Special Topics in Professional Regulation: The Regulatory Role of Competition Law; The Inadvertent Disclosure Of Litigation Risk; The Role of Professional Privilege in Government Representations; and Data Protection and Attorney-Client Privilege

Special Topics in Professional Regulation: The Regulatory Role of Competition Law; The Inadvertent Disclosure Of Litigation Risk; And The Role of Professional Privilege in Government Representations (Program)

Andy Chen, Department of Financial and Economic Law, Chung Yuan Christian University (Taiwan); Elizabeth Tippett, University of Oregon School of Law (US) (Moderator); Dror Arad-Ayalon, Arad-Ayalon & Nachmany Law Office (Israel); and Sven Kohlmeier, Law Firm Kohlmeier/Kanzlei Kohlmeier (Germany) 

Special Topics in Professional Regulation: The Regulatory Role of Competition Law; The Inadvertent Disclosure Of Litigation Risk; The Role of Professional Privilege in Government Representations; and Data Protection and Attorney-Client Privilege


Andy Chen: Legal Ethics and the Regulation of Information-Asymmetry Problem in Competition Law: An Economic and Transformative Perspective

Using the experience from Taiwan, we examine the issue concerning the potential conflicts between legal ethics and competition law in this paper. We argue for a more prominent role for competition law in controlling the market-failure problem regularly thought to be only remediable by self-regulations. We begin with a theoretical analysis of the justifications for exempting legal ethics from competition review. The purpose is to show that both economic (e.g. externalities from free-riding behavior) and non-economic (e.g. protecting professional independence) rationales for exemption could all be understood as responses to the information-asymmetry phenomenon prevalent in the market for legal services. Hence, an economics-centered analytical framework is preferable for coherent policy making. We demonstrate further that competition law provides a transformative function that is frequently neglected in the literature supporting exemption. Proponents of exemption usually treat legal services as a preordained “credence good” whose quality could not be ascertained even after they are provided. By contrast, we argued that a well-implemented competition law could turn legal services into an “experienced good” or even “search good” through information competition among service providers.

This paper is structured as follows. Part I and II introduce the current legal ethics requirements and their potential conflicts with the competition law in Taiwan. Part III describes how conventional justifications for exempting legal ethics from competition review can be streamlined into an economics-centered analytical framework. Part IV uses the framework to establish the transformative function that competition law could provide to control information-asymmetry problem. We illustrate our view by re-examining the representative cases decided by the Taiwan Fair Trade Commission in Part V and conclude the paper with certain policy suggestions in Part VI.

Elizabeth Tippett: Do Attorneys Inadvertently Broadcast their Risk Assessments through Contract Provisions?

This preliminary study examines whether lawyers inadvertently broadcast their internal assessment of a client’s litigation risk by including certain provisions in their form contracts.  To answer this question, I estimate the litigation risk of a sample of companies and then identify provisions of their form contracts statistically associated with those risk scores.  I find that the presence of certain contract provisions intended to mitigate a particular litigation risk do a reasonably good job of sorting companies into “higher risk” and “lower risk” buckets.  I then discuss whether government agencies could or should use this types of information in targeting companies for enforcement, and the implications for attorney decision-making. 

Dror Arad-Ayalon: Have Internal Counsel of Public Institutions Become Completely Institutionalized? On Loyalty and Privilege in Public Institutions by Dror Arad-Ayalon

It is obvious to all that for the purposes of receipt of advice and legal representation by a governmental institution, there is a real need and justification for attorney-client confidentiality and privilege. The question is, whether such confidentially and privilege prevail over the public interest in law enforcement authorities seeking truth and justice? Renewed thought is necessary as to the degree of protection of professional confidentiality afforded in terms of relations between governmental bodies operating on behalf of the general public, and their in-house legal counsels, who are also acting as public servants, especially in light of the general expectation of truthful disclosure and transparency of governance. The principal duty of trust and loyalty of a governmental institution and consequently also of its in-house legal counsel, is owed to the general public (or to the public interest). Therefore, in a case of an overruling public interest (as in the case of a criminal or disciplinary investigation in an important case), the protection of professional confidentiality and privilege might have to be withdrawn or weakened.  Thus, so it is argued, the privilege enjoyed by in-house counsel of a public institution does not have to be absolute (as in the case of "private" professional privilege) but rather relative. According to this contention, in-house counsel trust and fidelity prevailing in a governmental institutions are not "personal" and therefore the governmental institution does not "own" the privilege and its consent is not required in order to waive it. On the other hand, it is argued that if the protection were to be adversely impacted and there were to be a weakening of the professional privilege, i.e. the in-house counsel of governmental institution is completely "institutionalized", alternative solutions would be sought by those occupying positions in governmental institutions, and they would prefer to engage an external counsel and sometimes personally and privately. Such a decentralization effect is likely to adversely impact the propriety of the administration of the governmental body, because instead of promoting its institutional interest in being assisted by in-house legal counsel who is committed to the organization interests and values, it actually might be challenged by private counsel assisting and driving those occupying positions to protect their own personal and private interests. 

Sven Kohlmeier: Quo Vadis Attorney-Client Privilege? Missing Data Protection in Law Firms and Government Surveillance

The Attorney-client privilege is one of the most important value for lawyers. Lawyers secrecy is the brand's essence of lawyers business. The client knows that the lawyer will disclose neither the clients name nor the content of the case to someone else without client’s consent. Attorney at Law and certified specialist on IT-Law Sven Kohlmeier explains that missing data protection in law firms endangers the attorney-client privilege. And he gives an overview of the jurisdiction of Germany's highest court, the Federal Constitutional Court, which judges again and again to protect citizens rights and the lawyers secrecy against government surveillance. 

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