🚧The judge, the obligation of compliance and the company. The probationary compliance system

1. Introduction. The System of Evidence Law ⚖️ In order to articulate the evidentiary system of Compliance Law, it must first be admitted that Evidence Law is a system in its own autonomy and perspective.📎!footnote-3359 This could be difficult to accept, especially in Civil Law systems, as Evidence is most often considered either as an extension of the substantial branches of Law or as an extension of General Procedural Law.📎!footnote-3247 This is undoubtedly why Evidence, deeply studied in British and American Law schools, is studied so little in other places and presented in a quite abstract way, whereas in practice everything depends on it and it is essential to identify its principles that apply regardless of the different concrete situations. It is therefore in the substantial branches of Law, in particular Competition Law📎!footnote-3248 and Financial Regulatory Law,📎!footnote-3249 that the question of an evidentiary system arises, undoubtedly because these branches of Law are more sensitive to factual situations and maybe because the American thinking is very influential in Economic Law, notably through Law & Economics.

However, the evidentiary system is based on what we might call an “evidentiary square” that operates regardless of the different concrete situations, a system whose very principles Compliance Law seems to reject. This increases what is more generally the difficulty of articulating compliance techniques and the classical fundamental legal principles.📎!footnote-3252

This difficulty becomes a clear contradiction when compliance is poorly defined as the obligation for companies to show (which is a matter of proof, since showing means proving) that they have complied with all the regulations applicable to them. On the other hand, in a State governed by the Rule of Law, the subjects of Law enjoy freedom of action, and are liable for breaches of the Law and infringements of the rights of others only ex post. So, if companies are obliged to show their effective respect of all regulations in ex ante, compliance is then an attack against the Rule of Law, maybe justified by the Security imperative, but an attack nevertheless…

Fortunately, however, Compliance does not have to be defined in this way. Compliance Law consists of all the principles, institutions, rules and decisions which, in an alliance between public authorities and crucial companies, are substantially aimed at achieving Monumental Systemic Goals:📎!footnote-3251 as an ex ante branch of Law that protects systems and the human beings involved in them, Compliance Law aims to detect, prevent and build so that systems in the future are less exposed to disaster than they would be if nothing was done, or even so that these systems are better thanks to compliance mechanisms of detection and prevention.

The action required of companies in relation to precisely identified systemic goals – goals that are both more limited (it is not about all regulations) and more gigantic (eradicating corruption, establishing effective equality between human beings, curbing climate change, etc.), which require the implementation of permanent structures and a series of behaviours – requires a specific Evidence System to be attached to it, one that is both respectful of the General Evidence principles📎!footnote-3253 and specific to this new branch of Law that is Compliance.

The evidentiary system of Compliance is made up, firstly, of specific objects of proof, attached, on the one hand, to Compliance Structures and, on the other hand, to Compliance Behaviours. Secondly, the great specificity of compliance, which is often criticised, lies in the burden of proof, the load of which rests on companies, even when they are defending themselves procedurally. This burden is justified by the position of companies, but also by the scope of the objects of proof, a scope that must therefore remain strictly defined, while the requirements of other branches of Law (such as Criminal Law and Repressive Administrative Law) must be integrated, because while Compliance Law is indeed a specific branch of Law justifying new evidentiary obligations, it cannot destroy the other branches of Law and must take account of the legal system in which it is deployed. Thirdly, the magnitude of the evidential stakes is such that the means of proof have multiplied, and even have to be constructed on purpose, according to the triptych of effectiveness, efficiency and efficacy expected from the compliance system itself with regard to the Monumental Goals (and not the regulations). Science and technology, derived from the systems involved in the Compliance Monumental Goals, play a major role in this.📎!footnote-3254 Fourthly, because Compliance Law is an ex ante branch of Law and yet the Judge is at the centre of it, it is logical that all efforts should focus on the pre-construction of evidence, carried out by the company either by force or voluntarily.

 

I. PRE-REQUISITE: SITUATING PROOF AND COMPLIANCE IN RELATION TO EACH OTHER 

 

2. The clash between the Evidentiary System and what would be the Company’s obligation to demonstrate its “conformity” with the applicable regulations ⚖️ It is worth recalling the basic principles of the evidentiary system (A) in order to emphasise that, at first sight, Compliance Law, when wrongly defined by “conformity,” would destroy them (B).

