The Grand Chamber of the European Court of Justice has recognized a right to silence for natural persons during investigations relating to conduct punishable by sanctions of a criminal nature in a decision with broad implications.1
On 2 February 2021, the European Court of Justice ("ECJ") delivered a landmark ruling on due process rights in preliminary reference from the Italian Constitutional Court in DB v Commissione Nazionale per le Società e la Borsa (Consob) (Case C-481/19). The case concerns penalties imposed on a natural person ("DB") for insider dealing and for failure to cooperate in the context of an administrative investigation.
For the first time, the ECJ recognizes that the EU Charter of Fundamental Rights (the "Charter")2 provides for a right to remain silent for natural persons. In the case at hand, the Court finds that this right precludes the imposition of penalties on natural persons who refuse to provide potentially self-incriminating answers to investigating authorities under EU Directive No 2003/63 and EU Regulation No. 596/2014.4 The case concerns insider trading in the securities context, but it is clear from the ECJ judgment that the right to silence under the Charter applies more broadly and is available to natural persons in any proceedings potentially leading to sanctions of a criminal nature.
Background
On 2 May 2012, the Commissione Nazionale per le Società e la Borsa (Consob) (Italian Securities Exchange Commission) imposed on DB (a natural person) penalties for insider dealing as well as for failure to cooperate due to his refusal to answer questions during a hearing. His appeal against the penalties was dismissed and he subsequently appealed to the Corte suprema di cassazione (Supreme Court of Cassation of Italy).
On 16 February 2018, the Supreme Court of Cassation referred a question of constitutionality to the Corte constituzionale (Constitutional Court of Italy) regarding the provision of Italian law that served as the basis for the penalty for failure to cooperate. After having found that such provision was derived from Directive No. 2003/6,5 since replaced by EU Regulation No. 596/2014,6 the Italian Constitutional Court lodged a request for a preliminary ruling from the ECJ on 21 June 2019.
The request to the ECJ sought to clarify whether the relevant provisions in Directive No. 2003/6 and Regulation No. 596/2014 permitted Member States not to impose sanctions of a criminal nature on natural persons who refuse to answer potentially self-incriminating questions during an investigation. The ECJ was in particular invited to rule on whether Articles 47 and 48 of the Charter, guaranteeing the right to a fair trial,7 included the right to silence.
The ECJ Judgment
The ECJ firstly restated that Articles 47 and 48 of the Charter are equivalent to Article 6 of the European Convention on Human Rights ("ECHR") providing for a right to a fair trial.8 The ECJ noted that while Article 6 ECHR does not refer to the right to silence, the latter is "a generally recognised international standard which lies at the heart of the notion of a fair trial" (§38), and has long been recognized under the case law of the European Court of Human Rights ("ECtHR").9 As the ECJ noted, that right to remain silent contributes to avoiding miscarriages of justice and to securing the aims of Article 6 ECHR, namely a fair trial. Given that the rights set forth in the Charter shall have the same meaning as the rights set forth in the ECHR,10 the ECJ found that Article 47 and 48 of the Charter must be construed as including a right to silence for natural persons.
In the judgment, the Court made a number of interesting and important findings regarding the scope of the right to silence.
First, the ECJ held that the right to silence is infringed where a person is forced to testify under threat of criminal sanctions and their testimony is either obtained as a consequence, or they are sanctioned due to their refusal (§39). However, the ECJ added that this right does not justify every failure to cooperate, such as refusals to appear at a hearing or the use of delaying tactics (§41).
Second, the Court construed the scope of the right to remain silent broadly. The ECJ held that the right to silence cannot be confined to statements of admission of wrongdoing or to remarks which directly incriminate the person questioned. The ECJ held that the right to silence also covers information on questions of fact which may subsequently be used in support of the prosecution and may thus have a bearing on the conviction or the penalty imposed on that person (§40).
Third, the ECJ noted that the right to silence applies in proceedings that may result in administrative sanctions of a criminal nature (§42). In the case at hand, the ECJ held that this was something for the national court to determine, although the Court noted that certain sanctions applied by the Italian Consob had already been found to be criminal in nature. Importantly, the ECJ added that should the penalties be found not to be criminal in nature, the right to silence could still apply where the information obtained in the context of the procedure could ultimately be used in criminal proceedings against the accused (§44).
