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Lex Mundi Global Attorney-Client Privilege Guide

Luxembourg

(Europe) Firm Arendt & Medernach

Contributors François Kremer

Updated 25 Mar 2020
Is the ACP recognized in your jurisdiction?

In our jurisdiction, all communications between attorneys and their clients are privileged and protected as such, by law and by professional rules as well.  According to the provisions of Article 35 (1) of the Legal Profession Act and Article 458 of the Luxembourg Criminal Code, attorneys are subject to an obligation of absolute professional secrecy. Under the Council of Order Regulations, this secrecy is absolute and unlimited in time unless it is otherwise provided by law. The protection extends to every type of communication and information exchanged between the attorney and the client (letters, email, telephone conversations, etc.)

Further, every communication between lawyers is specially protected, as its content may not be divulged to the Courts unless the correspondence is specifically marked to be official.

As regards communications with foreign lawyers, the protection cannot be entirely guaranteed by Luxembourg law, thus special rules apply, according to which a lawyer needs to assure himself whether his foreign counterpart can guarantee that the correspondence is treated as “without prejudice”.
 

If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure...

The ACP is recognized in Luxembourg. But this is not as broad as the theory of "work-product privilege", in which the lawyer is allowed to keep or not to keep certain documents prepared for the trial. On this subject, see above. 

Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product?

There is no difference between civil and criminal matters, save that a lawyer may communicate freely with his client if the latter is in jail, without any possibility for the judicial authorities to listen in or to open the correspondence between the lawyer and his client.

In criminal cases, the juge d’instruction may, in exceptional circumstances, forbid a detainee to communicate with his attorney.

In the same way that a lawyer may transmit to the judge information he has received from his client, the lawyer is called upon to communicate to the administrative authorities data that his client has sent him for the sole purpose of defending his client's interests. The administration and civil servants are in turn bound by professional secrecy. However, the lawyer may not disclose the confidences made to him or other information covered by professional secrecy or the confidentiality of communications between lawyers. 

In addition, the authorities may also require the lawyer to disclose certain information on his relations with his client in matters relating to the fight against money laundering and terrorist financing, which then exempts the lawyer from professional secrecy under Article 5(4) of the amended Law of 12 November 2004. 

Finally, lawyers' premises and all correspondence between lawyers (verbal or written), and between lawyers and their clients, are privileged and protected against forced disclosure. In the case of search by criminal authorities in an attorney's office, all confidences and consultations between lawyer and client, insofar as they relate to the defense, shall be inviolable wherever they are located. The investigative measure carried out in a lawyer's office must pursue a lawful purpose and be necessary and proportionate. The President of the Bar or the substitute must be present. The investigating judge can decide to seize documents which are declared confidential by the lawyer, in which case they are sealed and the final decision regarding their disclosure will be made by the court.

In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.)

The protection is designed such as to protect the client.  Under the Council of the Order regulations, a lawyer shall ensure that the persons he employs and any other person with whom he cooperates and/or collaborates in his professional activity comply with professional secrecy.  Thus, secrecy applies not only to the attorney but also to any of his employees and interns.

Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications?

The attorney-client privilege does not apply for in-house counsel at any time, as under the law of Luxembourg, a lawyer registered with the Bar may only work in an independent fashion, which is not the case of the in-house counsels, bound by an employment contract with their employers. 
 

Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality?

This protection does not extend to an in-house counsel, since in Luxembourg, as under the law, the legal profession has basically a monopoly to represent before the Courts, provide legal advice or draft legal deeds under Article 2 of the Legal Profession Act.

Further, there is no such specific duty of confidentiality for in-house counsels, employees, officers or directors of companies, save for the case where such a duty is provided for by contract and the very special case of credit institutions and professional institutions of the financial sector, for which the law provides a general duty of confidentiality, aiming at the protection of the clients.

Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar?

In Luxembourg, a lawyer registered with the Bar may only work as an independent, and thus is not allowed to work as an in-house counsel for a company and cannot be employed in the public or in the private sector other than a law firm under art.1 of the Legal Profession Act.
 

Is the common interest doctrine recognized in your jurisdiction?