 

A. The basis: the Evidentiary Square

3. Evidence, the strategic heart of Law and of the trial to let the person become master of time ⚖️ Quite unloved in the Continental legal education curriculum, Evidence is nonetheless at the heart of how the legal system works.📎!footnote-3255 No one can allege a situation, which is a construction of facts, and claim to benefit from the legal effect that the legal system attaches to it without proving the existence of the facts involved. Because the legal system works for the benefit of the person, a person who cannot activate the evidentiary system is therefore in the same situation as a person who has no rights: idem est non esse et non probari.📎!footnote-3256

That person may have a right, but the system will not work for him or her. The evidentiary system is therefore “vital,” in the sense that the legal system will only “come to life” through the operation of the evidentiary system which, like a fabric, covers the whole Law, enabling it to be activated for the benefit of persons, individuals and entities. This vitality operates at all times outside of confrontation: because the truth of the facts of each situation is usually established; because in practice, this truth is not contested; because, more often than not, this benefit, which we continually derive from the Law, a benefit crystallised in our subjective rights,📎[11] spontaneously gives rise to recognition by others, admission by all and more particularly by the debtor making payment on his or her own accord. This is how, even without litigation, the legal system comes to life in practice, thanks to the evidentiary system, whose multiple mechanisms of presumption and dispensation from proof enable rights to be enforced and substantial rules to be applied.

It may happen that this quiet river of the legal order is disturbed by a contestation, taking the form of a claim, for example, against another person. The evidentiary system, which was only virtual, will appear in a more active form, since it is before a judge that the alleged facts will have to be proven in order for the related claim to be satisfied. The whole trial can be described as an evidentiary mechanism, both theatrical and scientific. Depending on the culture and the case, the trial will be more or less one or the other.

But because the Law is an order that unfolds over time, always unifying the past, the present and the future, the need to prove created by the dispute, the effectiveness of what were traditionally called subjective rights rendered “in a state of war” by legal action before the judge, justifies wise people having prepared for this prospect, even before the need for effective proof of the benefits derived from texts and the titularity of rights, at a time when no one disputed or claimed them: it is a wise practice to take evidence in advance, even when the legal system does not require it.

The evidentiary system therefore covers all segments of time, from the fury of ex post litigation to the wisdom of ex ante evidence, just in case. For those who are in the time of the trial, it is most often a question of finding facts from the past, but also of anticipating facts from the future; for those who are in the time of pre-constitution, for example contractual time, it is a question of constructing in advance a more or less indisputable account of facts in the event that allegations formulated in the future would concern them.

Compliance Law, this ex ante branch of Law, will develop this concern for the future more than any other branch of Law. This is why it will increase the techniques of proof, and even oblige companies to develop new means of proof, sometimes against themselves, and increase the burden of proof, specific features of compliance which must not, however, disregard the general system of proof in its guiding principles. The Law must ensure that compliance does not devour these principles, for example through the mechanical performance of algorithms.

But the more the Law worries about the future and wants to control it, with compliance expressing this “claim,” the more the Evidence System will be called upon, in a form that is certainly more and more scientific, but also probably more and more theatrical.

The evidentiary system therefore entirely covers the legal system and enables people to control time as far as possible: to keep track of the past or to reconstruct it, to anticipate future difficulties, using all the techniques available to freeze it in advance. Those who neglect evidence, or who do not have access to its resources, reduce the benefits offered by the Law, or even exclude themselves from it. Enduring the “risk of proof,” he will succumb to his claim, because this presupposes that the allegation is proven in the factual information it articulates, the “right to proof” existing only in specific cases covered by texts and not in a general way. At a time when everything is data, this is a considerable challenge. But this is not the sudden result of digital technology or of the information society: since Roman Law, and in every legal system, a square of evidence has been established.

 

4. The Evidence Square ⚖️ In the vast field of Evidence Law,📎[12] let us briefly recall what can be called the evidentiary square on which all evidentiary systems operate, answering 4 questions: “Who must prove? What to prove? How to prove? What are the conditions for proving?” These questions relate to the burden of proof, the object of proof, the means of proof and the admissibility of evidence. The answers are rooted in all the substantive branches of Law and come under both General Procedural Law📎[13] and underlying Substantial Law since we are slow to give Evidence Law the autonomy it deserves.

Anyone who can answer the four questions, manipulate the four answers and use the answers to one question to change the way another question is formulated, as one does with a kaleidoscope, for example manipulating a means of proof to change the burden of proof, or even obtaining its division,📎[14] becomes the master of trials, particularly in preventing them and resolving them successfully.

