Legal privilege in the context of internal investigations

Paola De Pascalis
Pavia e Ansaldo, Italy
paola.depascalis@pavia-ansaldo.it

In the organisation and conduct of an internal investigation in a company, the profile relating to the confidentiality, preservation and protection of its contents and findings, with respect to the interference of the judicial authority or third parties, is of particular importance, where criminal proceedings already exist, as well in the event that they can be instituted.

The theme of ‘defensive secrecy’ is easily identifiable, with reference to the natural person involved in a judicial affair; an extra interpretative effort is required – especially in reference to the civil law systems – to see it applied to the corporate context.

It is necessary to verify – also with reference to the internal investigation and under the procedure framework for legal entities – how the protection of the sphere of confidentiality in the relationship between client and lawyer is guaranteed.

It is a question of fixing a limit to the power of the judicial or third party to seek evidence. It is also a question of applying the principle of non-discrimination to this particular context, not only as expression of the right of individual defence but also applied to companies and entities.

Moreover, where the company may be subject to criminal proceedings, the inviolable guarantees relating to the right of defence and the principle of due process cannot be disregarded.

The supranational normative sources from which the recognition of rights and guarantees connected to the criminal defence are numerous: articles 14 paragraph 3 lit (b) and 17 paragraph 1 of the International Covenant on Civil and Political Rights of 1966; articles 6 and 8 of the European Convention on Human Rights; articles 7, 47 and 48 of the Charter of Fundamental Rights of the European Union. On this basis, the jurisprudence of the supranational courts was then developed. The Code of Ethics of European Lawyers and the Charter of Fundamental Principles of the European Lawyer of 2006 are also worth mentioning.

Despite this common supranational framework, the theme has been declined in a very different way in different countries, also for the different cultural roots. The wide effectiveness of the attorney client privilege provided for in United States law, and the legal advice privilege contemplated by the United Kingdom's system, are not reflected in the civil law countries: also because of a different development of the practice of internal investigation, as well as systems of self-reporting or collaborative mechanism with the supervisory and judicial authorities.

To frame the ‘defensive secret’ in the different countries and in the various sectors of each legal system – both at the normative and interpretative level – is extremely important, whereas, more and more often, internal investigations take on a cross-border dimension or, in any case, must be conducted in different geographical contexts and involve different disciplines and not only criminal law.

In the Italian legal system, several articles of the Constitutional Charter give foundation to the guarantee and protection of defence secrecy (articles 2, 13, 14, 15, 24 co 2 and 111 Cost.); likewise, several principles are recognised in the Deontological Codes. It is more complex to reconstruct the precise implementation of these principles in the positive law.

In the meantime, in the Italian legal system, there is no express or specific regulation governing the conduct of the internal investigation within the companies and the criminal proceedings against them, let alone with reference to the profile of legal privilege.

On the one hand, it is possible to refer to the legislation governing the defensive investigations of the accused (pursuant to Article 391 and following of the Code of Criminal Procedure) that states whether, when and how, the lawyer can proceed, including through collaborators, substitutes, technical advisors and authorised private investigators, to carry out some investigative acts already planned for the judicial authority.

On the other hand, on the subject of the protection of the contents and the results of the latter, must be considered the provisions of law that define the statute of rights, guarantees and duties of the defender in relations with his client.

To the legal entity and in the context of the criminal procedure against it, the typical guarantees of the accused natural person have to be applied, based on their compatibility to articles 34 and 35 D. Lgs. 231/01.

Therefore, a few and specific fundamental norms must be considered. Some of these regulate secrecy as a fundamental aspect of the legal profession and the fiduciary relationship between lawyer and client.

According to Article 200 of the Code of Criminal Procedure, lawyers, authorised private investigators, technical advisers and notaries cannot be obliged to give evidence on what they have known by reason of their ministry, office or profession.

According to the same logic, pursuant to Article 256 of the Code of Criminal Procedure, the lawyer must immediately hand over to the judicial authority, on request, the documents as well as the data, information and computer programs and everything else that relates to them for reasons of their assignment or profession, unless they oppose in writing the secrecy inherent in their office or profession.

This right to secrecy linked to the nature of the profession exercised – which is also a penally sanctioned duty – therefore consists in maintaining confidentiality over the activities that the lawyer conducts and the information they learn in the context of assisting a client.

However, it is neither absolute nor unconditional and does not automatically and objectively follow from the confidential nature of the information.

A first assessment left to the lawyer about the need to oppose secrecy is followed by the judge’s assessment of the merits of this: if they have reason to doubt that the reasons given for not giving evidence are not well founded, the judge shall make the necessary findings and, in the event, order that the same legal person testify. Likewise, if the judicial authority has reason to doubt the validity of the secrecy and considers that it cannot proceed without obtaining the documents or property requested, it shall make the necessary investigations: if the statement is unfounded, it shall order the seizure.

