Italy: Access To Counsel And Law Firm Independence

Last Updated: 28 June 2005
Article by Eleonora Ballarino

When in September 2004 many Italian lawyers came back from vacation, they found themselves a little less independent, even though they may not be aware of that. What happened? The managing partner of an important Italian firm, which is advising the governmentappointed administrator in a very highprofile insolvency scandal but will not take any part in pending disputes with a number of banks, has apparently declared to the international press: "We indicated to [the administrator] that, as a result of our relationships with Italian and international banks, we did not wish to act against the banks. [...] Our agreement... was that we would advise on the restructuring plan but not pursue litigation other than against the [compamy] directors or in administrative actions. [...] Firms like ours... do not want to take a position affecting the rights [read "interests" here, as "rights" not being affected anyway] of other clients or potential clients".

Why did he believe it necessary to issue such a statement? The reason may be a worry to dispel the idea that his firm had been excluded from the litigation team rather than having excluded itself; but whatever the purpose of the statement, it remains that Art. 11 of Royal Law Decree no. 1578/1933 (the Italian "Lawyers Law") expressly provides that "No attorney shall refuse his services unless for a legitimate reason".

It has also been argued that such a position may conflict with Art. 10 of the Italian National Bar Council Ethical Rules ("In the practice of law a lawyer has the duty to preserve its independence and to protect its freeedom from external influences and pressures. The lawyer shall not take into account personal interests"), Art. 6 ("A lawyer shall perform its professonal duties with loyalty and integrity"), Art. 7 ("It is a duty for the lawyer to practise loyally [to his client]", Art. 36 ("A lawyer has the duty to protect the interests of the party he advises in the best way possible..."). Be it as it may, it remains that the Italian Bar, similar in that to the English and other European Bars, is legally subject to a "cabrank rule" (see for instance para. 601 of the English Bar Code of Conduct).

Of course, enforcement of such rule is rarely required which may explain why the very awareness of its existence has weakened along the years. Nobody wants to be represented by reluctant counsel, right? Especially in countries where, as in Italy, the explosion in the number of those admitted to practise law makes for dozens of thousand of lawyers craving the opportunity to sue anybody on any ground whatsoever... Yet, a few cases where the rule had to be invoked have always existed.

For instance, until 1997, in Italy, when civil litigation was concerned, one needed to instruct a local attorney to perform some formal tasks in the judicial district concerned. In small provincial courts, where all lawyers were on a firstname basis and the competitive pressure amongst them was very low, it was not necessarily easy to find an attorney available to sue a fellow local lawyer, be it for a mere debt recovery, let alone a malpractice case. Other similar situations occurred at the apogee of the Red Brigades military power, when their militants refused legal representation and threatened the life of counsel who might accept the appointment by the court, an appointment which was necessary to celebrate a valid trial under the Italian criminal procedure. Again, until recently, a relatively benign protective device employed by a number of large companies and banks was that of... establishing conflicts for everybody, making sure that at any time anybody with a name in the market had at least one very minor matter pending upon the company's instruction. As a consequence, the lawyer concerned had to decline instruction against the same company and his duty to be loyal to his services to clients ceased face to a symmetrical duty towards another client.

If some Italian lawyers may be today under the delusion of being unconditionally free to accept or not instruction, the perception that the cabrank rule imposes a significant burden on their freedom to contract, and to handle their practice as they see it best, is largely unfonded. Traditionally, legitimate reasons to refuse nonfrivolous instructions (other than, obviously, the existence of an actual conflict of interest) can be summarised as follows: "i) "I have a personal enmity towards you which would prevent me from performing at my best"; ii) "I am not competent to deal with the matter at hand; iii) "I am currently too busy"; iv) "you do not accept to pay the price and the other terms I demand for this work".

This covers much of the conceivable territory why a lawyer can reasonably wish to refrain from the representation of a given client.

On the other hand, in the case in point, the first reason was clearly inapplicable, given that the administrator was already represented by the firm concerned.

The second reason would be hard to invoke for a firm who publicly claims to be a fullservice business law firm providing seamless global services to Italian and foreign clients and boasts "to enjoy a formidable reputation in a range of practice areas including banking and finance,... litigation and arbitration,... reorganisations".