 

5. The first vertex of the Evidence Square - the burden of proof ⚖️ The burden of proof deserves its name:📎[15] it is a heavy load. This burden falls on the person making an allegation. The first person to make an allegation is the one who brings the matter before the court; therefore, Law usually places this burden on the plaintiff, but only because this plaintiff makes the first allegation, stating, for example, that the sum for which he or she is claiming payment (which constitutes his or her claim) is owed to him or her by the defendant (assertion which constitutes his allegation). Once the burden of proof has been satisfied, because the party to the lawsuit has provided proof of the factual elements that make up his or her allegation, either all of the objects of proof at stake in the dispute are proven and the judge can then rule, or the burden of proof begins to circulate and it is another party, usually his opponent, who will in turn have to bear the burden of proving, because he or she too will have made an allegation.

In this way, the trial is often an alternation of burdens of proof, as the parties meet them, by confronting each other in various allegations that contradict each other in a debate. In this way, a round of burdens of proof is created, because faced with the plaintiff in the proceedings, who was the first to make an allegation, the other parties do not remain inactive, formulating claims (if only the rejection of the claims of the others) and fuelling these claims by providing evidence, since the proceedings may involve many parties. But at some point, this roundabout process comes to an end: it is then the party that has not met his or her burden of proof that loses. The burden of proof thus contains the “risk of proof,” a mortal risk since the cost is judicial defeat. For example, the person who demanded payment but was unable to prove that the sum was due bears the risk of proof correlated to the burden of proof and then loses.📎[16]

The more technical the case, the more difficult it is to prove the allegations. This is particularly true in Economic Law. If the fact is past, we often never know what happened; if the fact is future, it is often impossible for anyone to reliably reconstruct what will happen. Merger control is played out on the scaffolding of “tests,” The evidentiary stakes are therefore above all the burdens of proof, in that they contain the risk of proof, and the parties’ strategies aim to shift them onto the shoulders of another party, or even onto those of the judge.

However, the presumption of innocence has the considerable effect of placing the burden of proof on the accuser, which explains why this principle, which is political in nature, is given such importance in economic litigation, as it enables companies to place the risk of proof on the shoulders of the prosecuting authority, whether it be the regulatory or supervisory authority, the administration or the public prosecutor, even the company itself, and to interfere with the round of burdens of proof described above.📎[17]

 

6. The second vertex of the Evidentiary Square - the object of proof ⚖️ The object of proof is what the person who bears the burden of proof must show. From the outset, Law grants a major dispensation: it is not up to the claimant to prove the existence of the legal rules applicable to the claim,📎[18] jura novit curia.📎[19] In the claim that the party develops, only the element that has a factual dimension is therefore object of proof: in the example given above, the existence of the sum owed to the claimant by another person. As a factual situation is like a painting with multiple points, not all the facts that make up the situation need to be proven: it is considered that the constant facts are exempt from proof and that only the contested points need be established. To continue with the example given, the nationality of the person in question will not be proven, but their status as debtor will be, because the evidentiary system anticipates that this status will be denied by the adversary.

The fact must also be “relevant,” i.e. its demonstration or non-demonstration must have an effect on the outcome of the judicial dispute. In this example, the fact is relevant because if the plaintiff to the allegation (which in this case is the plaintiff to the proceedings) cannot show that the defendant summoned actually owes the sum, he or she will lose the case, since this quality of debtor was required to found its claim.

Finally, the fact must be apprehensible, i.e. it must be possible to grasp it. This is why the evidentiary system excludes the proof of negative facts,📎[20] because we cannot prove what is not, for example in principle what has not yet happened because it is a future event. This is a major issue which has been revived by Compliance Law, since Compliance Law is an ex ante branch of Law📎[21] , the object of which is the future… Conversely, the fact that it is difficult for a party to obtain proof is not enough to remove his or her obligation to prove, but it does justify his or her being helped to do so. Such a difficulty arises, for example, because the fact is very complex, and the court may order an expert opinion, even in futurum, or because the evidence is in the hands of the opposing party, and the court may require it to be produced. However, for the moment there is no such thing as a “general subjective right to evidence,” with texts granting it only in specific cases, notably in Labour Law.

