The text to be discussed in a public session on April 30th by the National Assembly concerns the confidentiality of consultations with in-house lawyers, also known as legal privilege, and presents a double trap for both companies and economic democracy. The proposed law by Jean Terlier, a member of the Renaissance party from Tarn, suggests that consultations between in-house lawyers and company management should be confidential, protected from being seized by administrative authorities, and kept secret from those who may question them in civil or commercial court. Despite claims that this confidentiality would enhance economic attractiveness, French companies are already competitive in Europe and ranked first in terms of foreign investment attraction in 2023, according to Business France.
The amended text specifies that this legal privilege cannot be invoked against European authorities, a stance supported by the Court of Justice of the European Union due to the lack of independence of in-house lawyers who are ultimately subordinated to their employers. This protection would also not apply to foreign countries such as the United States, where the legal privilege recognized by the Upjohn Co v. United States case in 1981 only extends to lawyers and not in-house counsel, as proposed in Terlier’s bill. Therefore, if the text is passed on April 30th, French companies may mistakenly believe they are shielded when in reality, confidentiality would not be upheld during inspections by American authorities.
Legal privilege could also present ethical challenges for French businesses, as they are increasingly required to adhere to compliance standards and ensure the ethical conduct of their organization, subcontractors, and suppliers. The era of “compliance” mandates that companies uphold ethical standards and face consequences for non-compliance, with the state enforcing adherence to these rules. The proposed legal privilege could hinder efforts towards ethical business practices and accountability within the French corporate sector, potentially undermining the progress made in establishing transparent and responsible business operations.
The text raises concerns regarding the impact of legal privilege on economic democracy, as it could create obstacles to transparency and accountability within companies. By shielding consultations between in-house lawyers and management from oversight and scrutiny, the proposed law could limit access to information that is vital for safeguarding the interests of stakeholders and the public. This lack of transparency may erode trust in businesses, stifle ethical decision-making, and hinder efforts to promote economic democracy by ensuring fair and equitable practices within the corporate sector.
Overall, the proposed legal privilege legislation, if passed, could have wide-ranging implications for the French business landscape, affecting economic attractiveness, ethical standards, and democratic principles. It is essential for policymakers to carefully consider the potential consequences of such laws on corporate governance, transparency, and accountability, and to ensure that any legislation strikes a balance between protecting confidential information and upholding fundamental principles of ethics, transparency, and economic democracy within the business community.
