CROSS-BORDER INTERNAL COMPLIANCE INVESTIGATIONS IN GERMANY AND LEGAL PRIVILEGE: BALANCING THE NEEDS
Internal investigations have become firmly established in continental Europe, or at the very least in Germany. They are increasingly viewed as an important element of a company’s best possible defence. However, even within just one jurisdiction there are conflicting goals to consider. Legal requirements have to be balanced in many different ways. Experience shows that this is possible, as long as certain basic cornerstones are respected and, on a more detailed level, the developing best practice for internal investigations is adhered to. This challenge becomes much more complex in the case of cross-border investigations. The fundamental legal framework for internal investigations differs vastly between jurisdictions. Even so, with the help of foresight it is usually possible to balance the different requirements so that companies do not reach the point where there is a genuine conflict between the requirements of different jurisdictions and a decision needs to be taken.
Legal privilege and internal investigations in Germany
Internal investigations, along with the accompanying disclosure of the results of an investigation to regulatory or criminal enforcement authorities, have been firmly established in the US since the 1970s and are now part and parcel of the local legal culture. This has only recently been the case in Germany. For some time, internal fact-finding in cases of potential misconduct was a task for the internal audit department. Voluntary disclosure of potentially significant matters under criminal law and active support for public investigations were a rare exception. In the aftermath of corruption scandals among some of Germany’s largest corporates, the practice saw its first systematic developments.
Jul-Sep 2018 Issue