Federal Constitutional Court draws formal limits to the prohibition of seizure of evidence on lawyers' premises

by White & Case LLP
Contact

White & Case LLP

The protection from seizure by law enforcement, which the client-attorney privilege affords to the findings gathered by lawyers who are commissioned with internal investigations at businesses, has narrow limits. The affiliate of a law firm's client has been denied protection from seizure by the German Federal Constitutional Court (Bundesverfassungsgericht), highlighting the crucial role played by the actual existence of a client-attorney relationship.1 This adds merit to the coalition government's declared intention to create special rules for internal investigations.

The facts of the case

In September 2015, Volkswagen AG had asked a U.S.-based law firm to conduct internal investigations, to provide legal advice, and to represent them vis-a-vis the U.S. authorities (which had initiated criminal investigations against Volkswagen Group earlier in 2015 over emission figures). The said internal investigations extended inter alia to Audi AG, with the consent of the latter (who however had not itself commissioned the law firm with such investigations). In Germany, public prosecutors in Braunschweig and Munich are pursuing the case. The investigations by the public prosecutor's office in Munich concern Audi AG.

Upon a motion by the public prosecutor's office in Munich, the Amtsgericht in Munich in March 2017 ordered a search of the business premises in Munich of the law firm commissioned by the automotive company. In the course of the search, numerous files as well as a sizable amount of electronic records were secured – in some cases by accessing servers located in Belgium. Legal remedies were invoked against these measures, but without any avail – with the exception of the seizure of material in Belgium, which was found to be unlawful in the absence of a formal request for judicial assistance. In due course, Volkswagen AG, the law firm employed by them, and three of their lawyers all filed their own constitutional complaints against the search and the securing of documents. A preliminary injunction was initially successful in preventing the use by law enforcement of the secured material.2 In the main proceedings, the Constitutional Court now decided against admitting the constitutional complaints for a decision on the merits.

Volkswagen cannot invoke rules prohibiting seizure

All the constitutional complaints have thus turned out unsuccessful, and the public prosecutor's office in Munich may now proceed and use the secured material. The relevant issue was whether and to what degree German criminal procedural law draws limits to the search and the related securing of files and data. "Other items" covered by the attorney's right to refuse to testify may principally be subject to the prohibition of seizure by law enforcement under Sec. 97 (1) No. 3 of the German Code of Criminal Procedure. However, according to the prevailing interpretation of the law, this presupposes that the material in question originated from a pre-existing relationship between the attorney and a party who has been accused in a specific criminal trial or specific proceedings on an offense or misdemeanor. Internal investigations are not covered by this prohibition of seizure, unless the client is at the same time the accused party in proceedings, according to various court rulings.

The Constitutional Court believes this interpretation is admissible under constitutional law, arguing that any other interpretation would open the gates to abuse: evidence could be intentionally placed on the premises of lawyers' offices which are turned into "safe houses", and thus removed from the reach of law enforcement. A business which is concerned that it may in the future become the subject of criminal investigations and is therefore ordering legal counsel to perform an internal investigation does not attain a status equivalent to that of an "accused party".

Within the context of the investigations against Audi, Volkswagen AG could not be considered an "accused" party in criminal proceedings, and thus has no recourse to the prohibition of seizure pursuant to Sec. 97 of the Code of Criminal Procedure. Responding to Volkswagen’s defense, the Constitutional Court says that the criminal investigation conducted by the public prosecutor's office in Braunschweig against Volkswagen must be strictly differentiated from the Munich proceedings against Audi. The Constitution does not suggest that subsidiaries should be brought within the fold of a protected client-attorney relationship between their parent company and a lawyer, or that the parent company should be allowed to invoke the prohibition of seizure because its subsidiary's situation is similar to that of a party accused of a criminal offense.

The defense built on Sec. 160a of the Code of Criminal Procedure (Measures towards persons bound by a professional duty of secrecy who have a right to refuse to testify) was considered inadmissible, firstly because Sec. 97 represents a special law and thus overrides the more general provisions of Sec. 160a, and secondly because effective law enforcement would be unduly affected if one derived an absolute prohibition of collecting and using evidence from Sec. 160a.

