Friday, May 24, 2013

Lagarde Is Named as a "Témoin assisté"

Ah, French law. How to explain what un témoin assisté is, and why the director of the IMF is one as of today? In the old days, a "person of interest" in a criminal case could either be a "witness" (témoin) or "indicted" (inculpé). In 1987, however, the law was changed: one was no longer indicted but rather "mis en examen," that is, placed under official investigation. Short of that, but somewhere this side of exonerated, was created the new status of témoin assisté, no longer a simple witness but not exactly an accused. Presumably this was meant to preserve the "presumption of innocence," thought to be somewhat compromised by indictment or its more modern counterpart, which suggests at least a preliminary belief in the person's involvement in the commission of some crime.

The témoin assisté has certain rights, including the right to have an attorney examine the case files and appear with the witness, to insist on confrontation with accusers, and so on.

To a simple-minded Anglo-Saxon, it all seems rather a muddle, and for now it probably won't affect Lagarde's IMF position. The Fund has declared its confidence in her and knew about the allegations when it hired her. But it also declared its confidence in DSK before dumping him--not that the cases are in any way comparable.

I suspect that Lagarde, as a veteran litigator in the US, will plead that the use of a panel of private arbitrators to settle a complex lawsuit involving teams of corporate lawyers on both sides was a perfectly reasonable way to proceed and far more likely to be fair and efficient than a jury trial. How was she to know that there would be reason to doubt the neutrality of the arbitrators? Or whatever.

There will be so much smoke blown here and there before this case is over that I doubt anyone will know what happened in the end. And who really cares whether the bankers diddled Tapie or Tapie the bankers? The state should have gotten more out of the deal, but in the grand scheme of things, it's a pittance. Anyone who can say what Justice is in this case has more patience than I have. But resonant words will be spoken, no doubt, and grand claims advanced, and in the end there will be a settlement, and perhaps someone will go to jail. But I doubt it will be Christine Lagarde.


Anonymous said...

"Lagarde,… will plead that the use of a panel of private arbitrators to settle a complex lawsuit involving teams of corporate lawyers on both sides was a perfectly reasonable way to proceed" -> Yes, she already did.

Her own advocate says that with the information we have today, she wouldn't necessarily have made that choice :

What are the new pieces of information? Not many ones, the affair was old and the Cour de Cassation had issued a very detailed judgment (against Tapie's requests). The main new piece of information if the outcome of the panel or arbitrators.

The (legal) attacks against Ms Lagarde should not be based on her choice of a private panel, if she had this option.

There are two kinds of attacks:

a) As a general legal principle (in France), "l'Etat ne compromet pas" (it's perhaps not the right expression) -> the State cannot be subject to a judgement by private arbitrators. Ms Lagarde might answer that the CDR (the State owned "bad bank" led by Mr Rocchi until April 2013, was not the State. But, as she took the decision (not Mr Rocchi), the judges can appreciate that CDR was just an auxiliary structure of the State, and the CDR money was, in all cases, State and taxpayers money.

b) Apart from the decision to request a private panel, Lagarde is suspected to have taken additional (and unnecessary) decisions in favour of Tapie, including a modification in the text of the agreement. She should also contest either the "pro-Tapie" consequences of the decisions, or the fact that the decisions were her own.

The Tapie case (around the sale and re-sale of his Adidas stocks) is indeed quite complicated, and I would not grant that he was not entitled to any additional payment from CDR. I think that anyway, all the computations of this amount ware made in his favour (as shown by the report of Cour de Cassation). But it's my personal understanding.

Two signs let many people think that the trial was crooked: first, the amount of the "préjudice moral" (coming in addition of the amounts of the Adidas sale itself), 45 millions of €, are probably an all-time record in French history, yet it's hard to understand what kind of "préjudice moral" Mr and Ms Tapie suffered of — and if any, it should not entitle to much more that an "euro symbolique". And that came in addition to hundreds of millions of cash (once all taxes paid): what for?

Second, as soon as paid, Mr Tapie moved around hundreds of millions euros outside France, to Belgium,568577.php : once again, what for?

FrédéricLN said...

(oops Anonymous, has a name)

FrédéricLN said...

New stuff: C. Lagarde says that indeed, she was not entitled to give "instructions" to EPFR (the layer above CDR). That refers to the fact the litigation was supposed to be private matter, not implying the State as such. But her letter was not hand-signed, just signed by the signing machine at a moment where she was absent: she would not have approved the text, she says. That givers rationale for her qualification as "témoin assisté", instead of "mise en examen".

According to an optimistic Bayrou, "Voilà la preuve que l’intervention d’un tout petit nombre de personnes peut faire triompher la vérité."