AIJA News

AIJA Half-Year Conference Interview: Corporate governance today and tomorrow

26 April 2018

A conversation with José Costa Pinto, Founding Partner at Costa Pinto & Associados - Sociedade de Advogados, President of the National Association of Portuguese Young Lawyers (ANJAP) and member of AIJA.

José will be speaking at the session “Corporate governance today and tomorrow” during the AIJA Half-Year Conference taking place from 23-26 May, in Warsaw. 

Q1: What can participants expect from the session “Corporate governance today and tomorrow”?

Participants can expect a multi-jurisdiction view on the most relevant corporate governance issues today, such as board composition and structure, remuneration and compensation, shareholder activism, gender gap and culture and behaviour matters.  I believe that, further to the speakers’ interventions, we can also expect an interesting debate and exchange of ideas with the audience.

Q2: What are the main challenges and opportunities for effective corporate governance?

The main challenge is to be perceived as an asset by companies, shareholders and stakeholders rather than a cost and a burden they have to overcome. I believe, however, that the latest financial and corporate scandals have contributed to a significant increase of social and academic awareness regarding the value of “good governance” over the last decade. This can be decisive for the dawn of effective corporate governance. 

Q3: What are the current developments in corporate governance? And how have these impacted the business?

From a Portuguese perspective, I have to highlight the new “Corporate Governance Code” which was enacted by a civil association – the Portuguese Institute of Corporate Governance – and replaces as from January 2018 the former “Corporate Governance Code” issued by the Stock Market Commission. Portuguese companies will now have to adapt their own structures and practices to the new rules, which will be evaluated for the first time in 2019.   

Q4: Shareholder activism and their ability to influence corporate management have steadily increased over the last year. What are best practices in effectively engaging with shareholders and addressing their concerns?

It is indeed correct to state that the pressure on the boards of companies has significantly increased over the last years, due to the implementation of several mechanisms that have improved shareholders’ activism. In several jurisdictions there were significant changes in law and corporate governance codes aimed at increasing shareholders’ powers and enhancing their ability to control the board of directors and the management. It is crucial to minimise the information gap between shareholders and the board, to boost the former’s ability to participate – on a standalone basis or together with other shareholders – in the shareholders’ meeting, as well as to submit a wider range of matters to their prior approval.      

Q5: What is the role of the lawyer in establishing effective corporate governance practices?

Lawyers must be side-by-side with the boards and the management, developing a permanent and vigilant work on the development of the companies’ activities and their capacity to maintain their governance models working properly.

Q6: In your view, what are the skills a good corporate governance lawyer should have to be successful in his/her career?

Since corporate governance is a multidisciplinary field of practice, it is crucial for corporate governance lawyers to be constantly up-to-date, not only on legal matters related to corporate governance, but also on management and economic matters. This entails a permanent study and constant legal practice, but also a capacity to follow the news on the most relevant companies and economies to understand the full framework of the corporate governance and, thus, be able to properly advise clients.

The Half-Year Conference will be divided into two seminars. The first one will focus on current trends and developments in corporate governance, while the second one will focus on the relationship between in-house and outside counsel and their clients. Other exciting news will be announced soon, so stay tuned on our social media channels and website to get the latest updates.

See you in Warsaw!

 


AIJA Half-Year Conference Interview: Upholding judicial independence

26 April 2018

The independence of the judiciary will be one of the topics discussed at the Human Rights Session hosted during the AIJA Half-Year Conference on 24 May, in Warsaw.

To find out more, we continue our series of interviews with Przemysław Tacik, Assistant Professor at the Institute of European Studies, Jagiellonian University in Kraków, and strong promoter of Human Rights in various dedicated projects.

To see the full programme and register, visit the dedicated event web page.

Q1: What are the challenges to the independence of the judiciary in today’s world? And why is judicial independence important?

