No privilege for investigation documents produced by external legal advisors

The Swiss Federal Supreme Court has ruled that reports and interview notes produced by external legal advisers during internal inquiries into anti-money laundering violations are not protected by attorney-client privilege.

The case concerned an investigation by the Office of the Attorney General of Switzerland (OAG) into a former bank employee suspected of money laundering and document forgery while working as a client advisor at a bank.

The OAG ordered the bank to produce all minutes of management and board meetings at which the allegedly corrupt banking relationships had been discussed, as well as all documents arising out of the bank's own internal investigation. The internal investigation had been conducted with the help of external legal counsel. On appeal, the bank argued that the draft report of the investigation and underlying interview notes produced by external counsel were covered by legal privilege and thus protected from disclosure.

The Swiss Federal Supreme Court ruled that neither the draft investigative report nor the interview notes were covered by legal privilege, and notes of employee interviews could not be withheld on self-incrimination grounds unless the interviews had been conducted under threat of criminal penalties.

Under Swiss law, legal professional privilege does not apply to in-house counsel. This decision is striking because the court refused to apply privilege to documents produced by external counsel during a bank's internal investigation.

Reassuringly however, the court confirmed that legal advice provided during a bank's anti-money laundering inquiry would be privileged. Therefore the legal advice in the draft investigative report could be, and was, redacted. In addition, the court confirmed that investigation documents produced in anticipation of defending criminal proceedings would be covered by privilege.

Source: Global Investigations Review

Judgment: http://www.polyreg.ch/bgeunpub/Jahr_2016/Entscheide_1B_2016/1B.85__2016.html

Further information

This article is part of the European Finance Litigation Review,  a quarterly publication on recent developments in the finance litigation and regulatory sector in key European jurisdictions.  For more information please contact Amy Edwards amy.edwards@allenovery.com.