JONES DAY TALKS®: International Litigation: Confidentiality and Legal Privilege under French Law
Confidentiality and attorney-client privilege are cardinal principles for lawyers. In this regard, international litigation, which may be subject to different and sometimes conflicting confidentiality rules, presents many challenges to the legal teams involved in such a process.
Ozan Akyurek and Cyril Philibert, partners in Jones Day's Global Disputes Practice in the Paris Office, analyze the conditions and modalities of application of confidentiality and legal privilege under French law, and illustrate their practical implementation in consideration of concrete examples, particularly regarding the procedure provided for in Article 145 of the Civil Code of Procedure
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Read the full transcript below:
Dave Dalton:
What exactly do confidentiality and lawyer-client privileges cover? If these questions are often addressed exclusively on a theoretical level, it is more difficult on a day-to-day basis to really grasp their practical application, especially in a context in which business activities generate a continuous flow of information shared. Many questions arise at the stage of an international pre-litigation or litigation, which confronts a whole set of complex rules of confidentiality, which are different, and sometimes contradictory.
Ozan Akyurek and Cyril Philibert, both partners in the global disputes practice of the Paris office of Jones Day, will clarify for us the notion of confidentiality and legal privilege in French law, its conditions and modalities of application, and finally, their practical application in the context of the implementation and execution of an investigative measure requested on the basis of Article 145 of the Code of Civil Procedure. I'm Dave Dalton, you're listening to JONES DAY TALKS®.
Ozan Akyurek specializes in commercial litigation and business law and acts on all issues of product liability, industrial risks, corporate law and insurance law. He acts on a wide range of sectors, such as aeronautics, automotive, IT, packaging, transport, logistics and steel. He also teaches international trade law and American civil procedure at the University of Paris. Cyril Philibert's practice focuses on litigation relating to mergers and acquisitions, product liability, industrial risks, and complex commercial contracts.
Ozan, Cyril, thanks so much for being here. To begin with, what are the specifics of the rules of confidentiality that apply to the French lawyer, Ozan?
Ozan Akyurek:
Well, in France and in particular under French law, the main principle is that all communications between outside counsels are confidential. The rule of confidentiality is binding upon the lawyer who can enforce it against any third party. French lawyers are subject to the provisions of the bar regulations, in particular Article 3.1, which lays down the rule of confidentiality of their communications. In other words, the rule applies to all exchanges among French outside counsels, whether oral or in writing. I can give you a couple of examples here of confidential communication. It can range from meetings held between two French external counsels, to phone conversation, and of course, emails attachments are also considered confidential as the French Supreme Court has repeatedly pointed out. On the other hand, the confidentiality can be lifted. It can be lifted when these exchanges are expressly qualified and labeled as 'official,' bearing in mind here that the term 'official' must be used sparingly here and it is only the communications that are labeled 'official' that are considered as being not confidential. We typically refer here to communications which are of purely procedural nature, such as emails where, typically, one lawyer would request to his colleague a document that he has submitted in court proceedings, emails where lawyers would send to their colleague a copy of the brief that they have just filed. Those emails would be considered as being not confidential.
But again, I should mention that without that specific word, i.e. 'official,' it's not possible to rely on these communications before a judge, or to refer to them with persons other than the sender of that email or the recipient of that communication. These are very protective rules when it comes to dealing with communications between two French counsels. The situation is a bit different between outside counsels in the EU, in the European union, because here the rule is the opposite. Communications are not confidential as a matter of principle unless they are marked confidential or without prejudice. It's important when dealing with a counsel who is outside France, who is for instance in Germany, to make sure that we label our communication as confidential or without prejudice in order to protect that specific communication. Regarding the situation where we would have, for instance, one French lawyer would have to deal with a lawyer from outside the EU. Let's take the example of external counsel who is based in the US, for instance. Here, the situation is a bit tricky because case law has not specified the conflict of law rule that would be applicable here. It's very difficult to know which rule of law would apply and which rule of confidentiality would prevail over the other.
But again, we should keep in mind that under our bar regulations, a French outside counsel has the duty to make sure that the communication is effectively protected when he has exchanges with an outside counsel from outside the EU, and if needed, he has to sign an agreement in order to regulate the confidentiality of the exchanges between him and his colleague who is based on the other side of the Atlantic. It could also be like a joint defense agreement where we would typically make sure that the communications are confidential. But again, notwithstanding the absence of specific provisions here ensuring the confidentiality of the exchanges between a French outside counsel and a US outside counsel, the French Supreme Court has several times admitted that communications would remain protected by confidentiality.