Judicial independence remains a keystone of liberal democracy. The existence of objective and impartial courts guarantees civil rights and liberties which otherwise may be easily infringed by the executive or the legislative. Moreover, the public recognition and authority of independent courts promote equality, the Rule of Law and legal certainty. Without the independence of the judiciary, (1) rulings in criminal cases turn into a public vendetta, often of a political character; (2) rulings in civil cases will not be respected by the losing party and will be treated with suspicion of corruption or extra-judicial motives; (3) rulings in administrative matters will not be based on equality of arms between the administration and the citizen.

The independence of the judiciary is enshrined in most national constitutions and in human rights protection acts of international law: Art. 10 Universal Declaration of Human Rights, Art. 14 (1) International Covenant on Civil and Political Rights and Art. 6 (1) European Convention on Human Rights. It is also well-embedded in the EU law and explicitly guaranteed by Art. 47 (2) Charter of Fundamental Rights of the EU.

In the transforming public sphere of the early 21st century, independent courts remain one of the few stable points of reference. To quote Ronald Dworkin, they are assigned the task of “the public use of reason”. In times when authorities collapse, and the public discourse is getting dominated by persuasive, but shallow arguments, the courts may have the chance to defend the culture of the argument and reasoning. Independence of the judiciary involves a selection of candidates for judges who are highly qualified and able to conduct in-depth analyses of the case. The stability of their positions guarantees broad perspective and “long breath” of arguments. Without proper independence of the judiciary, the system of law is more prone to incoherence, narrow positivism and abstraction from democratic values.

It is, however, one of the reasons for which the judiciary often comes under attack from anti-liberal or, to use a vague, but perhaps indispensable term, “populist” movements. As recently reminded by Jan-Werner Müller in his study What Is Populism?, these movements draw their political force from a sharp distinction between “the elites” and “the people”. Much as this distinction is fuelled by economic discrepancies, it is also projected onto state apparatuses. In this perspective, the independent judiciary is by definition a seat of “elites”. Preservation of independence against populist (un)reason and adequate response to justified criticism are two main challenges that the contemporary judiciary must face.

Q2: In your view, how can countries increase or preserve the true independence of the judiciary?

Firstly, the independence of the judiciary depends on institutional guarantees that have become a democratic standard, well-embedded in human rights protection acts of international law. In this regard, their maintenance is a necessary condition of independent judiciary.

Nevertheless, apart from these institutional guarantees the true independence of the judiciary requires an appropriate legal culture, which cannot be safeguarded by purely formal means. This culture includes authority of courts and their rulings, as well as perception of the judiciary as vital part of the democratic society. Naturally, a major part of responsibility for developing such a culture lies with courts themselves. Only through issuing well-justified and impartial rulings can they inculcate respect for the independence of the judiciary.

The independence of the judiciary is not autotelic. It is a means for safeguarding civil rights and liberties, as well as administering justice. Judges need to bear in mind that the independence of the judiciary may be effectively defended and developed only if it has observable effects for the society. Therefore, it might be argued that especially in the times when the independence is challenged, courts must be vigilant to consider the social impact of their rulings.

Q3: What are the main trends in the judiciary across Europe vs. globally?

Naturally, given the current complexity of the globalised world and diversity of legal systems it is hard to outline general trends in this area. There are countries with authoritarian regimes, where the judiciary faces completely different challenges from the one in developed democracies. Nevertheless, it could be surmised, although with great circumspection, that the judiciary in all parts of the world face two fundamental problems. The first is the increase in the complexity of legal systems. Modern law is characterised not only by a fast growth of the number of norms that are in force, but also by a growth of the number of sources they flow from. In the globalised world the myth of a positivist system of law which would be coherent, reasonably extensive and could assure decidability of each case, has been superseded by the postmodern and pluralist vision of an excessive, overdetermined and unkempt field of competing norms. Courts can no longer be just “mouth of a law”, as in Montesquieu’s vision. They need to plough through massive normative material, consider various sources of norms and elaborate interpretations that will establish relations between them. Consequently, the workload of courts seems to increase.

