In Germany there is no legal obligation on companies to establish a whistle-blower system. However, many German companies have chosen to implement a whistle-blower hotline as part of their compliance management systems. Often, companies instruct external legal counsel as an ombudsperson to handle the correspondence with the whistle-blower during an investigation in order to safeguard the confidentiality of the information. Such hotlines are therefore intended to provide employees with a way to report cases of non-compliance to the relevant authorities on a confidential basis.
However, the Bochum District Court handed down a decision on 16 March 2016 (case no. 6 Qs 1/16) to the effect that, where an official investigation takes place, documents held in safe custody by a lawyer appointed as ombudsperson by a company will not be protected from compulsory disclosure/production. Contrary to its comprehensive definition, the prohibition from disclosure provisions in Sec. 97 (1) No. 3 StPO (German Code of Criminal Procedure) will also not enable the attorney to refuse to give testimony (Sec. 53 (1) s. 1 No. 3 StPO). Legal privilege will not therefore apply to disclosures made by a whistle-blower in the context of an investigation. Accordingly, any information provided by the whistle-blower to the authorities may subsequently be used to prosecute the company or the whistle-blower themselves.
This decision shows that what is protected is merely the relationship of trust between a defendant and the professional bearer of secrets commissioned by the defendant, and not the relationship between a non-defendant (i.e. the whistle-blower) and a professional bearer of secrets. Moreover, the relationship between an ombudsperson and a corporate employee is not an attorney-client or similar relationship. According to the court, a seizure prohibition pursuant to Sec. 160a StPO was to be excluded, as according to subsec. (5) the specially stipulated prohibitions in Sec. 97 StPO shall remain unaffected and thus take precedence over the general regulation. In particular, Sec. 160a StPO does not include any “most-favoured-person” clause.
This is the first time that a district court has dealt definitively with ombudspersons commissioned by companies. In practice, this decision exposes companies to a high degree of legal uncertainty and generally questions any whistle-blower system. After all, the refusal to afford a right to the whistle-blower to assert privilege in these circumstances means that the central issue, i.e. the very nature of the role of an ombudsperson – namely confidentiality and the anonymity of a whistle-blower – is compromised. An ombudsperson guarantees the confidential treatment of any information disclosed; otherwise the whistle-blower would not contact the ombudsperson. This guarantee, however, has little value where information is not protected against compulsory disclosure by the prosecution, which will jeopardize the future willingness of whistle-blowers to report anything to an ombudsperson. The decision of LG Bochum is therefore questionable also from a criminal policy perspective in view of recent successes of whistle-blower systems in the context of breaches identified within the framework of compliance management systems.
It would be advisable to eliminate the legal uncertainty caused to companies by the decision of LG Bochum by way of legislation clarifying the exact scope of the rules relating to compulsory dislcosure and the applicability of legal privilege to information dislcosed by whistle-blowers to ombudspersons in these circumstances. This could be done by done by way of a general legal provision governing the handling of whistle-blower systems, which does not yet exist in Germany.