21 May 2020

Freshfields sets up German ethics committee in response to cum-ex scandal

Freshfields' Munich office

Freshfields' Munich office: the new measures apply to the firm's extensive network of German offices

Magic circle firm appoints former federal court judge to lead committee and publishes ethics code

Freshfields Bruckhaus Deringer has set up an ethics committee for its German arm headed by a ex-judge, four months after a former partner was charged with alleged fraud in connection with the cum-ex scandal.

The UK firm has also published a code of ethical principles and rules of conduct in moves it said were ‘demonstrating its commitment to the ethical practice of law, which has recently become a focus of attention in connection with the cum-ex trades’.

In January, former global head of tax Dr Ulf Johannemann was charged with fraud over his alleged involvement advising the now-defunct Maple Bank on the legality of cum-ex transactions, which allowed investors to reclaim tax they never paid.

The committee is headed by Professor Dr Udo Di Fabio, a former judge of Germany’s Federal Constitutional Court, and also includes partners Dr Barbara Keil and Dr Michael Josenhans, and of counsel Dr Christoph von Bülow.

In a statement, the firm said the committee would ‘advise leaders of the firm in Germany in connection with ethical questions that may arise in client work’ and assist in the ‘application, enforcement and updating’ of the rules. 

‘Any lawyers and employees of Freshfields may refer a matter to the ethics committee, including anonymously,’ said the firm, which added that the code would be incorporated into its training programmes.

Professor Dr Di Fabio said: “By laying down its values in such a code of conduct and seeking independent, external advice on its application, Freshfields as a major commercial law firm is breaking new ground.”

Dr Helmut Bergmann, regional managing partner for Continental Europe, added: “The publication of our ethical rules and the establishment of our ethics committee are intended to make clear what we stand for when providing legal advice.”

Dr Johannemann was charged in January along with six former employees of Maple Bank with causing tax losses for the German state of more than €380m euros, according to The Financial Times.

He resigned from Freshfields shortly before he was arrested last November. 

Last August, Freshfields reached a €50m settlement agreement with the Maple Bank's liquidator.

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