Secondly, we can refer to the defence of the independence of the judiciary against attempts of the executive to control it. Naturally, concrete realisations of this trend differ in various countries. It seems, however, that throughout the world liberal democracies are on the wane, whereas authoritarian trends gain ground.

The situation in Europe does not differ substantially from these trends. The complexity of legal systems is even greater in Europe due to advanced integration. European courts tackle legal pluralism on a daily basis, because they have to combine norms of national origin, the EU law, general international law and regional instruments of international law, such as the European Convention on Human Rights. As to the defence of the independence of the judiciary, the problem is particularly acute in the Eastern part of Europe, especially Poland and Hungary. Nevertheless, Western Europe is not free from it: the anti-systemic culture which arose in the UK in the wake of the Brexit is responsible for a widely popular contest of the judiciary.

Q4: What is the situation in Poland and how can the country overcome the current assault on the judiciary?

The general prospects for the independence of the judiciary in Poland are currently dim. Since 2015, Polish judiciary is under constant pressure from the executive, which undermines its independence, effectiveness and authority.

In the years 2015-2016, the current ruling majority undertook some unconstitutional reforms whose clear aim was to introduce its nominees to the Constitutional Court and gain control over it. Three of the new nominees were unconstitutionally elected for the places which had been already occupied by judges to whom the president of Poland refused swearing-in ceremony and thus precluded them from taking office, even though they had been elected lawfully by the lower chamber of Polish Parliament. Moreover, the current president of the Constitutional Court was elected in a procedure which was questionable from a legal point of view. The current vice-president of the Court was revealed to be a former member of secret services, which he concealed during hearings before the Parliament commission. The law on the Constitutional Court was amended a few times within this short period to facilitate the process of gaining control over it. As a result, the Court was dominated by judges who expressed explicit support for the ruling majority. Before that happened, the executive had usurped a de facto power to assess validity of the Constitutional Court rulings, because it refused to publish in the official journal those rulings which found reforms of the Constitutional Court Law unconstitutional. These rulings remained unpublished and the Constitutional Court sits currently in unconstitutional formations.

In 2017, the ruling majority undertook far-ranging attempts to gain control over the general judiciary. After massive social protests in July 2017 and the subsequent veto of the president of the Republic, a few major reforms were finally adopted in December 2017.

In 2018, the ruling majority pursues with the work on amendments of the Supreme Court Law, with an explicit view to have sway over the Supreme Court after some of its current judges, including the First President, will reach the mandatory retirement age. The new project of the Law envisages that after the seat of the First President is vacant, the President of the Republic will be entitled to nominate an acting First President who is not stipulated by the Constitution. It will allow the ruling majority to directly influence the person in charge of the Supreme Court.

As a result, a part of the Polish legal system functions currently in the state of exception. Clearly, unconstitutional laws are still in force because either the Constitutional Court’s rulings which declared them unconstitutional were not published, or because the new Constitutional Court – sitting in unconstitutional formations – does not declare them unconstitutional. Moreover, the Constitutional Court in its new composition ignores the unconstitutionality of the laws which led to its formation. In this respect, Poland significantly differs from Hungary, where the undermining of the position of the judiciary was generally carried out with the use of constitutional amendments. In Poland, the Constitution was not amended, but effectively rendered inoperative. The current assault on the judiciary can hardly be overcome, because in most respects it has either already happened or will happen within a few months. The whole process of overtaking the Supreme Court will have been probably finished by July, when new judges will be appointed and the new chambers will become operative. It cannot be stopped by the Constitutional Court, because it is clearly dependent on the ruling majority. Most of the amendments that will undermine the independence of the judiciary are already in force; it is only a matter of time before the process of appointing new judges is complete. It remains an open question whether and how this process could be reversed in the future. Given the entanglement of legal matters concerning the Constitutional Court and the Supreme Court, it will probably not be enough to simply apply the Constitution to declare some laws unconstitutional and return to the status quo ante. The continuing functioning of unconstitutional formations of the Constitutional Court has created a legal chaos, in which separating valid from invalid acts will be extremely difficult. Moreover, unconstitutional acts will have their consequences which may be irreversible. What might be needed is adopting a new constitution which will re-establish the Constitutional Court and the Supreme Court. Nevertheless, the process of subjugating general courts to the executive will be hardly reversible – not only because new political nominees will be already appointed as judges, but because the chilling effect on the independence of judges will have long-lasting effects on the legal culture of the Polish judiciary.

