Liberty under threat?

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• Litigation and dispute management

25-05-2017

Attorney-client privilege in Germany

During the course of the diesel emissions scandal and the related investigations into the Volkswagen Group, the German offices of a US law firm which had been instructed to carry out an internal investigation for Volkswagen and Audi were raided and documents were seized. This incident has generated significant industry reaction and has left some with the impression that in Germany the doctrine of attorney-client privilege is weak.

A form of attorney-client privilege exists in Germany. However, as the Volkswagen Group case clearly illustrates, privilege is viewed very differently in Germany as compared with the US. Under the American system, the relationship between lawyer and client is held to be almost inviolable. In contrast, the German Code of Criminal Procedure (“the Code”) provides that the public prosecutor’s office may, when authorized by a judge, carry out a raid and seize documents in a lawyer’s possession. The key to the judge’s decision is the question of whether there is an attorney-client relationship. Under the Code, this is the compulsory prerequisite for any kind of privilege.

In the Volkswagen Group case, the US law firm had been chosen to be an independent investigator. The public prosecutor’s office in Munich is therefore convinced that there is no attorney-client relationship as required under the Code. Both the regional court and the district court agreed with the prosecutor and held that the required client relationship does not exist in the case of an internal investigation. Further complications are caused by the fact that the courts in Germany which have to decide on this question have not issued consistent rulings. As a result, there is no fixed point of reference in relation to the scope of attorney-client privilege in internal investigations under German law.

To prevent the exploitation of the confiscated documents in the present case, Volkswagen and their lawyers filed a complaint at the local court as well as the district court. After two negative decisions, the parties have turned to the German Federal Constitutional Court and filed an application for interim relief. This represents their final chance to prevent the public prosecutor in Munich from being able to review the seized documents. According to a company representative, Volkswagen’s position is that the raid on the law firm’s office was contrary to essential principles of the Code. The Federal Constitutional Court will now have to decide on this question.

Until the Court hands down its decision, we continue to recommend that you contact your lawyer at Eversheds Sutherland before commencing any kind of internal investigation involving German companies. Colleagues in Eversheds Sutherland’s German offices will be pleased to assist you in finding a satisfactory solution.