Legal Privilege for Information in Investigations in Germany – New Developments

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For companies conducting an internal investigation of potential wrongdoing in Germany, one important consideration is to protect the confidentiality of the information developed. Given court decisions in Germany which hold that the work of inside counsel is not covered by the attorney-client privilege, companies generally turn to outside counsel to conduct internal investigations, in part to avail themselves of legal privilege protections such as that offered by section 160a of the German Code of Criminal Procedure (Strafprozessordnung, StPO), which generally protects information held by outside attorneys from prosecutorial measures on the grounds of privilege (see alert “Amendment of German Code of Criminal Procedure broadens Scope of Legal Professional Privilege” of 2 February 2011 on the latest amendment of this provision).

Reliance on the protections of section 160a StPO, however, has remained subject to considerable uncertainties. Under German law, the concept of corporate criminal liability does not exist. Accordingly, German law enforcement investigations focus on offences that can only be committed by natural persons. Individuals subject to prosecution (such as members of a corporate management board or supervisory board) are ordinarily viewed as third parties, outside of the attorney-client relationship between the corporation and its outside corporate counsel conducting an internal investigation. This was the basis for a 2010 decision by the Regional Court (Landgericht) of Hamburg, approving the seizure of internal investigation documents from a law firm (decision 608 Qs 18/10 – see alert “Legal Privilege for Information in Investigations in Germany” of 22 August 2011).

A more recent decision, however, has taken a different approach and extended a limited degree of protection to a law firm’s investigation report. The Regional Court (Landgericht) of Mannheim (decision of 3 July 2012 – 24 Gs 1/12) held that the report on an internal investigation conducted by an outside law firm engaged by a corporation was protected from seizure from the law firm’s possession. This is a welcome decision for any corporation faced with the question whether or not to retain outside counsel to investigate suspicions of wrongdoing. While the decision is not binding on other German courts, it enhances the possibilities for outside counsel to claim legal privilege protection for investigation reports and working documents in the outside counsel’s possession.

Please see full alert below for more information.

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Published In: Business Organization Updates, Civil Procedure Updates, Criminal Law Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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