Tag: legal privilege

An Open Letter to a Skeptical Mind

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Open letter to a skeptical mind convinced that a company lawyer cannot be really viewed as independent

“To Whom it may concern:

IF – like in the AM&S and the Akzo Nobel cases – you think that a company lawyer is not able to inherently provide advice with an independent mind

IF you think that a company lawyer can twist or forge his legal advice in order to preserve his or her job

IF you believe that the arm of a company lawyer is easier to twist than any other lawyer’s arm

IF you believe that a company lawyer is hired to close their eyes when they face a violation of the rules

IF you think that a company lawyer, abiding by the rules of its profession could be tempted to be less compliant with its rules of professional conduct and ethics because he works for a company and not a law firm

IF you can convince yourself that any responsible, accountable and serious company client would be willing to remunerate a company lawyer able to advise against his or her firmprofessional conviction

IF you believe that any lawyer’s code of ethics would allowa company lawyer to think dependently

IF you even have the impression that a company lawyer is not a fully-fledged lawyer and could range into a sub-lawyer category

IF you think that a company lawyer is a professional that can afford not to be independent by design and that independency is not a term of art for all lawyers on earth

IF you think that company lawyers’ output does not deserve legal privilege

IF you think that company lawyers are more independent in jurisdictions where they can be part of a bar association or equivalent than the ones working in countries (like France) where they are not allowed to be or remain admitted to the bar

IF you feel that being distant and remote from your client (i.e. in a law firms opposed to a law department) grants the lawyer a supplement of independence

IF you find it nuanced and not over simplistic to think that a law firm is more independent from his clients without whom it could not run a business than a company lawyer is from his only client

IF you really believe that a company lawyer can look at him or herself in the mirror while feeling they cannot advise the company he works for with an objective approach

THEN

Our best prognosis is that it does mean that you have not really been exposed to the reality of what a company lawyer does, it can also mean that you have barely encountered, come close or worked with a company lawyer, and in any event, the quality of the ones you will find within ECLA’s members community.

Download the Company Lawyers: Independent by Design here, to learn more on the Corporate Legal profession, particularly in Europe.

French National Assembly Advances Legal Protections for In-House Counsel

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PARIS – On July 10, 2023, the French Government presented an amendment to Article 19 of Rule 99 of the Rules of Procedure, making significant changes to the role and responsibilities of in-house lawyers in France. The amendment fundamentally reshapes legal advice confidentiality in the corporate sector and improves France’s attractiveness in the global market.

Under this amendment, legal advice drawn up by an in-house lawyer or, at their request and under their supervision, by a member of their legal department, which is done for the benefit of their employer, is considered confidential. In other words, French legal departments providing legal advice to their employers enjoy confidentiality rules when providing said advice.

“This amendment highlights decades of persistence,” said Jonathan Marsh, President of ECLA. “This has been at the forefront for French legal departments, and we are excited to see the French Government agree with our positions to such a large extent. The changes will bring a new era for French businesses – one in which they can globalise their unparalleled competitiveness, unhindered by the evident restrictions that the current regime imposed.”

The amendment introduces rules concerning the confidentiality of legal advice drawn up by in-house lawyers or their team members that, if appropriately labelled and identifiable, cannot be seized or required to be handed over in civil, commercial, or administrative proceedings or litigation. This confidentiality is not applicable in criminal or tax proceedings.

Two key conditions must be met for confidentiality to apply for French in-house counsel. The lawyer, or the member of their team that reports to them, must hold a master’s degree in law (or an equivalent diploma) and must provide proof of initial and continuing training in ethics.

Legal advice under confidentiality rules must be appropriately labelled – confidentiel – consultation juridique juriste d’entreprise, translated as confidential – legal consultation with in-house counsel.

Moreover, new procedures have been established for courts to challenge the alleged confidentiality of documents in case of a dispute. The company employing the in-house lawyer is required to be assisted or represented by an attorney in these proceedings. Penalties have been outlined for fraudulently affixing the confidentiality label on documents not covered by the new regime.

The reasoning behind this amendment is both practical and economical. There have been decades of discussions (and several international court proceedings highlighting the discrepancy) by which French companies have been at a disadvantage when dealing with foreign-based companies where in-house counsel do enjoy legal privilege. The French government acknowledges this “paradoxical situation”, in which French in-house lawyers must implement and uphold compliance obligations while avoiding the risk of self-incrimination by their companies. As the representatives put it: “The stakes are too high…  – It’s about jobs and the attractiveness of our nation. Our aim is to encourage more companies to establish their legal departments within France and to recruit French in-house lawyers.”