In the consequence, this means that the results of internal investigations by law firms enjoy only protection under the law to the extent that the relevant interventions by the authorities are targeted at the business which commissioned the internal investigations, and which finds itself in a role similar to that of the accused party. However, if the search conducted on the premises of a given law firm concerns another business (which is not itself the client ordering the internal investigations), then the (incriminating) documentation found by law enforcement is not protected from seizure. In other words, such documents and records do not come within the purview of client-attorney privilege.

Lawyers' individual complaints were inadmissible

As to the constitutional complaints filed by individual lawyers of a firm, the Constitutional Court finds them inadmissible in the first place. According to the Court, these lawyers could not invoke Article 13 (1) of the German Basic Law (Grundgesetz) (which guarantees the inviolability of business premises) because this right can only be held and invoked by the partnership itself but not by individual employees. Nor may a violation of the fundamental right to freely pursue one's profession (Art. 12 of the Basic Law) be inferred: measures taken under criminal procedural law show no tendency to regulate individual occupations, seeing as they are being applied indiscriminately to everyone who is charged with a crime. The right to informational self-determination could not have been violated because the search order was not directed at obtaining personal data of individual lawyers but at obtaining data collected and generated by (and thus attributable to) the partnership. The right to a fair trial (Art. 2 in conjunction with Art. 20 (3) of the Basic Law) was not violated because the lawyers were not parties to the proceedings.

International law firm holds no fundamental rights

The constitutional complaint by the law firm as a whole was also declared inadmissible. As a partnership organized under U.S. law, it has no fundamental rights in Germany (cf. Art. (3) of the Basic Law).

While this does not apply in the same way to German law firms, their eligibility as holders of fundamental rights ultimately lends them no superior protection from seizures. International firms, too, may fight seizures of evidence in the general courts. What is more, the Constitutional Court, in ruling on the potential violation of fundamental rights of VW, has given substantial preference to the efficiency of law enforcement and to avoiding the risk that "safe houses" may be created. These deliberations on the limitations to the prohibition of seizure apply equally to a German firm in an advisory role.

Consequences of the ruling

The Constitutional Court has upheld previous jurisprudence of the general courts on the limitations to the prohibition of seizure of evidence at law firms. In line with this case law, the prohibition of seizure only holds if there exists a client-attorney relationship between the law firm and a specific (group) company, and if the company's status in the given criminal trial or offense procedure is equivalent to that of an accused party. These limitations to the prohibition of seizure attain special relevance in group-wide internal investigations. Creating a broadly conceived client-attorney relationship may be advisable to uphold as much of the prohibition of seizure as possible. If such a relationship can be shown to exist also for individual group members, the searched law firm ought to be able, even under the current rulings, to invoke the prohibition of seizure if and when criminal proceedings are initiated against their client (that relate to the specific mandate). In such a case, it will be of no concern whether the firm that was asked to perform the internal investigations is based in Germany or abroad.

In its coalition agreement3, the new German federal government has vowed to create "statutory provisions" for internal investigations, "with a particular view to secured documents and the right to conduct searches". It also declared that it wants to "create legal incentives for companies to assist the authorities through 'internal investigations' and the subsequent disclosure of findings obtained in such investigations." In the wake of the Constitutional Court ruling discussed in this Client Alert, the need for such special statutory provisions governing internal investigations has become self-evident.

Click here to download PDF.

1 Case reference 2 BvR 1405/17, 2 BvR 1780/17, 2 BvR 1562/17, 2 BvR 1287/17, 2 BvR 1583/17
2 Resolution of 15 March 2017 – 2 BvR 1405/17. This preliminary injunction was extended by a six-month period by way of another resolution of 09 January 2018.
3 "Ein neuer Aufbruch für Europa, Eine neue Dynamik für Deutschland, Ein neuer Zusammenhalt für unser Land" (A new awakening for Europe; a new dynamic for Germany; new cohesion for our country). Coalition agreement between CDU, CSU, and SPD, 19th legislative term, Recital 5895 et seq.

[View source.]

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.

© White & Case LLP | Attorney Advertising

Written by:

White & Case LLP
Contact
more
less

White & Case LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.