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ABSTRACT:
Professionals often claim confidential communications with their clients are the cornerstone of the profession’s social function. Lawyers claim confidentiality increases clients’ consultation with lawyers and promotes candour. A more recent claim is that confidentiality promotes client compliance with the law. Jurisdictions have recognized the importance of confidentiality by granting lawyers with a testimonial privilege. What lies beyond the rhetoric? Law and Economics scholars challenged the social desirability of the lawyer-client privilege. However, most of them have done so in the individual setting. This paper extends the existing analysis to corporations. It offers an explanation for the differences in the application of the corporate privilege in common law (focusing on United States) and in civil jurisdictions (focusing on German law and EU Law). The attempts to restrict the corporate privilege by the SEC and the objections of civil jurisdictions should be attributed to different problems of ownership and control rather than different civil procedures. The absence of a privilege for in-house counsel in EU competition law setting is currently under review by the European Court. We propose that the attempts to extend the privilege be rejected. |
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