Fourth, it flows from the judgment that the right to silence is only available to natural persons and not to legal persons. As pointed out by Advocate General Pikamäe in his opinion,11 the ECtHR had only ruled on cases involving the right to remain silent of natural persons. Interestingly, in the judgment, the Court sought to distinguish the present case from EU case law, under EU competition rules, dealing with protection against self-incrimination for legal persons. That case law provides that a legal person cannot be compelled to provide "answers" that might involve admitting an unlawful anti-competitive conduct, but can be compelled to provide information on facts and documents even if they are used to establish anticompetitive conduct.12 The ECJ judgment makes clear that the narrower protection afforded to legal persons under that case law cannot be applied by analogy when determining the scope of the right to silence of natural persons (§48).
Commentary
This groundbreaking judgment is a welcome confirmation that EU fundamental rights align with "international standards", i.e., not only with the ECHR but more broadly.
For example, the US Constitution's 5th Amendment provides persons (and sole proprietorships) with a right against self-incrimination.13 Over the course of 200 years, substantial litigation has occurred over the scope of that right, which has defined, refined, and redefined its contours. Similarly to the Court's finding in DB, the heart of the protection in the US is against compelling self-incrimination through adversarial proceedings where statements can result in criminal sanctions. In addition, again similarly to the ECJ judgment, the right does not excuse appearing for proceedings or delaying same. Also noteworthy in the US, there is a limited right to refuse to produce documents where such act of production is testimonial in nature (e.g., where possession is itself incriminating).
In the EU, while the ECJ's judgment on its face covers insider dealing only, the implications will be of course wider and, by extension, natural persons should be able to avail of that right in other types of proceedings where sanctions of a criminal nature may be imposed upon them. Further, it is clear from the judgment that this right must be respected by the EU institutions as well as European Member States implementing EU law. It should be applicable to all criminal proceedings that originate from EU legislation (financial regulations, environmental regulations, money laundering, etc.).
Finally, in the area of national competition law in the EU, the judgment raises interesting questions in relation to the exercise of rights of defense in national proceedings in which sanctions can be applied to both individuals and corporations. Where individuals refuse to cooperate by invoking the right to silence, the judgment implies that the authorities should refrain from imposing sanctions for non-cooperation on the individuals, but it logically flows that no sanction should be imposed on the company either.
1 Judgment of 2 February 2021, DB v Commissione Nazionale per le Società e la Borsa (Consob), C-481/19, ECLI:EU:C:2021:84.
2 The Charter of Fundamental Rights of the European Union sets out the fundamental rights of everyone living in the European Union (EU). It is addressed to the EU institutions and EU Member States when they apply EU law and became legally binding when the Treaty of Lisbon entered into force in December 2009.
3 Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse). This Directive is no longer in force.
4 Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6 and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.
5 Article 14(3) of Directive No 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse).
6 Article 30(1)(b) of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation).
7 Article 47 provides for the right to an effective remedy and to a fair trial, while Article 48 provides for the respect of the presumption of innocence and the rights of defense.
8 The ECHR is an international convention to protect human rights and political freedoms in Europe, which entered into force on 3 September 1953. It applies to 47 countries across Europe.
9 ECHR, 8 February 1996, John Murray v. the United Kingdom, CE:ECHR:1996:0208JUD001873191, paragraph 45.
10 While the ECHR is not applicable to the European Union itself, Article 52 of the Charter provides that the rights proclaimed in the Charter shall have the same meaning and scope as the rights proclaimed in the ECHR.
11 The opinion of Advocate General Pikamäe in DB v Commissione Nazionale per le Società e la Borsa (Consob) of 27 October 2020, paragraph 97.
12 Ibid. points 46 and 47, in reference to judgment of 18 October 1989, Orkem v Commission, 374/87, EU:C:1989:387, paragraphs 34 and 35. That case law was recently reiterated in the Court's judgment of 28 January 2021, Qualcomm Inc, Qualcomm Europe Inc v European Commission, Case C-466/19 P, ECLI:EU:C:2021:76 (see for example, para. 143 and 147).
13 In the United States, the right to remain silent is part of the US Bill of Rights, amendments to the US Constitution, and perhaps one of the most famous constitutional rights due to Miranda warnings shown thousands of times on television and in movies. See US Constitution, Amendment V ("[N]or shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law . . .") (emphasis added); Escobedo v. Illinois, 378 US 478, 485, 491 (1964); Miranda v. Arizona, 384 US 436, 444 (1966).
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