In an interview, the legal scholar speaks about the convicted lawyer Hanno Berger.
(Photo: Private)
Cologne Lucia Sommerer is a German-American legal scholar with a research focus on the interface of criminal law, criminology, future technologies and white-collar crime. She studied law in Munich, Göttingen, Oxford and Yale.
She is currently researching organized white-collar crime in connection with tax havens (Pandora Papers) and cryptocurrencies at the Martin Luther University Halle-Wittenberg.
Sommerer has dealt extensively with the question of when legal advisors become involved in their clients’ crimes, particularly in connection with the Cum-Ex scandal. With this form of tax evasion, banks and investors have had capital gains tax “reimbursed” in billions by trading in shares, which has not been paid. They were advised by well-known law firms such as Freshfields Bruckhaus Deringer. Your former global tax chief Ulf Johannemann is on trial from September.
>> Read here: Former Freshfields star attorney to stand trial in September
Ms. Sommerer, according to the Federal Court of Justice, bankers who were involved in cum-ex transactions are liable to prosecution. Do lawyers who have advised on this also have to worry?
Yes. There is no special right for lawyers. The view of the predecessor of the Federal Court of Justice – the Reichsgericht – at the beginning of the 20th century that a legal opinion of a lawyer “of course” should not be regarded as a criminal offense is no longer valid today. Whether a lawyer has made himself or herself liable to prosecution by giving false legal advice or – as is the case with Cum-Ex – by providing a courtesy opinion is today judged according to the general rules of criminal law.
The Bonn Regional Court recently sentenced former star lawyer Hanno Berger to eight years in prison. You have observed the case: How can this extraordinarily high sentence be explained for a lawyer?
Hanno Berger is a special case. Unlike the majority of other lawyers involved in Cum-Ex, he is not regarded as a mere assistant under criminal law, but as an accomplice in tax evasion. Hanno Berger’s actions and behavior were not limited to typical legal, legal advisory activities. Rather, his behavior went far beyond the usual legal advice.
What are you up to?
Berger is considered the initiator and father of the cum-ex business, he established the contacts among the other parties involved and was involved in the profit of the business to an unusually high degree for a mere legal advisor with up to 35 percent. All of this leads to his complicity and heavy sentence. A similarly high sentence is not to be expected from other lawyers involved in Cum-Ex – provided they have limited themselves to the preparation of false reports and are only accused of being assistants.
Berger was a special case, but not an exception. An ex-tax partner of the Freshfields Bruckhaus Deringer law firm will soon have to answer to the Frankfurt Regional Court for complicity or aiding and abetting tax evasion. He has written opinions for Maple Bank, which has been involved in cum-ex deals. When do appraisers become vulnerable?
It depends decisively on the extent to which the lawyers can be proven that they either positively knew the criminal intentions of their clients – in this case the Maple banker – or at least thought it possible and that concrete indications make the behavior of the clients appear predominantly likely to be punishable. In the case of the cum-ex transactions, there is some evidence that the lawyers should have been clear that the only reason for the profitability and thus the execution of the cum-ex transactions by the clients could only be an unjustified tax refund.
What else is relevant in criminal proceedings against lawyers?
It could also be seen as an indication of knowledge of the criminal purposes of the business if the lawyers, in the sense of a courtesy report, omitted important factual elements such as agreements on the purchase and sale of shares in their statement. Even if they described false trading goals – the talk was often vague of “exploiting market inefficiencies” – but they knew the whole facts or the economic sense of the business.
Numerous other lawyers are on the accused lists of the public prosecutor’s office. How great is the damage that Cum-Ex advice has caused to the legal profession in general?
Lawyers are rarely the focus of the courts. The damage to the reputation of the law firms involved and the industry should not be underestimated. At the same time, this is an opportunity for the legal profession. There may be reason to expand a compliance management system and compliance infrastructure in the law firm. Freshfields implemented this back in 2020 in the form of a new code of ethics and conduct, a whistleblowing facility and an ethics council.
Compliance is an issue on which all major law firms advise clients, but on which they are lagging behind in their own organisation. The decisive factor here is whether the new compliance measures are really put into practice in a law firm on a day-to-day basis and not just exist on paper for PR purposes. Only then can incorrect advice in the supposed gray area, such as with Cum-Ex, be prevented at an early stage.
Isn’t the image of the lawyer as an “organ of the administration of justice” now outdated?
It is as much or as little obsolete today as it was from the beginning. Because the tension between profit interests and the administration of justice is nothing new. In the cum-ex scandal, this conflict is only particularly visible.
Ms. Sommerer, thank you very much for the interview.
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