The common interest doctrine is not recognized as such in Luxembourg, but a lawyer may freely share information at his disposal with other lawyers provided that it is in the client's interest to do so.

How is the doctrine articulated in your jurisdiction?

The theory of common interest doctrine does not permit counsel to unnecessarily disclose the elements of a file even though they are also subject to a duty of secrecy. However, where the client appoints several lawyers to defend his or her interests in different cases, the lawyers may not share information received from each other, even if they consider it useful for the defense of interests assumed by the other lawyer. 

However, secrecy may be shared within an association of lawyers, in which case the associated professionals become one person who has been entrusted with the common trust. The Council of Order regulations recommend that the sharing of secrecy within the association should be limited to what is strictly necessary.
 

Must a common interest agreement be in writing?

The common interest agreement need not be in writing.

Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect?

Litigation funding is allowed and is expressly provided by the law for persons who cannot afford the cost of a lawsuit. The Council of the Order ensures the assistance of persons who cannot find an attorney or whose resources are insufficient to defend their interests. In this case, the President of the Bar is responsible for deciding on the allocation of legal aid.

Apart from anti-money laundering duties of the lawyer, there are no particular rules about litigation funding in Luxembourg. Litigation funding is therefore permitted on the condition that the lawyer is not placed in a situation of conflict of interest between the interests of the client and those of the third-party funder. It should nevertheless be noted that quota litis pacts, under which the third party could demand a percentage of the sum obtained in court, are prohibited. Fees must, therefore, be set according to the importance and complexity of the case, the reputation and work done by the lawyer and the final amount obtained in court.

The lawyer must preserve his independence with regard to third parties who intervene financially in the case, taking care to avoid falling into the dependence of third parties who claim to lead the principal's defense and who will eventually pay the fees. He must therefore always bear in mind the interests of his client and act in strict compliance with the rules governing the profession.
 

Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection

Litigation funder is not prohibited from sharing any information he is aware of relating to the litigation. But everything that the litigation funder tells the lawyer falls within the scope of the ACP. Actually, section 2 of the Legal Profession Act expressly provides that secrecy applies to any information about client and his business, or of which the lawyer becomes aware in the course of the practice of his profession and regardless of the source of that information. It must be inferred from this that all information relating to the client's business and reported by the third-party funder is covered by ACP.  

Is the crime-fraud exception recognized in your jurisdiction?

The rule of professional secrecy must give way when certain values, which are indisputably of higher value such as life, health or freedom of others, conflict with it.  Nevertheless, under article 140 of the Luxembourg Criminal Code, the attorney has no obligation to inform the judicial or administrative authorities of a crime whose effects can still be prevented or limited, or whose perpetrators are likely to commit new crimes that could be prevented.

Moreover, as explained in "Is the ACP recognized in your jurisdiction?", the law allows the lawyer to break the silence on the confidences made to him in the context of the fight against money laundering and the fight against the financing of terrorism.

What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction?

The Disciplinary and Administrative Council, in a decision of 12 June 2013, recalled that professional secrecy is an obligation and that the argument that it should be waived in the face of a criminal offense is not provided for as an exception to the principle of legal professional privilege.
 

Article 7.1.3 of the Council of the order Regulations provides that a lawyer cannot be relieved of his professional secrecy by his principal, by any authority or by anyone else. The Council of the Order Regulations of 2013 have reinforced this obligation.

 

With regard to the fight against money laundering, the obligation to denounce is provided for by Article 5(4) of the amended Law of 12 November 2004, Art. 5(4) and "constitutes an exception authorized, and even imposed, by law to the respect of professional secrecy, the violation of which remains sanctioned by Article 458 of the Criminal Code" (Court of Appeal, Cons. chamber, 2 July 1993, judgment n°124/93).

Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?)

In the event of the reappointment of a new lawyer, the lawyer whose file is taken over is obliged to transmit the entire file to the client's new lawyer. The lawyer taking over the file must immediately inform his predecessor by contacting him and inquire with him about the sums still owed by the client. He cannot be satisfied with the client's assurance that the predecessor has been paid.

As soon as the file passes from the first lawyer to the second, the rules of professional secrecy continue to apply and the second lawyer is bound by an obligation of confidentiality (Council of the Order regulations, art. 5.3.4) and is required not to judge the quality of the work of his predecessor. 