Marcus M. Schmitt, General Manager of ECLA, expressed strong support for the change: “This is a great development in France, and I extend my heartfelt congratulations to our colleagues at AFJE and Cercle Montesquieu there. I am delighted to see the arguments we have been advocating for such a long time have finally been adopted. This change significantly reflects the job description that in-house lawyers have in practice. We hope more countries will soon follow in France’s footsteps, bolstering legal protections for in-house counsel.”

The French Government hopes this new amendment will help French companies meet their increasing compliance obligations in fields like governance, human rights, due diligence, data protection, ethical rules, and environmental responsibility. It is also expected to increase France’s appeal to legal departments, many of whom had been choosing to establish in countries offering such protection.

ECLA views this development as natural progress towards our ultimate goal – to have a EU-wide regime for in-house counsel (either on a national or a supranational level) that adequately reflects the work that in-house counsel do. The development of the profession has been hindered by misunderstood legal rulings that have shaped the dynamics of the role and of businesses at large for too long – it is reencouraging to see that France is the latest EU Member State that has realised the importance and value that a well-regulated legal department produces.

The amendment can be viewed in French at https://ecla.martenmannis.eu.online/wp-content/uploads/2023/07/FRANCE-LPP-Amendment.pdf

ECLA is also proud to announce that, as part of its 40th Anniversary Celebration on 18-19 September in Frankfurt, Germany, it will hold an enhanced panel discussion to dissect and deliberate on the current confidentiality regimes in Europe and on the impact that these developments have in practical terms for businesses. For more information, please visit https://ecla.martenmannis.eu.online/events/anniversary/

Enhancing the protection of internal legal advice: A key step to bolster France’s and Europe’s global attractiveness and competitiveness

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Enhancing the protection of internal legal advice: A key step to bolster France’s and Europe’s global attractiveness and competitiveness

As a leading industrialised nation, France must address its current lack of protection for in-house legal advice. This deficiency has put French companies in a challenging position, making them less effective in addressing potential corruption and, furthermore, has put French companies at a disadvantage in the face of international economic competition. It has exposed them to extraterritorial standards and has brought a risk of having their strategic information exploited during litigation, in particular where the legal departments of their international counterparts enjoy broader protection.

This issue has been criticised, at home and abroad, for making French companies more vulnerable and subjecting them to a less favourable legal environment compared to their global competitors. Consequently, many businesses are considering relocating their legal departments to countries with stronger protections in place. Such relocations threaten the influence and attractiveness of French law, potentially leading to the displacement of legal decision-making centres and a loss of influence for the French legal community in Europe and beyond. Companies cannot fully integrate with the local legal system while knowing that relocation can become a potentially reasonable decision for the business. Similarly, it becomes harder to convince expanding businesses to choose countries like France as a potential option for opening new branches.

The French Ministry of Justice has realised the necessity of having a globally competitive system in this scope. It currently is developing a proposal supported by AFJE, Cercle Montesquieu, and Paris Place de Droit. The proposal aims to protect legal opinions by attaching the confidentiality to the document itself, rather than the author’s status. This would enable companies to maintain confidentiality, subject to judicial discretion during seizure, or opt to waive it as needed.

The proposed protection potentially brings numerous benefits, including:

  1. Levelling the playing field for French companies against their international competitors.
  2. Safeguarding the influence and attractiveness of the French legal community.
  3. Enhancing corporate anti-corruption efforts, ultimately improving France’s position in international rankings.
  4. Providing effective protection against extraterritorial investigations by foreign authorities, which often target large French companies.

 

ECLA has long stood for the right of protection of legal advice given by in-house lawyers – it stands as the foundation on which the Association is built and supports our core goals – to lessen the functional differences between external and internal counsel, and to bring legal clarity to Europe that would effectively increase the competitiveness of the Internal Market, especially when concerned with litigation with international counterparts. We commend AFJE Cercle Montesquieu, and Paris Place de Droit in supporting this initiative and are willing to provide any support necessary.

To download the press release, please click here.