This protection, which is rather general precisely because it is linked to the professional role, cannot really be considered as full and solid.

There remains at least the provision that the results of interceptions of communications by persons holding professional secrecy may not be used, if they concern facts known by reason of the profession, unless the persons have given evidence in court or otherwise disclosed.

Unlike what happens in the Anglo-Saxon legal systems, this discipline, precisely because it is linked to certain professional qualities, is not applicable to the internal legal company. In the Italian legal system, if the person is not registered in the Professional Register, as it does not have - because of the stable and exclusive employment relationship with the Company - the characteristics of autonomy, independence and disinterest in the exercise of its activity, which are the very essence of the free profession of lawyer.

Therefore, in terms of legal privilege, there is no protection of the information and content managed by the in-house counsel in the context of internal investigations; different, of course, is the case where the company lawyer is the privileged interlocutor of the appointed external lawyer and because of this confidential report learns information and contents.

In this perspective, in order to give maximum effectiveness to the guarantees of protection of the ‘secret’ provided by the legal system, it is necessary that the internal resources of the company (internal audit, compliance officer, legal counsel) leave the management and conduct of investigations and verification activities to appointed external lawyers and their working teams. Internal control bodies should also proceed in the same way with regard to their audits.

In fact, Article 103 of the Code of Criminal Procedure, regulates precisely the guarantees of freedom of the defender, in all their fullness, in the perspective of the effectiveness of the right of defence and not of the professional figure and dignity.

Precisely to reinforce this defensive perspective, the guarantees are also provided for technical consultants and private investigators authorised by the lawyer and their auxiliaries. Given the vagueness of Article 103’s text, the rule is considered to be applicable also to the defender of the  victim and other private parties.

For a long time, there was uncertainty as to whether these guarantees applied exclusively to the appointed lawyer in the specific proceedings in which the seizure or search was ordered. The current approach is, however, that they are guarantees applicable to the lawyer in any proceedings, precisely with a view to a wide protection of the right of defence. In any case, it is always preferable to give a formal assignment and, above all, in compliance with the provisions of Italian law for the conduct of preventive defensive investigations. This is especially the case, not only for the private investigator, but also for the technical adviser, who must hold this specific qualification under the Code of Criminal Procedure.

According to Article 103 of the Code of Criminal Procedure, inspections and searches in the offices of the lawyers are permitted only: (1) when they or other persons who carry out a permanent activity in the same office are charged, for the sole purpose of establishing the offence attributed to them; and (2) to detect traces or other material effects of the crime or to search for specifically predetermined things or persons. This guarantee refers specifically to the offices of the defenders and, therefore, concerns only a very precise spatial context.

In addition, lawyers and private investigators authorised and appointed in connection with the proceedings, as well as technical advisers, may not seize documents or documents relating to the subject matter of the defence, unless they constitute a body of crime. In this case, however, considering the provisions of the rule, the rule follows the person and not the place: it is therefore not possible to carry out seizure in any place, other than the office where the lawyer or the investigator carries out, at a given time, defensive activity. It must also be specified that the guarantees cannot concern documents in the exclusive possession of the customer and without a current destination for the defensive activity.

In any case, then, inspections, searches and seizures,  where allowed, must be carried out in a significantly more complex way than ordinary procedure.

The interception of conversations or communications by defendants, private investigators authorised and appointed in relation to the proceedings, technical advisers and their auxiliaries, or between them and persons assisted by them shall not be permitted. This guarantee, of course, only applies to content that is inherent in the defensive activity and the exercise of the rights of defence.

Moreover, seizure and any form of control of correspondence between the accused and his or her lawyer are prohibited, unless the judicial authority has reasonable grounds to believe that this is a crime.

This guarantee is strongly limited in some aspects. On the one hand, the text of the rule provides that it is applicable only to correspondence with the defender and with no other figure in support of defensive activities; on the other hand, the concept of correspondence referred to is very outdated and does not take into due consideration the most current forms of correspondence, supported by growing technology. This approach is not opposed by case law: so, in many situations the guarantees of Article 103 are circumvented.

The breach of these rules of guarantee means that the findings of the investigative measures are not open to legal proceedings.

In conclusion, it is clear that, in the Italian legal system, the greater protection of the information and contents learned within an internal investigation is offered by the guarantees provided by Article 103 of the Code of Criminal Procedure and by the ‘defensive secrecy’ of which they are an expression. The assignment to an external lawyer is then the most appropriate solution; equally appropriate is to bring back to the exercise of defensive activity all the various consulting figures useful to an internal investigation, by qualifying them as technical advisers to the lawyer under the Criminal Procedure Code.