The third is hardly applicable these days to any large business firm, which is expected to have the critical mass and the shortterm flexibility to accomodate whatever demand for its services it is able to raise. In addition, Italian civil proceedings of this nature are lengthy affairs, dealt mostly in writing, so that it is even theoretically possible to recruit and train the necessary additional resources in time for the actual trial!

As far as "price" is concerned, we are speaking here of the governmentmandated administration of a major public company, who has been reportedly paying without flinching fees in the region of one million Euro per month for the advice of the firm concerned. This makes it hard for the latter to request seriously a price high enough to deter the client who obviously believes to have good reasons to work with them rather than with other lawyers.

Thus comes the candid admission that to sue the banks is out of the question because it would simply not be in the interest of the firm's other current and prospective clients, hence in the firm's own interest. Admittedly, the firm concerned is mostly a "deal factory", and while it claims to have a litigation practice, contentious work is indeed not believed by anybody to be their main area of practice. It is also true that in its stricter sense, the "right to counsel" consecrated by Art. 24 of the Italian Constitution is hardly affected, given the large number of lawyer who would be most happy to represent the administration in the related disputes including for free. Nevertheless, one wonders whether "right to counsel" simply means "right to one counsel, any counsel", and not to a counsel of one's choice, in particular to a provider of legal services which be perceived to have the resources, the advocacy skills, the insurance coverage or any other feature which are deemed to be appropriate to the matter at hand.

This is a very concrete issue, given that further to the recent polarisation of the Italian market, the top tier of the market includes no more than ten or fifteen firms, which are obviously believed by the market to provide some added value in comparison with "ordinary" legal assistance.

In fact, this case exemplifies very well why the cabrank rule is mainly a protection of the independence of lawyers. When a competitor of mine makes it clear to the world that in taking his decision on whom he accepts to sue he is available to take into consideration what prospective clients might think of his lessened popularity with the financial entity involved, this encourages and allows entities such as merchant banks (or insurance companies, for that matter) to "blacklist" law firms, and to dissuade discreetly their clients from instructing them if they want to keep the relationship smooth and make things easier. It does not really matter whether actual pressures or blackmail takes place. The perception of the possibility is enough.

What am I going to tell to one of my clients, or of my partners, if he or she accordingly concludes that any given company requiring financial assistance is better off choosing a lawyer who knows his place in the world, and would not dare to piss off the powersthatbe? Given the darwinian nature of the legal business, the theory of games predicts that those who do not will soon become extinct, at least as players in the market concerned.

There is just but one small step to cross to admit that a lawyer can return a brief when he discovers that his own or his other clients' interest might be adversely affected, as a consequence of his continued representation of a given party. The English rule which makes it an ethical duty for a barrister to provide his services when legally requested is traditionally believed to have originated exactly from such a case, and namely from the refusal of a famous eighteenth century barrister, Thomas Erskine, to drop its defence of a Thomas Paine who had offended the King in a pamphlet. In fact, Erskine thoroughly disapproved of Paine and his writings but he was determined to represent him because he thought it was his duty to do so, and was punished for that by the King, who removed him from the very valuable office that he held of AttorneyGeneral to the Prince of Wales. Henceforth, the Bar inferred his members' very interest in such a duty being considered a disciplinary issue, so that no counsel could be blamed anymore for an "unfortunate choice of clients".

It must also be taken into account that independence is already structurally endangered in markets, such as the Italian markets, where much is determined by one's participation to financialpoliticalindustrialmediaticacademic cartels, so that true independence already carries a price tag even for a lawyer. This may be less important for single, highly specialised professionals, but it is becoming more and more true for practices doing (also) largescale transactional work, such as that pertaining to negotiations, due diligence and corporate finance in major corporate deals. It is therefore of little surprise that one who does not belong to a given tribe may find oneself with a higherthanaverage percentage of foreign clients in these fields, if he is active in them at all (even in times of globalisation, a client is more likely not be bound by tribal rules in foreign jurisdictions, and to focus instead on obtaining the best service at the best price).