 


AIJA members can attend the ABA Young Lawyers Division Spring Conference at a discounted rate

23 April 2018

The American Bar Association is hosting their Young Lawyers Division Spring Conference from 10 to 12 May in beautiful Louisville, Kentucky, US. The Conference will take place at the historic Brown Hotel in downtown Louisville.

The conference will offer a large variety of continuing legal education programming on topics that include but are not limited to intellectual property, intimate partner violence and the law, gender equity in the legal profession, family law, and ethics training. Additionally,  all conference registrants can benefit for one-on-one Executive Coaching Sessions with Debra Forman, a highly coveted professional life coach, at no extra cost. The programme will also include numerous social networking opportunities, including an International Oratory Competition on Friday afternoon, a Friday evening Gala, and an International Attendee Reception on Saturday afternoon.

ABA waives the $95 registration fee for the conference if you are a member of AIJA. For more information and to register, visit the dedicated webpage.

 


AIJA Half-Year Conference Interview: Reflections on judicial independence

20 April 2018

The independence of the judiciary will be one of the topics discussed at the Human Rights Session hosted during the AIJA Half-Year Conference on 24 May, in Warsaw.

To find out more, we interviewed Mikołaj Pietrzak, Advocate, Dean of the District Bar Council in Warsaw, permanent representative of the Polish Bar at the Council of Bars and Law Societies of Europe (CCBE) in the Human Rights Commission and Partner at the law firm Pietrzak Sidor & Partners

To see the full programme of the Half-Year Conference and register, visit the dedicated event web page

Q1: What are the challenges to the independence of the judiciary in today’s world? And why is judicial independence important?

A strong constitutionally enshrined tri-division of powers and system of safeguards, checks and balances system should work effectively to protect judicial independence, and as a result, human rights and fundamental freedoms.

Where systemic safeguards allow, politicians throughout the world will attempt to apply political pressure on court decisions using different methods. This may sometimes be merely public criticism by a cabinet minister of a specific judgment or may go so far as passing a law dismissing an entire group of judges and replacing them with political appointees. 

This process of undermining the tri-division of powers, the system of checks and balances, and as a result the independence of the judiciary, is occurring to various degrees in many Central and Eastern European states, like Poland, Hungary, Russia, Azerbaijan, Turkey.

This process constitutes a direct threat to domestic systems of protection of human rights. Human rights violations committed by public authorities cannot be effectively questioned or remedied without independent courts and independent judges. Violation of the guarantee of the independence of the courts and judges makes human rights but a meaningless declaration.

Q2: In your view, how can countries increase or preserve the true independence of the judiciary?

This is a serious and broad question and we certainly cannot exhaust the problem in our short conversation. But I think it’s important to draw attention to two issues.

First, we need to concentrate on civic education, in particular on the subject of human rights and law, shaping awareness, understanding and respect for democratic institutions, for the system of checks and balances. Looking back, this is an area in which much more could have been done both in Poland and Hungary.

Secondly, we need to change the language and fashion in which lawyers, especially judges, communicate with citizens. Much can be done to move this language away from a hermetic and technical language to one that is more comprehensible to members of our society. The legal community is naturally insular and closed to communication with the society. In Poland, it took the assassination of the independence of the courts for associations of judges and the judges themselves to open up and become active in the public space. Until now, they maintained a far-reaching restraint, were closed and therefore viewed as being removed from society and aloof. Democracy paid a great price for this closed-mindedness.