Dave Dalton:
Ozan, great summary, but let's talk to Cyril for a second. Cyril, is it possible to apply these rules that Ozan mentioned to in-house counsel?
Cyril Philibert:
I'm afraid no, because in the French law, in-house counsel are not registered with the bar, and they do not benefit from any legal professional privilege. To make it worse, French case law treats foreign in-house counsel in the same manner, regardless of whether they're protected by legal professional privilege in their own jurisdiction. Communication with and between foreign in-house counsel would not be protected by privilege in France, could be seized and produced in court. That's the general principle. We've got one very recent exception, the French case law, in fact, recently ruled that courts may extend the scope of legal privilege to communication from an in-house counsel only if they are producing the defense strategy built by the outside counsel. It looks like a bit protection which is afforded in the US to activities taken by non-lawyers when they are undertaking at request of counsel.
This is what the Paris Court of Appeal has decided on November 8th, 2017, in a case where the company was preparing its defense in the context of investigations led by the French Competition Authority, and the company's in-house counsel just reproduced internal emails, the defense strategy built by the company outside counsel. The court, Paris Court of Appeal, ruled that those emails were privileged and had to be withheld from third parties. That's a very interesting and important decision that was upheld by a decision of a French Supreme Court on January 26th, 2022. The Supreme Court added to that, pointing out that such correspondence to be protected, that it essential purpose was to reproduce the defense strategy built by the outside counsel. Whether the French Supreme Court has intended here to set a new principle is, however, a little bit uncertain because we've noticed that this judgment had not been published by the Supreme Court, and we will have, therefore, to monitor quite closely if any new decision on this issue is rendered in the coming years, and whether the Supreme Court intends to maintain its position. That being said, it's worth mentioning that as practitioners, we have noticed some lower courts have already complied with this French Supreme Court ruling, and therefore extended the confidentiality privilege to correspondence from in-house counsel.
Dave Dalton:
Okay. Maybe you covered this already, but I was going to ask, Cyril, what advice should an in-house counsel follow when taking over his outside counsel legal opinion? How does this affect that?
Cyril Philibert:
Well, yes, our recommendation, in fact, is to mark all communications were producing the defense strategy built by the outside counsel as privileged and confidential. You can add legal advice provided by the outside counsel. Unfortunately, labeling communication in this way will not be entirely conclusive, but it's clearly helpful, as in case of investigations, those communication will be easily identified as such, and it's a key condition if privilege is later to be established.
Dave Dalton:
Then what about the obligations? Again, if I'm asking you to repeat, I apologize, but I think we're getting around this. What about the obligations of confidentiality, and more broadly, the legal privilege of the outside counsel vis-a-vis his client? Is this the same ballpark?
Cyril Philibert:
Well, in many countries, such as in the US, you've got something which is similar to a French law, which is that outside counsel are bound by a duty of professional secrecy toward their clients, and the outside counsel privilege obligation to ease, or our clients, is absolute of public order and enforceable against any third party. The scope of this privilege is particularly broad and it includes any element containing any information which is related to a client's. It applies, for instance, to letters, phone conversations, text messages, emails, and it also applies to any information received from third parties, sorry, in connection with client's case, as well as anything that the outside counsel may have observed, discovered or deduced in the course of his or her professional activity. It also applies to any situations or acts which is related to the activity and duty of the outside counsel. For instance, legal opinion sent to, or intended to be sent to the clients, correspondence exchange between the clients and the outside counsel, interview notes, names of the client and the outside counsel agenda. All of that is within the scope of this privilege. Let's be very clear, such privilege only applies to communications which are part of an outside counsel-client relationship, and therefore, it will not apply, for instance, where an outside counsel is just one of a recipients of just copied in exchange between two correspondence. That's something very important to keep in mind.
Dave Dalton:
Let's talk about evidence-gathering procedures and switch back to Ozan for a second. In the context of these evidence-gathering procedures, questions arise in terms of access to documents stored on servers located abroad, and therefore, possibly outside the protective framework of the confidentially of exchanges between the lawyers and legal privilege. Ozan, do these risks really exist and how significant are they?
