In a ruling dated January 10, 2023, the French Cour de cassation quashed an order of the Paris Court of Appeals that had annulled the seizure of attorney-client communications during a consumer law dawn raid on the grounds that they were covered by “legal privilege,” thereby excluding the application of the concept under French law.[1] Although the case relates to alleged breaches of consumer law, its reasoning can be transposed to matters relating to competition law dawn raids.
Background
The case stemmed from a series of consumer complaints filed with the French Directorate General for Competition Policy, Consumer Affairs and Fraud Control (“DGCCRF”) against SFK Group (“SFK”, now Indexia Group), a company active in the insurance brokerage sector, between September 2019 and May 2020. Specifically, consumers alleged that whenever they tried to terminate their insurance contracts, SFK would lead them to believe that such termination was effective, even though withdrawals continued to be made from their bank accounts.
Following these complaints, the DGCCRF opened a formal investigation into the existence of unfair trading practices infringing the French Consumer Code on September 8, 2020, and, on September 24 and 25, carried out dawn raids on the premises of SFK Group and its subsidiaries.
In an appeal before the Paris Court of Appeals, SFK challenged both the validity of the search warrant delivered to the administration and the legality of the conduct of the dawn raids. Although the Court dismissed the search warrant appeal,[2] it held, with regard to the conduct of the dawn raid, that a number of documents had been illegally seized and that their seizure should consequently be annulled.[3] However, the Court did not annul the dawn raids in their entirety. Both SFK and the DGCCRF appealed the ruling on the conduct of the dawn raids before the French Cour de cassation.
The French Cour de cassation’s ruling
SFK’s appeal relied mainly on the following two pleas in law. First, SFK argued that the Court of Appeals had wrongfully refused to assess its claim that the minutes of the dawn raid were unlawful. Second, SFK argued that the dawn raids as a whole were invalid because the seizures made by the DGCCRF agents were “massive and undifferentiated.”
The French Cour de cassation dismissed both pleas. On the first plea, the Court noted in particular that SFK had not indicated any specific harm suffered as a result of the formal irregularities affecting the minutes of the dawn raids. On the second plea, it noted that only 15 of SFK’s 2,400 employees had been targeted, which was sufficient to show that the seizures were not “massive and undifferentiated.” Furthermore, the Court noted that the administration was under no obligation to inform SFK of its dawn raid modus operandi or of the search terms used to identify relevantdocuments.
The DGCCRF, on the other hand, claimed that the Court of Appeals had wrongfully annulled the seizure of certain documents on the grounds that they constituted attorney-client communications. This claim was based on two pleas in law. First, the DGCCRF noted that it had never been provided with a copy of the documents in question. Second, it claimed that consumer law does not prevent the seizure of attorney-client communications if such communications do not concern the exercise of the rights of defense.
As regards the first plea, the French Cour de cassation noted that the DGCCRF had only received an inventory and a summary table of the documents that allegedly constituted attorney-client communications. This had prevented any genuine debate on the privileged nature of the documents before the Court of Appeals, in breach of the right to adversarial proceedings.[4]
This alone would have been sufficient to justify a quashing of the Court of Appeals’ order, but the French Cour de cassation also ruled on the DGCCRF’s second plea in law, thereby providing further explanations on the principles applicable to the protection of attorney-client communications during dawn raids.
In its ruling, the Court of Appeals had held that the seizure of attorney-client communications should be canceled because such documents were covered by “legal privilege”.[5] However, the French Cour de cassation noted that (i) under French law, attorney-client communications are protected from seizure only if they relate to the exercise of the rights of defense, (ii) the notion of “legal privilege” does not exist as such in French law and (iii) in other countries where the concept exists, exchanges may be covered by “legal privilege” despite having no relation with the exercise of the rights of defense. Accordingly, given that it had not established that the attorney-client communications at stake related to the exercise of its rights of defense, the French Cour de cassation quashed the Court of Appeals’ ruling and remanded the case to the Paris Court of Appeals.
