The Constitutional Court Decision on Legal Professional Privilege

The Constitutional Court issued a decision on 18 January 2024 (“Decision”) in response to the annulment lawsuit filed against multiple statutory provisions for inconsistency with the Constitution.

The Decision assessed the annulment requests within the framework of the amendments made to various laws and presented the Constitutional Court's comprehensive analysis on legal professional privilege, which has long been a subject of debate both in Türkiye and on a global scale.

The Decision addresses the issue of legal professional privilege imposed on independent attorneys deriving from the reporting obligation imposed under Türkiye’s Anti-Money Laundering Law for matters apart from their professional activities related to litigation and alternative dispute resolution processes.

The issue of which documents and communication that are considered evidence can benefit from legal professional privilege within the scope of the Turkish Competition Authority's inspection is frequently assessed within both the Turkish Competition Board’s decisions and administrative courts’ precedents, leading to numerous legal debates. Similar issues have also been on the European Union’s agenda. Pursuant to the CJEU’s Orde van Vlaamse Balies (Case C-694/20) decision rendered in December 2022, it was established that legal professional privilege is not limited to the right to defense and should also be considered within the scope of the right to privacy, encompassing all legal opinions provided by attorneys to their clients regardless of their relevance for an existing proceeding. Furthermore, interpretations in favor of expanding the boundaries of legal professional privilege have emerged and a similar approach adopted by the Constitutional Court could be seen as potentially altering practice in Türkiye.

1. The Main Legal Issue Addressed in the Decision

The amendment to the Anti-Money Laundering Law stipulates that independent attorneys are considered "obligated parties" in terms of reporting certain transactions such as real estate sales, the establishment of companies, foundations, and associations, and the management of assets in bank accounts. Such reporting obligation does not apply to information obtained through professional activities such as legal opinions and representing clients in court and alternative dispute resolution processes. In other words, as per the amendment to the Anti-Money Laundering Law, independent attorneys are obligated to report if they encounter a situation that raises suspicion or involves illegal activity.

In the annulment application to the Constitutional Court, it was argued that:

(i) the aforementioned reporting obligation is in clear conflict with the attorneys’ confidentiality obligation, and

(ii) legal professional privilege should be considered within the scope of the right to privacy, and the right was excessively restricted beyond the principle of proportionality.

2. Evaluations and the Significance of the Decision

The Decision states that the secrecy of any information exchanged between an attorney and its client is considered subject to a strengthened protection under attorney-client confidentiality regardless of its ultimate purpose. The Constitutional Court highlighted that the relationship between attorneys and their clients is inherently built on confidentiality and trust, and the continuation of such relationship and the proper fulfillment of the fundamental function of the legal profession relies on the attorney’s ability to guarantee the confidentiality of any information shared throughout the relationship. Therefore, the reporting obligation set forth under the amendment to the Anti-Money Laundering Law was found to potentially restrict an attorney’s ability to provide such guarantee, which could result in the inability to establish the necessary confidentiality and trust-based relationship with clients.

The Constitutional Court concluded that the relevant provision under the Anti-Money Laundering Law should be annulled as it imposes an improper burden on independent attorneys. The Constitutional Court stated that the attorney-client confidentiality infringed by this rule entails a restriction that is not proportionate to the right to respect for private life and is not in line with the requirements of a democratic society.

However, the dissenting opinions emphasize that information obtained through activities such as providing legal advice, representing and defending rights in court, and conducting professional work within the scope of alternative dispute resolution processes has been excluded from the attorney’s obligation to report suspicious transactions. Thus, confidentiality regarding the information obtained from matters directly related to the right of defense have already been preserved.

The Constitutional Court explicitly states that “enhanced protection should be provided for legal professional privilege regardless of the ultimate purpose of communication and information exchange between an attorney and a client” and emphasizes that professional secrets and information obtained "during the practice of the legal profession" are subject to privileged protection in the context of the right to privacy. The Constitutional Court indicated that the Constitution envisages a broad protection for all activities related to the “practice of the legal profession” contrary to the narrow interpretation often reiterated in the Turkish Competition Board’s decisional practice, which limits attorney-client confidentiality solely to the right to defense.

In the future, it may be possible to consider a more comprehensive protection of legal professional privilege in terms of both judicial administration and Competition Authority practices.

Finally, it should be stated that the reporting obligation suggested for attorneys under the latest amendments to the Anti-Money Laundering Law derives from the recommendations of the Financial Action Task Force (“FATF”) provided for Türkiye. Therefore, in the upcoming months, the Constitutional Court’s decision will expectedly be subject to further debates on how it will be reflected within FATF’s Turkey Follow-Up Reports and how the legislator will ensure full compliance with FATF’s recommendations.