Ozan Akyurek:
Well, this really applies in particular when it comes to what we call investigative measures, which are ordered upon the request of one of the parties, and which is grounded on Article 145 of our Code of Civil Procedure. For the records, this procedure allows any claimant who has a legitimate reason to preserve or establish the existence of certain facts that may affect the outcome of a future dispute to obtain an order which would be granted by the judge, and the aim here is to have an investigative measures that we will be taking against the third party. This is most often a measure carried out by a French bailiff who would typically collect documents that may be relevant to a future dispute. But in practice, this type of measure should not be seen as similar to general investigative measures with the sole aim of pressurizing the opposing party. If that is the case, then that type of measure will not be granted. This is why, when requesting this type of measures, we should make sure that they are limited in time and purpose. This can be done through, for instance, keywords and additional filters relevant to the case. It is clear that these measures can quickly come up against the rules of confidentiality or legal privilege of the lawyer, or even what we call the business confidentiality. With regard to confidentiality and attorney-client privilege, given our local bar regulations on attorney-client communications, such measures should not be carried out at the lawyer's premises, nor should they be aimed at communications or legal opinions exchanged between a French lawyer and his client. Similarly, it's not possible to try to attach those documents at the client's premises. If that happens, then we could always request the exclusion of those documents from the court proceedings, so those documents can be returned to the client.
To sum up, any correspondence between a French outside counsel and his client cannot be attached by a bailiff. This will certainly be the same for a correspondence that a French lawyer would send, for instance, to a colleague based abroad, whether in the European Union or in the US, and as far as correspondence exchanged between French outside counsels and in-house counsel, as long as those documents do not simply copy the defense strategy set by the lawyer, that is fine, but if those correspondence are basically a copy-paste of a defense strategy set by the lawyer to his client, then, in that case, it would be possible to exclude this correspondence from the attachment proceedings that might be brought by one of the party.
Dave Dalton:
Ozan, lots of great information there. Cyril, is there anything you'd add to what Ozan just brought about?
Cyril Philibert:
Yeah, I just wanted to add something about what Ozan mentioned about business confidentiality, because you've got documents which are seized and which, obviously, can infringe business secrecy. It's just important to keep in mind that to protect such business secrecy, the judge will often order that those documents collected during investigations be placed into escrow, and then the judge will examine whether those documents have to, in fact, be disclosed to a third party, or only be partially disclosed in order to protect business secrecy. We've got, also, this set of rules in order to protect that.
Dave Dalton:
Very good. This has been great so far, a lot of wonderful information. Let's close with this, Ozan, what happens when the documents to be collected through an investigative measure are stored on servers outside of France? What's the circumstance there?
Ozan Akyurek:
Yeah, good question, Dave. As you may know, many investigations are essentially aimed at accessing the hard drives of their targets, whether it can be a competitor of a company. The aim here is to allow the bailiff to conduct a password search. Of course, here, the bailiff will often act on the basis of an order that would have been issued by a judge, which would allow him to obtain all the password to access the hard disks and email boxes. The question of having access remotely to servers that are outside France seems to be possible without being able to oppose the fact that this servers are located abroad. In practice, what we could possibly recommend our clients to do is simply to be careful about their legal environment governing the practices of their service providers who are storing their data, often abroad, because depending on the jurisdiction, those service providers may be subject to all type of obligations, and even obligations to respond to third party request, and sometimes to provide certain information which can be a total breach of the rules of confidentiality and legal privilege that would apply under French soil.
Dave Dalton:
Very good. Ozan, Cyril, thanks so much. I want to remind our listeners, this same program is available as a French language, JONES DAY TALKS® podcast. You'll find a link to that here. Great information in both formats, listen to whatever you prefer. But Ozan, Cyril, thank you so much for being here today. Great information. I hope we talk again soon.
Ozan Akyurek:
Thank you, Dave.
Cyril Philibert:
Thank you.
Dave Dalton:
Thank you both. For complete biographies and contact information for Ozan and Cyril, visit jonesday.com. While you're there, visit our insights page where you'll find more podcasts, publications, videos, blogs, and other timely info. Subscribe to JONES DAY TALKS® on Apple Podcasts, Spotify, and wherever else podcasts are found. JONES DAY TALKS® is produced by Tom Kondilas. Thanks as always for listening. I'm Dave Dalton. We'll talk to you next time.
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