attorney-client privilege in matters of counsel activities when the information or documents usually protected make it possible to establish proof of certain white collar crime offenses

On 16 and 18 November 2021, the National Assembly and the Senate voted on an amendment proposed by the government modifying article 3 of the Law’s bill. The observations of certain public authorities, considering that the protection of the attorney-client privilege as it stands could interfere with their activities, were apparently heard by the Parliament, which finally opted for a relative and limited effectiveness of the overall protection of this privilege[10].

By this amendment, an article 56-1-2 was included in the criminal procedure code stating that the counsel attorney-client privilege is not opposable to the measures of investigation or inquiry when these relate to the offences of tax fraud, corruption or laundering of these offences, as well as to the offence of financing terrorism, provided that the consultations, correspondence or documents, held or transmitted by the attorney or his client, establish proof of their use for the purposes of committing or facilitating the commission of these offences[11]. This amendment, although controversial, was finally retained in the Law that was promulgated.

The second exception proposed by the Commission Mixte Paritaire consisting in the non-opposability of the attorney-client privilege to the measures of investigation or inquiry when the attorney has been subject of maneuvers or actions with the aim of allowing, in an unintentional way, the commission, the pursuit or the concealment of an offence[12] was finally removed in the final text. This exception had given rise to numerous complaints from the profession due to the inclusion of the term “offence”, which was considered too general[13], making it too imprecise and too broad[14].

Consequently, although it is true that this Law confirms the existence of an attorney-client privilege both in matters of counsel and defense, the limit inserted by article 56-1-2 of the criminal procedure code, and which will come into force as from March 1er, 2022, has, for sure, an incidence on the absolute nature of this privilege since it reduces its scope.

 

III.  The relative impact of this legislative exception to the attorney-client privilege in view of this evidence requirement and the possibility of the liberty and custody judge’s review

The actual relativity of this exception lies in the wording of article 56-1-2, which specifies that certain conditions must be fulfill for this exclusion of the attorney-client privilege to operate. The attorney-client privilege would be non-opposable only in cases where consultations, correspondence, or documents, held or transmitted by the attorney or his client, establish proof of their use for the purposes of committing or facilitating the commission of the said offences[15].

To guarantee this limitation to the breach of the attorney-client privilege regarding these restrictively enumerated assumptions, there is a possibility to contest the seizure of a document and to submit it to the liberty and custody judge’s control, the latter occupying the role of regularity’s guarantor[16]. The Law states in this regard that article 56-1-2 applies without prejudice to the possibility given to the President of the Bar or his representative or to the person at whose premises the search is taking place, to object to the seizure of a document, and consequently, to require that this objection be examined by the liberty and custody judge[17].

However, there are limits to this protection, as to determine whether this condition for exclusion is met, the content of the document will likely be revealed for verification, at least to the liberty and custody judge, thus rendering the attorney-client privilege de facto inoperative[18].

 

IV.  Questions raised by this legislative exception to the attorney-client privilege, especially regarding internal investigations

The terms of the criminal procedure code’s article 56-1-2 referring to “counsel attorney-client privilege” raise questions, since a distinction is now made in the preliminary article of the criminal procedure code between “the respect of the attorney-client privilege, both in matters of defense and counsel”. Should it be understood, as it is written in French, that the non-opposability of the counsel attorney-client privilege to measures of investigation or inquiry, when these relate to certain white-collar offences, is limited to the field of counseling activities? Or a contrario, is it a question of using the word “counsel” as “attorney” without any distinction being made between the defense or counsel activities?

If we were to accept a meaning of this expression that includes a reference to counseling activities only, this would reopen the debate of what falls within the field of counsel or defense activities, and in particular regarding internal investigations.

White-collar practice has been turned upside down over the last few years by the practice of internal investigations, transforming the defense’s traditional approach since it is now possible, in the context of criminal litigation, to conduct its own investigation and to transmit certain elements to the prosecution authorities in the context of cooperation towards a negotiated sanction.

However, although it is part of a general mission of counsel and assistance, the Paris Bar Order asserted that the internal investigation contributes to the defense rights[19], as it aims to determine whether violations of the Law or regulations have been committed and, consequently, to allow the preparation of a defense strategy. Thus, and since it concerns the field of defense and not that of counsel, the legislative exception provided for by article 56-1-2 of the criminal procedure code would not apply. Hence, although it is true that the new legislation has a theoretical impact on white-collar practice and creates uncertainties regarding the protection of individuals, it would not mean that attorney-client privilege would be completely annihilated in this field, as the practice of internal investigations is now established as the reference tool in this discipline.

However, this position has been challenged by some authorities which believe that “[n]ot all elements contained in the report of the internal investigation are necessarily covered by attorney-client privilege“[20].

As regards to internal investigations, it is therefore likely that in addition to a jurisdictional debate on whether the assumptions referred to in article 56-1-2 of the criminal procedure code allowing the non-opposability of the attorney client privilege are actually met, there will be a debate on whether the text only refers to counseling activities and, if applicable, whether the practice of internal investigations is an attorney’s counseling or defense mission.

Debates on the attorney-client privilege in the white-collar practice are therefore not at all over with the promulgation of this Law n° 2021-1729 of 22 December 2021 for confidence in the judicial institution. On the contrary, it seems that certain questions could even rekindle them, especially regarding internal investigations.

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