Q3: What are the main trends in the judiciary across Europe vs. globally?

As I mentioned, in Europe, which is not at all a uniform judicial organism, there are visible backlashes and questioning of core values, like democracy, rule of law, human rights. We are witnessing an emergence and strengthening of populism, and willingness to consolidate the judicial, legislative, executive power within the hands of the ruling political formations, and especially their leaders. I don’t see that tendency globally among other countries which – like European states - have a tradition of constitutional liberal democracy.

Q4: What is the situation in Poland and how can the country overcome the current assault on the judiciary?

Since 2015, Poland has been going through a constitutional crisis impacting firstly the Constitutional Tribunal. This Constitutional Court, responsible for the constitutional review of laws, no longer functions properly. The ruling party paralysed it first by electing new judges to the Constitutional Court, to fill three seats in the Tribunal which were not vacant (they were occupied by judges elected by the previous Parliament). The Constitutional Court itself ruled that these three new judges were in fact not judges. Ultimately however, the faux judges were allowed to act as judges by the politically appointed new president of the Constitutional Tribunal. The three real judges have not been admitted to the Constitutional Tribunal because the President refused to accept their oath, in violation of his constitutional duty. Since November 2015, parliament adopted many legal acts amending the Act on the Constitutional Tribunal, which were aimed at further paralysing and controlling the Tribunal’s work. At present, most of the judges (including the remaining faux judge, who has been appointed the vice president of the Tribunal) of the Constitutional Tribunal are connected to the ruling party and the tribunal has ceased to fulfil its role of critical constitutional review. On the rare occasions that it does actually proceed a case regarding the constitutionality of a given law, the Court has demonstrated a lack of willingness to provide any judgment in opposition to government opinions regarding controversial laws.

 As concerns the common courts, changes in the law on the organisation of courts in Poland were made in July 2017. The Minister of Justice received the power to revoke at any time any president of any court in Poland and appoint a new one without the obligation of consulting the representatives of the judges working in that court. Using this instrument, by February 2018 the Minister of Justice dismissed 130 presidents and vice presidents of the courts and replaced them with handpicked nominees. Needless to say, this created a chilling effect among judges and is a significant limitation of their independence.

In 2017 and 2018, the parliament hastily reformed the Supreme Court and the National Council of the Judiciary (a constitutional body which selects and appoints Judges and is intended to safeguard the independence of the judiciary). One of the most of controversial changes in these laws was the immediate termination of the terms of office for Supreme Court judges. All amendments related to the National Council of the Judiciary were aimed to ensure political control when appointing judges.

If you are interested in finding out more, you can read a statement in English from Iustitia, the largest association of Polish judges, which includes a detailed analysis of the situation in Poland regarding the judiciary. This is a reply to a misleading "white book" issued by the Polish government regarding problems with the judiciary and how the new laws are allegedly intended to solve these problems.

 


Using the law to shape effective corporate governance practices

17 April 2018

The legal landscape for corporate governance is constantly changing under the spotlight of evolving compliance, operational and market requirements. Effective corporate governance practices are essential to a good functioning of a company, including to its relationships with shareholders, suppliers or customers. In-house and outside counsel can be instrumental in improving the corporate governance practices of a company and managing risks that could affect the value of the business or shareholders. This will be a topic for further discussion at the AIJA Half-Year Conference from 23-26 May, in Warsaw.

AIJA invites all in-house and outside counsel and other legal professionals interested in the latest trends and developments in corporate governance to attend the Conference seminar titled “Corporate governance – current trends and development”. The Seminar is organised by the Corporate and M&A Commission of AIJA.

In the run-up to the Conference, Anne Toupenay-Schueller, Partner at JEANTET AARPI, member of AIJA and speaker at the Half-Year Conference, shares more details about the session and gives her view on the challenges and opportunities in corporate governance.