The solicitor must "forthwith transmit to the successor solicitor the file with all documents relevant to the prosecution of the case, emphasizing the time limits for the proceedings" in accordance with the Council of the Order regulations (Council of the Order regulations, s.2.4.3.2). The Disciplinary and Administrative Council of the Order considered that this was not a violation of the lawyer's civil rights (Disciplinary and Administrative Council, April 23rd, 2014, n. D4/13-14).

Nevertheless, in the Diekirch Bar, a rule exists that allows the unpaid lawyer to withhold all documents (Council of the Order regulations, ex-art.2.4.3.2).
 

What are the elements of the protection in your jurisdiction?

If the file is forwarded to the successor lawyer directly, the rules of confidentiality apply and the former lawyer may hand over to the latter any confidential correspondence exchanged with other colleagues, provided that the new lawyer is subject to rules of professional conduct comparable to those in force in Luxembourg.

On the other hand, if the file is handed over to the client, the lawyer may not hand over the binder containing the correspondence between lawyers, as confidentiality would be compromised. It must be removed from the file before the file is handed over to the client and must remain in the possession of the lawyer until the successor complains, in accordance with the Council of the Order regulations.
 

Does your jurisdiction recognize an accountant-client privilege?

Article 41 of the Financial Sector Act of 5 April 1993 provides for the existence of banking secrecy and requires credit institutions to respect banking secrecy. This secrecy is even extended to all players in the financial sector. Article 458 of the Criminal Code also provides for criminal prosecution in the event of failure to comply with this professional obligation. This secrecy is a matter of public order and serves to protect the authority of the profession and the private life of the client. For secrecy to apply, the perpetrator must be a person bound by secrecy (i), the banker must have a disclosure to make (ii), the disclosure must relate to facts that the banker has gathered in the exercise of his profession (iii), and the disclosure must have been knowingly committed (iv). The banker is subject to civil and criminal penalties.

This secrecy is subject to certain exceptions when several persons hold the same account, as they all have the right to receive the same information. Where the customer is a legal person, the banker will only disclose information to the organs of that legal person which are legally and statutorily appointed to represent it. These bodies may only receive information concerning the account while they are in office, even if the information requested relates to a time prior to the representative taking up his duties. However, the banker may no longer provide such information to this person once his or her term of office has ended. Once the mandate has ended, the natural person no longer represents the company and thus becomes a third party to the banking relationship. The banker will therefore not be able to provide him with information, even if it concerns a time when he was an organ of the legal entity holding the account.
 

Does your jurisdiction recognize a mediation privilege?

The mediation procedure may be set up by agreement. According to article 1251-6 of the New Code of Civil Procedure, the documents drafted, the communications made and the statements collected during the mediation and for the purposes of the mediation are confidential. Unless all parties agree to homologation, neither the mediator nor the persons involved in the administration of the mediation agreement may use, produce or invoke them in any judicial, arbitral or administrative proceedings or any dispute resolution procedure aiming at resolving conflicts and they are not admissible as evidence, even as an extrajudicial confession.

This obligation of secrecy may be waived to allow the disclosure of the mediation agreement for overriding reasons of public policy. In the event of a breach of the obligation of confidentiality by a party or a person participating in the mediation, that party or person shall be liable to pay damages. Documents disclosed in breach of this obligation shall be automatically excluded from the proceedings.

Finally, the mediator may not make public or testify about the facts of which he or she has become aware during the mediation procedure, and professional secrecy applies to him or her pursuant to Article 458 of the Criminal Code.
 

Does your jurisdiction recognize a settlement negotiation privilege?

Under the provisions of the New Civil Procedure Code, it is part of the mission of the judge to reconcile the parties. The parties have always the option to conclude a settlement agreement, even during the course of the trial. A complete or a partial reconciliation may be recorded in the minutes signed by the judge and the parties, which constitute an enforceable title. In the practice, settlements are always confidential, even if nothing is legally provided.

Lex Mundi Global Attorney-Client Privilege Guide

Luxembourg

(Europe) Firm Arendt & Medernach

Contributors François Kremer

Updated 25 Mar 2020