Takeaways
While the outcome of the case (namely, that only attorney-client communications relating to the exercise of the rights of defense are protected from seizure) is consistent with the Criminal Division of the French Cour de cassation’s previous case law,[6] it is nevertheless worth noting that the Commercial Division of the court, which has jurisdiction to rule on the legality of dawn raids in tax matters, has regularly ruled that attorney- client communications are protected from seizure, whether they relate to the dawn raided company’s rights of defense or whether they merely convey advice not related to specific proceedings.[7]
Such a contrast between the Cour de cassation’s Criminal and Commercial divisions in fact reflects a more fundamental tension within French legislation itself. Indeed, since 1971, French law clearly provides that “in all matters, whether they relate to legal advice or to [the client’s] defense, consultations sent or addressed by an attorney to his client […] are covered by professional secrecy”, and as such, confidential. However, since the reform of the French Criminal legal system initiated in 2021,[8] the French Code of Criminal Procedure now authorizes the seizure of attorney-client communications from an attorney’s professional or personal premises, except if such communications relate to the exercise of the rights of defense.[9] It remains to be seen whether the discrepancy between the case law of the Cour de cassation’s various divisions will remain in the future.
[1] French Cour de cassation, Criminal Division, January 10, 2023, No. 21-85.526.
[2] President of the Paris Court of Appeals, September 15, 2021, Order No. 57 (RG n° 20/13926), confirmed by the French Cour de cassation, Criminal Division, January 10, 2023, No. 21-85.524.
[3] President of the Paris Court of Appeals, September 15, 2021, Order No. 58 (RG nº 20/13949).
[4] Article 6, §1 of the European Convention on Human Rights.
[5] « Privilège légal » in the original French version of the ruling.
[6] See French Cour de cassation, Criminal Division, November 25, 2020, No. 19-84.304. In this case, the DGCCRF had seized communications between the company Au Vieux Campeur and its outside legal counsel during dawn raids at the company’s premises. Following Au Vieux Campeur’s successful challenge of the seizure of these documents before the Court of Appeals of Chambéry, the French Cour de cassation ruled that, although attorney-client communications are always protected by professional secrecy, they may nevertheless be seized provided that they do not relate to the exercise of the rights of defense. Consequently, the Cour de cassation remanded the case to the Court of Appeals to assess whether the documents in dispute related specifically to the exercise of the rights of defense.
[7] See French Cour de cassation, Commercial Division, May 5, 1998, No. 96-30.116. In this case, following a dawn raid conducted by the tax administration at a law firm’s premises, the administration claimed that legal consultations, opinions and interview notes which did not relate to the rights of defense should not be protected from seizure. The French Cour de cassation nevertheless ruled that consultations prepared by an attorney for his client as well as attorney-client communications are covered by professional secrecy, and therefore could be seized only if they provided evidence of the lawyer’s participation in the alleged tax fraud. See also French Cour de cassation, Commercial Division, October 20, 1998, No. 96-30.117 and French Cour de cassation, Commercial Division, May 3, 2012, No. 11-14.008, ruling that, in all matters, whether they relate to legal advice or to the client’s defense, legal consultations, attorney-client communications and interview notes are covered by professional secrecy regardless of their connection with the rights of defense, and therefore cannot be (or remain) seized.
[8] Law No. 2021-1729 of December 2021 for confidence in the judiciary (Loi n° 2021-1729 du 22 décembre 2021 pour la confiance dans l’institution judiciaire) aimed at restoring confidence in the judicial institution by improving the conduct of criminal proceedings and reinforcing judicial guarantees during criminal investigations and trials. Inter alia, the law strengthens the control of preliminary investigations, the respect of the adversarial principle and the protection of the investigation secrecy. It also – prima facie – increases the protection of the attorney’s professional secrecy, which is now recognized in criminal proceedings by the preliminary article of the French Code of Criminal.
[9] See French Code of Criminal procedure, Article 56-1, as modified by Law No. 2021-1729 of December 2021 for confidence in the judiciary (Loi n° 2021-1729 du 22 décembre 2021 pour la confiance dans l’institution judiciaire).