Anne says that during the Seminar, participants will have the opportunity to “exchange views on the latest developments, specifically regarding compliance. Related challenges and opportunities in various jurisdictions across the world will be also addressed”.

Challenges and opportunities for effective corporate governance

Corporate governance has evolved over the past years. We witnessed changes particularly with regards to compliance. For instance, Anne says, “in France, new legal requirements have been put in place for companies above certain thresholds to comply with compliance measures (the so-called “Sapin 2” law (No. 2016-1691 dated 9 December 2016), specifically on anti-corruption, trading in influence, but also the law No. 2017-399 dated 27 March 2017 on the corporate duty of vigilance for parent and instructing companies, to identify the risks and prevent damages to human rights and other fundamental freedoms). Certain companies are accordingly required to put in place measures and procedures (e.g.  cartography of risks, assessment procedures, alert procedures, etc.) and ensure an ongoing follow-up”.

Speaking about the opportunities in corporate governance, she adds that “an efficient corporate governance system can enable investors to have confidence in the business and the economy. You can then use the system in place to assess the performance of the company”. With respect to compliance, companies are invited to promote effective and strict practices, including a strong undertaking from the managers in the organisation and compliance processes. Good communications within the company on such practices are as well of great importance.

Over the past years, we have also witnessed the rise of shareholder activism and their ability to influence corporate management. More than ever, it is important to put in place processes that allow effective engagement. Anne refers to the principles of corporate governance from the OECD. She explains that these recommend providing sufficient information to shareholders on all decisions having a material impact/giving rise to fundamental changes on the company and the right to approve or to participate to them. For instance, “under French law, shareholders of limited liability company have access to information during shareholders meetings; they are entitled to raise questions in relation to the agenda. They also benefit from specific rights; certain decisions can only be taken in the shareholders meeting (e.g. modification of the By-laws). This can also raise the question of protection of minority shareholders and investors”.

The role of in-house and outside counsel

Anne believes that in-house and outside counsel can play a fundamental role in establishing effective corporate governance practices on various matters, such as “determining the most adapted governance structure for the company, assisting companies on compliance issues or advising them in case of a control from regulatory authorities”.

We also see that the ongoing advances in communications are changing the role of internal and external lawyers. Emails, mobile devices ease our communications but also increase the expectations of clients. Clients now expect lawyers to be accessible at all times and to respond even faster than in the past. Consequently, successful lawyers must be able to adapt and provide effective advice to clients in a timely manner. But success goes beyond this. A corporate governance lawyer should also be able to define business-oriented strategies and solutions for clients and understand their objectives. It is important to proactively anticipate issues and risks that clients may have to face.

Finally, there is a distinction to be made between in-house and outside counsel. The in-house counsel is generally involved in the process earlier, usually at the planning stages. So, compared to the outside lawyers - in-house counsel have the opportunity to shape decisions early and help the business minimise legal risks while achieving its objectives.

The Half-Year Conference will be divided into two seminars. The first one will focus on current trends and developments in corporate governance, while the second one will focus on the relationship between in-house and outside counsel and their clients. Other exciting news will be announced soon, so stay tuned on our social media channels and website to get the latest updates.

See you in Warsaw!

 


A guide for in-house and outside counsel on how to develop a successful relationship with clients

10 April 2018

How to speak to sell better to in-house counsel. Strategies on how to develop a successful in-house counsel – outside attorney relationship. Negotiating fees for legal services to meet clients’ expectations. Personal branding for legal professionals. These are some of the themes that will be discussed from 23 to 26 May at the AIJA Half-Year Conference in Warsaw.

AIJA invites all in-house and outside counsel and other legal professionals interested in improving their communications and negotiation skills to attend the Conference seminar titled “Happily ever after! Perspective from in-house counsel and law firms on how to develop a successful client-attorney relationship”. The Seminar is organised by the Skills, Career, Innovation, Leadership and Learning (SCILL) Commission of AIJA.

