December 01, 2016

German Court Denies Confidentiality for Corporate Ombuds

A district court in North Rhine-Westphalia has held that a corporate Ombudsman cannot withhold information received from anonymous sources when requested by a state prosecutor. Although it has limited legal precedence at this point, it could undermine the reason many German companies appoint external Ombuds.

The case before the Landgericht Bochum, a criminal trial court, involved a corruption investigation against the head of a private company that had appointed an outside attorney to serve as an Ombuds. After receiving complaints from whistlerblowers, the Ombuds forwarded some details to the company's integrity officer. In a later investigation, the Attorney General sought the full evidence from the Ombuds who complied but sought a court ruling on the issue. The court upheld the disclosure, ruling that the criminal statutes did not protect the relationship between the anonymous sources despite assurances of confidentiality.

The decision is subject to appeal, but legal observers point out that it could dissuade whistleblowers from coming forward.  Moreover, many German companies (e.g. Deutsche Bahn, Volkswagen, Allianz) continue to advertise that their Ombuds are confidential. One law firm suggest that a resolution might need to could come through legislation:
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.
The decision was rendered on March 16, 2016 and published this week.  The case citation is LG Bochum 16.03.2016 (II-6 Qs 1/16).  (Juris.de; Juve; TaylorWessing Insights.)

1 comment:

  1. Whew good thing this case is so nuanced. I recall something like this potentially happening here in the US too, if the case hadn't settled. Analogous to the argument that the courts will balance confidentiality as a public policy concern vis a vis the right to have access to evidence otherwise not available. Am I on the right track here? Haven't used this part of my brain much recently.

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