This is a well-known pitfall for asset recovery practitioners: discovery orders are not available in civil law jurisdictions. Instead, victims of fraud usually request the opening of criminal proceedings in order to benefit from broad freezing and disclosure orders. Using criminal proceedings in support of civil claims is however not without risk as the public interest for the prosecution of crimes trumps, to a certain extent, over the private interests of civil plaintiffs.
Swiss law provides for a few pre-trial discovery tools outside of criminal proceedings, among which are 1) the precautionary taking of evidence in support of contemplated civil proceedings; 2) the right to information based on the Federal Act on Data Protection ADP; 3) the right to consult the bankruptcy file, in cases of criminal mismanagement.
- The precautionary taking of evidence, the “Swiss § 1782”?
One should not overlook a tool offered by the Swiss Code of Civil Procedure to potential plaintiffs. It provides for the possibility of taking evidence located in Switzerland at any time if the applicant shows likelihood that the evidence is at risk or that it has a legitimate interest to obtain the requested evidence. The Swiss Federal Court ruled that a legitimate interest is sufficiently demonstrated if the applicant wants to appraise the chances of success of a contemplated legal action.
Precautionary taking of evidence is even granted if the trial will occur outside of Switzerland. It can be applied for the taking of oral testimony, production of physical records, in situ evidence taking, expertise, written statements from officials and statements and examinations of the parties.
The proceedings are conducted inter-partes. The parties can request to the court to take appropriate intermediary measures (e.g. a prohibition to use certain information outside of the contemplated proceedings) where there exist legitimate interests of any parties or third parties to protect, such as business secrets.
This domestic tool is an interesting alternative route to requesting international judicial assistance. The Swiss 1782 can be faster and the rights of the civil plaintiff are broader than under a request for judicial assistance. However, the grounds for refusing the taking of evidence are much more limited in the context of the execution of a request for judicial assistance than in the independent Swiss 1782.
- The rules on data protection
In a matter Democratic Republic of Congo v. Federal Prosecution Office of Switzerland FPO on the plundering of gold mines, the Federal Administrative Court had to decide on the right of the DRC to access to the criminal file of criminal proceedings that were already terminated and in which the DRC had not participated. For this reason, the DRC requested access to the file on the basis of the ADP, instead of invoking the Swiss Code of Criminal procedure. The DRC argued that it needed the documents contained in the criminal file because it intended to institute civil legal actions against the gold refinery company investigated by the FPO.
ADP allows the applicant to obtain “data”, not evidence or documents. Where personal data of the applicant is concerned, documents can in principle be obtained. The general prohibition of abuse of right applies and a few exceptions apply. If the applicant seeks information that it could not obtain in pending proceedings, then it abuses of its rights and access to personal data is denied. In a landmark decision, the Swiss Federal Court already ruled that the holder of a bank account can access all its personal data, including the notes and reports of its relationship manager, as well as KYC and profiles, even if the purpose is to assess the chances of success of a civil action against that bank.
In RDC v. FPO, the Court concluded that in principle, the DRC is entitled to access to its own personal data for the purpose of contemplated civil proceedings against the gold refinery as it would also have the right to obtain this information during the evidentiary stage of pending civil proceedings.
However, by requesting the entire criminal file, the DRC also requested access to sensitive personal data of third parties, namely the gold refinery under investigation. Access to this data is subject to article 19 ADP. To access this data, the DRC should have however demonstrated that the gold refinery refused to give access to its personal data in abuse of its rights. Where criminal charges or convictions are concerned, the threshold is very high and the holder of the personal data has to carefully examine if a public or a private interest justifies consultation by the applicant. Arguing, as the DRC did, that the personal data of a third party is sought for the purpose of a civil action against that third party is clearly not sufficient. The reason is that ADP does not aim to facilitate civil proceedings but to protect privacy.
In short, accessing a criminal file through ADP is a difficult path. This being said, the Federal Administrative Court left the issue open of a general right to access to terminated criminal cases by persons with an interest worthy of protection on the basis of the fundamental right to be heard (due process). The case still has to be decided by the FPO in this light.
- The discrete but powerful right to consult bankruptcy files
Pursuant to article 8a of the Debt Collection and Bankruptcy Act, any person able to show a prima facie interest may consult the records and the registers held by the debt collection and bankruptcy offices. Accordingly, creditors are almost automatically granted access. Case law also generally grants generous access to the shareholders.
In a decision of May 2018, the Court of Justice of Geneva ruled that a debtor (also accused of mismanagement in criminal proceedings) against which a tort liability claim was admitted in the bankruptcy has a legitimate interest to access to the file of the bankruptcy. The scope of the right of consultation was however limited to evidence supporting the allegations of criminal mismanagement and enabling the debtor to challenge the legal standing of the creditors in the criminal proceedings. Concretely, the access to the bankruptcy file allowed the debtor to prepare its criminal defense and to anticipate its strategy, as the bankruptcy file had not been produced in the criminal file at the early stage of the criminal proceedings.
In the light of this decision, asset recovery practitioners should cautiously select the evidence they produce in bankruptcy cases if they want to avoid to suffer the delaying tactics of the fraudsters they pursue, for instance by enabling the latter to challenge the plaintiff’s status and rights.
Antonia Mottironi
Monfrini Bitton Klein