Newsletter

By Philippe Legrez, former Michelin General Counsel

Welcome to “French legal privilege”

For many years now, in-house lawyers have been calling for the introduction of “legal privilege” in France, i.e. the possibility for their opinions or consultations to be confidential and therefore not to be disclosed in investigations or administrative or legal proceedings. This situation has recently changed with the adoption of two amendments made in 2023 by the National Assembly and the Senate to the draft orientation and programming law for the justice system for the years 2023/2027. These two amendments establish the principle of the confidentiality of opinions or consultations by in-house lawyers.

As Michelin’s General Counsel, I saw the main disadvantages of the lack of confidentiality of in-house lawyers’ opinions or consultations as follows:

A company lawyer could not alert his colleagues in writing to a possible breach of the law committed by them, unless he left a self-incriminating written record for the company which could be referred to by the authorities or the courts. This difficulty in reporting possible breaches of the law hindered the spread of a culture of compliance.

The French company could not refuse to communicate the opinions or consultations of its in-house lawyers to the American courts (or others), which sometimes made it easier for French international companies to be ordered to pay very high sums.

The French company could use its lawyers to draft certain opinions or consultations in order to benefit from the lawyer-client privilege, and to prevent the said opinions or consultations from being communicated in the context of investigations or judicial or administrative proceedings. However, the use of lawyers entailed additional costs for the company, which it could have avoided if its in-house lawyers had been granted legal privilege.

More rarely, but regrettably, large groups have chosen to relocate their in-house lawyers outside France so that they can benefit from the legal privilege recognised in their host country, or even to employ in-house lawyers in France who benefit from the professional secrecy of lawyers abroad (insofar as they were or remain members of a foreign bar guaranteeing them professional secrecy).

Foreign lawyers within an international company could refuse to exchange and work together on certain documents with their French counterparts because of the absence of “legal privilege” for French in-house lawyers.

The amendments referred to above recognise legal privilege for in-house lawyers under certain conditions:

• in-house lawyers benefiting from legal privilege must hold a master’s degree in law or an equivalent French or foreign qualification
• they must have undergone training in professional ethics
• to be covered by legal privilege, the writings of in-house lawyers must be marked “confidential – legal advice in-house lawyer”.
• they will not benefit from legal privilege in tax or criminal matters.
• legal privilege may be challenged before certain courts, in which case the company must be represented by a lawyer.

A joint committee of the National Assembly and the Senate is due to meet in autumn 2023 to overcome the few remaining differences between the two assemblies and adopt a final text, with the principle of recognising the confidentiality of opinions or consultations by in-house lawyers already accepted by both.

In their joint press release of 11 July 2023, the Association des juristes d’entreprise, the Cercle Montesquieu (which brings together legal directors) and the Association nationale des juristes de banque welcomed the legislative development in question in the following terms: “After the joint committee and the final vote on the text, French companies will be better protected in the context of global economic competition as soon as the law comes into force, and compliance programmes will be able to be put in place in the general interest without the risk of self-incrimination on the part of the company. This will substantially enhance the attractiveness of the French legal system“.

We will be sure to report again on the subject of legal privilege once the final text of the law has been adopted.