Sure, English solicitors do not have a cabrank rule, and are entirely free to select their cases and clients, if they can afford it, as they see it best. As a consequence, most "magic circle" firms makes it a policy not to participate in proceedings against certain defendants, in the defence of clients sued by the latter, or for that matter to be involved in any unpopular or politicallysensitive matter, especially on the "wrong" side; so that one of their partners might not think much of the issues discussed herein. In fact, the only magic circle firm who has a strong focus on contentious work on the "industrialcorporate" (as opposed to the financialbanking) side of the world has been perceived to pay a price for that exceeding the mere increased likeliness of conflicts, and according to the specialised press the issue has been for years a subject of debate amongst its partners.

I strongly suspect however that the peculiar position of English firms has much to do with the existence of a split legal profession, where solicitors have been for a long time allowed to be in private employment, to work in true partnerships, to pick their clients, etc, but a critical part of contentious work which is the most delicate issue, given that in most countries lawyers have an exclusivity on its performance was dealt with by other lawyers governed by a different, and sometimes opposite, set of rules.

An obliteration of the cabrank rule is therefore likely to lead to a market scenario closer to that of the United States than to that of the United Kingdom, where the lawyers are much more closely identified with their (typical) clients interests and positions. The American experience shows that this works at multiple level, which vastly exceed the scope of topnotch business work or, for instance, the traditional reluctance of many Italian criminal law specialists to represent victims of alleged crimes, as this bring them to support the defendant's prosecution and possibly to argue for the limitations of his rights.

In such a system, not only is a lawyer more exposed to environmental pressures, but he ends up having as well to "take sides" along social and ideological lines. In particular, a lawyer is expected to "choose" whether he is an "establishment lawyer", a "plaintiff lawyer", a "drug lawyer", a "consumer lawyer", a "women lawyer", a "husband lawyer", a "union lawyer" and so forth.

The related loss of independence takes place not only with respect to single powerful entities and cartels thereof; but also face to the public opinion and what the "political correctness" of the time (or of the lawyer personal environment) dictates, as Alan Dershovitz had the opportunity to realise when he accepted the defence of Mr. von Bülow. In this contexts, to accept the defence of a polluter or rapist, a money launderer or a war criminal, may still be statement in favour of the right to counsel, but as notes Richard Posner, it carries in average a heavier stigma than it does in Europe. And for sure the decision to represent an alleged communist during the McCarthy era was very likely to be interpreted by all parties concerned, lawyer included, as some kind of endorsement of his or her politics. This is partially compensated by the highly pluralistic nature of the American society and by the the sheer size and competitiveness of the local market, but some features which many European lawyers might consider distorsive inevitably emerge nevertheless. One is for instance a further reduction of the options opened to a given party: if I am indicted for drug trafficking, I am supposed to go to see a drug lawyer, as nobody else would touch me. In turn, if my lawyer is known to be a drug lawyer, there is a reasonable expectation by anybody in the know that I am actually a drug trafficker. Even admitting that trial by a jury of laymen may mitigate this problem in the United States, such mitigation does not exist at all in continental Europe, and is not applicable anymore to English business disputes. In addition, given that a drug lawyer is likely to be sought mostly by organised crime dealing with drugs, he is all the more likely to end up in the dubious position of a fulltime, house consigliere of criminal organisations.

In the most famous novel of Italian literature, Manzoni's The Betrothed, the peasant whose wedding is hindered by a 1600s signore is sent to see a famous lawyer called Azzeccagarbugli ("Quibblefinder"). After a lengthy discussion of the matter, Renzo, the peasant, is dismissed so quickly when the lawyer learns of the identity of the other party, that he realises what was happening only when he is given back the two capons he has brough along as a "retainer".

It has taken a while since to understand that the lawyer's legal freedom to choose his clients out of whims or discrimination or personal interest amounts to a a loss of his practical freedom to accept instruction in whatever matter he is competent to take; and namely a loss of his (at least relative) freedom from the blame and blackmail possibly related to the acceptance of the specific brief concerned. But and the end of this process, the English and continental gentlemen instructing Sir Edward Marshall Hall or Francesco Carnelutti to look after their business in court had no reason to feel tainted by the highly controversial criminal matters both were dealing with, or to fear that their briefs could be selectioned depending on the relative importance of the party to be sued.

American judges swear that in the performance of their duties they will "not know of any person". Continental lawyers had better remember, in their own interest, their analogous obligation.

Eleonora Ballarino is an Italian litigator, and a partner of the Company Commercial Law Dept. of Studio Legale Sutti in Rome and Milan.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.