In the run-up to the Conference, we asked Štěpán Holub, SCILL President and Organising Committee Member at AIJA, about the main highlights of the seminar. “This will be the best place to understand what in-house counsel expect from outside lawyers and the other way around. The seminar will combine theory with practice and will seek to share examples from real-life situations”, Štěpán said.

For in-house counsel, it is important to assess whether a legal issue can be solved in-house, or if there is a need for outside expertise or additional resources. That is when usually a company decides to outsource and reach out to law firms, for instance. He says that “you have to act quickly on it, so you don’t lose a good business opportunity. As legal professionals, we need to be able to see our limits and handle legal cases and our clients both from a legal and commercial perspective”.

The seminar will also address best practices on how to best serve clients as an in-house or outside counsel. Developing a successful relationship with clients can be challenging, but there are ways to improve the likelihood of building a successful and lasting partnership. Štěpán believes that “in order to be successful, we need to see the issue through the eyes of the client and understand what is needed. Knowing the law is not enough, we need to know the industry and business we work for. It is easy to say but difficult to do. This is why AIJA will host a seminar dedicated to this subject at the Half-Year Conference in Warsaw".

To conclude, Štěpán says that the key to success is listening. “Listen first. We have two ears and only one mouth to listen twice as much as we talk. Sometimes it may seem difficult to do something as basic as listen. This goes beyond just noting down the basic facts related to the legal issues of the client. You need to listen to understand essential things, such as your client’s goals, needs and expectations”.

The Half-Year Conference will be divided into two seminars. The first one will focus on current trends and developments in corporate governance, while the second one will focus on the relationship between in-house and outside counsel and their clients. Other exciting news will be announced soon, so stay tuned on our social media channels and website to get the latest updates.

See you in Warsaw!

 


Highlights from the AIJA Seminar "The Challenges of Compliance and Anti-corruption"

09 April 2018

The AIJA Seminar "The Challenges of Compliance and Anti-corruption" took place from 23-24 March in Recife, Brazil. Mariëlle Boezelman, AIJA member and one of the moderators, speaks about the main highlights of the Seminar. 

The seminar presented a general overview on current topics related to the anti-corruption legislation and compliance programmes in various jurisdictions worldwide. Brazil was the perfect place to host this seminar, as Brazil has one of the largest ongoing anti-corruption investigations - also known as Operation Carwash. 

'Operation Car Wash' - in Portugese 'Operação Lava Jato', is an ongoing criminal investigation carried out by the Federal Police of Brazil and judicially commanded by Judge Sérgio Moro starting 17 March 2014. It is a cross-border investigation with more than one thousand warrants for search and seizure, temporary and preventive detention and coercive measures. In 2016, a breakthrough happened in the case. Odebrecht and Braskem - two Brazil based companies - pleaded guilty in U.S. federal court in Brooklyn to conspiring to violate a U.S. foreign bribery law after an investigation involving political kickbacks at Brazil’s Petrobras unearthed the bribery scheme.

Odebrecht SA and affiliated petrochemical company Braskem SA agreed on a penalty of $3.5 billion, the largest penalty ever in a foreign bribery case. This penalty resolved international charges involving payoffs to Brazil’s state oil company and others. The huge penalty was negotiated as part of a broad settlement with U.S., Brazilian and Swiss authorities. During the Seminar, we even learned that the Brazilian, Swiss and US public prosecutors have an Whatsapp group to keep in close contact to exchange information. As you can imagine, this raised questions about international judicial assistance and whether the legal requirements are met.

The Carwash investigation thus formed an important bases to discuss several topics during the AIJA seminar. We came across interesting differences between jurisdictions and problems. For instance, how is the principle of 'ne bis in idem' safeguarded in such cross-border investigations and how can two Brazilian companies plead guilty in a U.S. Court while a company in Brazil cannot be held criminally liable? These questions show that close contact between lawyers in such cross-border investigations is of vital importance.

