Constitutional complaints against confiscation of "diesel documents" unsuccessful - no lawyer's privilege in internal investigations by law firms?
In September 2015, in connection with the Dieselgate affair, Volkswagen AG commissioned an international law firm to conduct internal investigations within the Volkswagen Group to clarify the facts. In the course of this, the firm's lawyers reviewed a large number of documents and conducted Group-wide employee surveys. Lawyers from the firm's Munich office were also involved in the mandate.
In March 2017, the Public Prosecutor's Office Munich II conducted a search of the Munich office's offices and secured numerous files and an extensive stock of electronic data with the results of the internal investigations. Volkswagen AG, the law firm in charge and three of its attorneys filed constitutional complaints against this after exhaustion of due process of law. As it turned out now, however, without success.
The just issued and consistently negative decisions of the Federal Constitutional Court show that the legal privilege does not apply to internal investigations by international law firms with headquarters outside Germany and the European Union. Although the court does not completely unjustifiably point to a certain danger for the effectiveness of criminal prosecution in this respect, this nevertheless appears as questionable interference in the relationship of trust between the client and his lawyer, which is also worthy of protection.
Internal investigations by external law firms are a rather modern phenomenon, which is also known, for example, from the German Football Association with regard to the World Cup 2006. They can be an effective means of "self-cleaning" for a company and are therefore generally to be welcomed. In light of the decisions now issued by the Federal Constitutional Court, companies wishing to commission external law firms with internal investigations will probably have to recommend that only law firms with their head office within the European Union or, even better, Germany be commissioned.
In September 2015, Volkswagen AG commissioned an international law firm with internal investigations, legal advice and representation before the US criminal prosecution authorities in connection with a criminal investigation into exhaust gas manipulation of diesel vehicles conducted in the USA. In the course of the internal investigations, the lawyers of the large law firm examined a large number of documents within the Volkswagen Group and conducted Group-wide employee surveys. Lawyers from the firm's Munich office were also involved in the mandate.
The Munich Public Prosecutor's Office II later investigated Audi AG and several employees on suspicion of fraud and criminal advertising. The subsidiary of Volkswagen AG had not issued a mandate to the law firm itself. At the request of the public prosecutor's office, the Munich District Court ordered a search of the firm's Munich offices in March 2017. During the search, numerous files and a large amount of electronic data containing the results of internal investigations were seized. Shortly thereafter, the Munich Local Court confirmed the seizure. Appeals against the decisions of the Munich Local Court before the specialised courts were unsuccessful.
Volkswagen AG, the law firm in charge and three of its lawyers each lodged constitutional complaints against this. However, this too was unsuccessful.
In the opinion of the Federal Constitutional Court, Volkswagen AG is not violated in its constitutional rights. The focus was on the right to informational self-determination. In this respect, there was an intervention, but it was justified. In particular, it was not objectionable under constitutional law that, in the view of the specialised courts, § 97 (1) No. 3 of the Code of Criminal Procedure only establishes a ban on confiscation within the framework of a relationship of trust between a person bound by professional secrecy and the accused in the specific preliminary proceedings. This was in accordance with the wording, system, history and purpose of the provision. There was no need for an extended interpretation according to which the protection against seizure existed independently of a relationship between professional secrets holder and accused. This would lead to extensive protection against confiscation and searches of professional secrets and would considerably reduce the constitutionally required effectiveness of criminal prosecution. If there was also a high potential for abuse, the confiscation protection should extend to all client relationships irrespective of any accusation of the client. Evidence could be deliberately transferred to the lawyer's sphere or issued only selectively. Finally, it was not objectionable that the specialised courts denied such an accusation of Volkswagen AG and thus also the applicability of § 97 Para. 1 of the German Code of Criminal Procedure. Such a position need not be adopted even if a company merely fears a future investigation against itself and seeks legal advice or commissions an internal company investigation against this background. This applies all the more as it seems almost impossible to reliably determine the limits of confiscation protection without objective criteria. The fact that the investigation was directed against Audi AG and thus against a subsidiary was irrelevant.
In the opinion of the Federal Constitutional Court, the commissioned law firm is not even a bearer of fundamental rights and is therefore not entitled to appeal. It is not a domestic legal person within the meaning of Article 19.3 of the Basic Law. Rather, the firm is organised in the legal form of a partnership under US law and there is no indication that its head office - and that is the only thing that matters - is nevertheless located in Germany or at least in the European Union.
The Federal Constitutional Court could not recognize any right of appeal of the (Munich) attorneys at law firm either. These were not violated in their own constitutional rights. In particular, the holder of the fundamental right under Article 13 of the Basic Law in connection with business premises is the firm itself, but not its lawyers. There would also be no violation of the fundamental right under Article 12 of the Basic Law, because the relevant criminal procedural intervention standards of the StPO and the measures based on them would not have any tendency to regulate the profession, since they concerned all accused persons under criminal law indiscriminately or addressed themselves indiscriminately to everyone. Nor was the right to informational self-determination affected, since the search was not aimed at obtaining the lawyers' personal data, but rather at information which the law firm had gathered or compiled on the basis of the client relationship with Volkswagen AG. The fact that this information was collected or produced in the course of the lawyers' professional activities does not alter the client-related nature of the data, so that the data stock of the law firm, Volkswagen AG as the client of the internal investigations and, to a certain extent, Audi AG is to be allocated.
It should be noted that the Federal Constitutional Court limits the ban on confiscation under § 97 (1) of the Code of Criminal Procedure (StPO) to the classic ratio of professional secrets bearer to accused. The activity of the lawyer as an "internal investigator" is thus protected - at least not automatically - from access by the prosecution authorities. In this respect, the court acknowledges that the possible use of the internal data for further investigations could jeopardise the economic activities of Volkswagen AG. From his point of view, however, the dangers for effective criminal prosecution and abuse are more decisive if evidence, detached from an accused position, would always be withdrawn from access by the prosecution authorities as soon as it is transferred to a lawyer.
It should also be noted that the Federal Constitutional Court does not consider fundamental rights to have been affected either by the commissioned law firm or by its lawyers from the outset. The respective reasons can certainly be heard. However, the court does not go into the paradox that it partly denies the Munich attorneys of the law firm a fundamental right carrier on the grounds that it is rather with the law firm, although it denies this very law firm the very ability to be carrier of fundamental rights because of its foreign affiliation.
In the light of the decisions of the Federal Constitutional Court, companies wishing to commission external law firms with internal investigations will probably have to recommend that only law firms with their head office within the European Union or, even better, Germany be commissioned. Such law firms could have relied on their own fundamental rights in the present constellation, which would have allowed their constitutional complaints against the search and seizure - possibly - to succeed. In the case of law firms with their head office outside the European Union, in any case, public prosecutors' offices, which are regularly staffed by competent lawyers and which are well aware of the legal position of the decisions taken, will hardly be more reluctant in the future to search business premises. Moreover, depending on the outcome of the Brexit proceedings, law firms with their head office in Great Britain may in future actually and legally be outside the European Union.
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