Celebrating the European Day of Justice 2021 – No justice without independent lawyers

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The European Company Lawyers Association (ECLA) congratulates all colleagues across Europe on today’s European Day of Justice 2021 which was initiated by the Council of Europe and the European Commission as well as the European Lawyers Day 2021, initiated by the Council of Bars and Law Societies of Europe (CCBE).

In keeping with this year’s theme of “No justice without independent lawyers”, the ECLA is proud to reiterate that company lawyers are independent by design, as demonstrated in the 2012 ECLA White Paper “Company Lawyers: Independent by Design”. Today, more than 150,000 company lawyers across Europe are strongly committed to advancing the rule of law.

Indeed, justice cannot exist without a strong rule of law. A strong rule of law is the cornerstone of European society as well of a flourishing European economy. The independence of lawyers from governments, states, and authorities is an indispensable foundational element thereof.

Jonathan Marsh, President of the ECLA and International General Counsel at TotalEnergies, observes that:

“Much has changed over the last 20 years in the European legal community including, most encouragingly, the increasingly vital role of company lawyers, who embody an essential aspect of the rule of law in European companies, in particular with respect to compliance, digital and ESG developments.

The independence of company lawyers and the importance of a professional legal privilege is increasingly recognized, as evidenced by the evolution of the jurisprudence of national member states, the Court of Justice of the European Union and the recent recommendations of the OECD”.

The ECLA welcomes this opportunity to highlight the role of company lawyers in supporting the advancement of justice and the rule of law in Europe and remains committed to working with stakeholders across all disciplines to reinforce the contribution of company lawyers to a better and stronger Europe.

About ECLA
The European Company Lawyers Association (ECLA) was founded in 1983 and is the umbrella organization of 22 different national associations of in-house counsel working in companies and organizations. For more than 38 years, ECLA has been committed to the profession of company lawyers throughout Europe and accounts for approximately 68,000 professionals in its network and represents the more than 150,000 company lawyers across Europe.

 

The full press release can be downloaded here.

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ECLA salutes French plans to extend legal privilege to company lawyers

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[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column][vc_empty_space height=”20px”][vc_column_text]“If implemented, this is a real revolution in France. We salute the plans to extend legal professional privilege to in-house counsel, and we hope they will soon be implemented,” said Jonathan Marsh, the president of the European Company Lawyers Association (ECLA), in reaction to the publication of proposals made by Deputy Raphaël Gauvain of the governing LREM party.[/vc_column_text][vc_empty_space height=”20px”][vc_column_text]

The Gauvain report was submitted to Prime Minister Edouard Philippe on Wednesday. In it, he proposes to improve protection of French companies by giving company lawyers (juristes d’entreprise) a status similar to that of external legal counsel, in particular with respect to the confidentiality of legal advice they provide. Gauvain notes that currently, French companies do not enjoy the same level of legal protection than their international competitors and are often at a competitive disadvantage when faced with legal proceedings abroad.

The proposals will now have to be evaluated by the government and then presented to the National Assembly and the Senate for approval. They also include a call for the modernisation of a 1968 law on the communication of economic, commercial, business, financial or technical information to foreign persons or entities, and for the adoption of a new law aimed at protecting French companies against the transfer of company data to foreign entities by internet service providers.

This in effect would mean extending GDPR rules already in place for natural persons to legal persons and allow to impose sanctions on ISPs who transfer data of French companies to third countries’ authorities without going through the proper legal process.

Jonathan Marsh pointed out the differences that still exist between different jurisdictions in Europe when it comes to legal privilege for company lawyers. “At a time when European companies are subject to tough competition, it is not a satisfactory situation to have a patchwork of different rules in place from jurisdiction to jurisdiction. We will continue to advocate for the recognition of legal privilege for company lawyers across the EU,” the ECLA president said.

The French Association of Company Lawyers (AFJE) – ECLA’s affiliate in France –welcomed the proposal made by Gauvain, notably the recognition of legal privilege for in-house counsel. “Raphaël Gauvain’s report is a big step forward towards the protection of confidentiality of legal advice given by in-house lawyers, and the creation of the status of Company Lawyer will facilitate the implementation of this plan. It will not only strengthen French economic competitiveness but also make French and European law more attractive,” said AFJE President Marc Mossé. He called on Prime Minister Philippe to implement the proposals contained in the Gauvain Report. “You have our full support,” Mossé declared.

 

The Gauvain Report can be accessed in full here (French)

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