Differences between jurisdictions worldwide

We discussed extensively some interesting differences between jurisdictions, specifically about the role of legal entities in different jurisdictions. In the Netherlands, it has been possible for a legal entity to be prosecuted since 1951 for specified economic crimes. And since 1976 it has been possible to prosecute legal entities for any crime according to article 51 of the Dutch Procedural code.

The question is how can a legal entity be held criminal liable? A legal entity does not have any hands or feet nor can it act by itself. It always has to be represented by a natural person. But how can acts (or omissions) of individuals (directors, managers, employees) be allocated to a company? Whether the criminal actions of a natural person can be attributed to a legal person depends on whether the company had control over the criminal activity and accepted it.

This means that if the criminal activity of a natural person is part of the normal business of the company, or is part of the company’s official or unofficial policy, or is more or less accepted by the company, the criminal offence can be attributed to the company. The Dutch Supreme Court summed up four situations in which conduct, in principle, may be said to be carried out ‘within the scope of a corporation’:

  • the act or omission has been carried out by someone who works for the company;
  • the conduct fits the everyday ‘normal business’ of the corporation;
  • the corporation gained profit from the conduct concerned;
  • the course of action was at the ‘disposal’ of the corporation, and the corporation has ‘accepted’ the conduct – acceptance including the failure to take reasonable care to prevent the conduct from being performed.

In our daily practice, we see that the public prosecution office tends to hold legal entities responsible for actions of an employee without assessing whether the acts of the employee can be attributed to the company. Moreover, considering the jurisprudence of the Dutch Supreme Court the legal entity has to act intentionally to commit a crime. All the relevant circumstances have to be taken into account for this. For instance, if an employee committed wrongful acts it has to be taken into account whether the company has given clear instructions to the employee to do its work right. Furthermore there should be a reason for the legal entity to doubt the satisfactory services of the employee. If not a crime of an employee cannot merely be attributed to the legal entity.

This jurisprudence thus shows that internal regulations and compliance procedures are of vital importance to discuss issues about (criminal) liability.

This AIJA seminar showed that cross-border investigations are growing and lawyers have to take into account all the differences between jurisdictions and work closely together to ensure that clients will receive a tailor made solution for every jurisdiction.

This article has been originally published by Mariëlle Boezelman on www.lawlunch.com. Note that it has been slightly adapted.

 


3 Reasons to enter the Best International Future Lawyer Award competition

06 April 2018

With entries now open, we invite law students worldwide to submit a written essay on the following subject: “The moon is now colonised, and you are in charge of its legislation. How do you handle it?”

Any object launched from the Earth is registered by a state, and through this registration it becomes subject to that state's national jurisdiction and control. Thus, a space colony would operate in accordance with the laws of the state that registered the base or shuttle they arrive with. However, we see there is a chance that a future colony might seek independence. 

So, we are challenging law students with this notion that humans may one day build societies beyond Earth and demand their independence. 

Why you should enter the competition
Here are, in no specific order, 3 reasons why you want to enter the Best International Future Lawyer Award competition:

Credibility
Soon you will be searching for your first job or maybe you are already on the lookout for a traineeship. An international award will make you stand out from other candidates.

Recognition
The Best International Future Lawyer Award will be handed out in front of over 800 international legal professionals at the 56th International Young Lawyers' Congress in Brussels, so you can get the recognition your work deserves. Building a professional network is one of the fundamentals of success at the start of your career. Winning is a great way to start building your professional network as you will get access to free AIJA membership until 2021.

Confidence
Participating in the competition is a statement. It shows that you are confident in your knowledge of law and that you take pride in your work. Such demonstration of confidence is a good way to impress your future colleagues and potential employers.

Deadline for submissions is 15 May 2018. For more information about the competition and to submit: awards.aija.org

 


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