 

7. The third vertex of the Evidentiary Square - the means of proof ⚖️ To meet the burden of proving the relevant facts alleged, the plaintiff resorts to means of proof. This is where Law and Science meet since the purpose of the evidence is to establish the truth of the alleged facts. In principle, as in scientific matters, the person may use any means of evidence that he or she can gather: in principle, the evidence is free📎[22] and, as in scientific matters, the judge must then be convinced. The freedom to adduce evidence is matched by the judge’s freedom to assess the evidence. In general presentations, Evidence Systems seems very different in Civil Law and Common Law systems. In Continental Law systems, the principle is the freedom of proof and the Judge is free to be convinced or not. On the contrary, in the Anglo-American Law systems, the standards of proofs are applied and, in Criminal Law, the prosecutor is obliged to prove “beyond the reasonable doubt,”📎!footnote-3360[23] while, in non-criminal cases, the principle of “preponderance of evidence”📎!footnote-3361[24] obliges the person who bears the burden of proof to present means of proof convincing that the claim is true for at least a 50% chance. [A1] [A2] 

But technically, in Civil Law systems, on the one hand, the segments in which the exception of “legal evidence” is adopted, in particular in favour of written evidence, are so vast, and on the other hand, the growing demand for the requisite of “standards of evidence,” or even for a typology of evidence that is more reliable than others, according to the American methodology of the “standards of proof,”📎[25] may cast doubt on a so abrupt opposition between these two evidence cultures, especially in Economic Law which mixes the pure economic techniques, for instance the “test,” with evidentiary methods.

On the contrary, in Common Law systems, even if the prosecutor must prove beyond the reasonable doubt, the technique of popular juries, particularly in class actions in civil liability cases, calls into question the scope of the required standards of proof.

The fact remains that if the person who bears the burden provides the means of what he or she has to prove, then he or she satisfies his or her burden, unless the defendant to his or her allegation in turn makes an allegation, which in an evidentiary turn will have to be proved by the defendant (for example, extinction of the obligation to pay as a result of the plaintiff’s failure to perform his or her own obligation).

Evidence may take the form of testimony (testimony against oneself being an admission) in any form (oral, written, image, etc.), writing or reasoning. One of these forms of reasoning is the presumption. The more difficult the object is to prove, the more presumptions will be activated, because they consist in changing the object of proof. The presumption consists in shifting the object of proof: unable to prove the direct object of proof, the plaintiff proves another object of proof that is connected to the first by a logical link, in particular a causal link. For example, if the party cannot directly prove the presence of a person on the premises, he will prove the presence of an object belonging to that person, which allows that presence to be presumed. The presumption then reverses the burden of proof, as the party opposing the allegation may in turn allege, for example, that the person in question was present at the time in another place, a presence that he or she will in turn have to prove. Presumptions play a central role in Economic Law, because it is so difficult to prove directly… Therefore, Economic Law constitutes a natural field in which behaviour is often reconstructed on the basis of economic and financial rationality models.📎[26]

One of the difficulties encountered in laying the foundations of a Compliance Evidence System therefore lies in the lack of solidity of the evidentiary system itself, because, in order to design the special evidentiary system in harmony with the general evidentiary system, the latter would have to be solid. However, this is not the case on many essential points[A3] , such as whether it should be linked to General Procedural Law or Substantive Law, whether evidence is free in principle or not, what is the place of standards of proof, what the judge is bound by, etc. The same uncertainty about the foundations of the general system is found in the admissibility of evidence.📎[27]

As a result, each branch of Law is developing its own little system of evidence, with Economic Law seeming to stand apart and migrate towards the American system of evidence, which has little to do with classical Civil Law evidence system, since the latter lacks solid and clear foundations. This is highly prejudicial, since evidence is what gives life to Law and to rights,📎[28] i.e. to the legal system itself. The issue is that Compliance Law is certainly part of Economic Law, so impregnated by American legal culture thanks to Law & Economic influence, but it is growing through classical civil Tort Law, in application of classical Continental Evidence System.

It might be thought that compliance, in that it both creates a specific branch of Law📎[29] and gives new life to other branches of Law,📎[30] could remedy this.

 

8. The fourth vertex of the evidentiary square - the admissibility of evidence ⚖️ Means of proof are more or less admissible. This is where legal evidence differs from scientific evidence, either below the latter since legal evidence, even if convincing, may not be admissible (for example, when it is not obtained faithfully), or above it if, even if unconvincing, it is binding on the judge (for example, in factual situations governed by the legal evidence system, for instance through an acte authentique (authentic instrumentum) which is an indisputable document).📎[31] First of all, this system known as “free evidence” does not always apply, as certain situations exclusively require pre-constituted written evidence (system known as “legal evidence,” applicable in the case of legal acts relating to civil transactions for a rather large amount).📎[32] Evidence constituted in accordance with the rules of legal proof (authentic instrumentum / private  instrumentum) has a different probative value,📎[33] with certain elements being indisputable.📎[34] In the same way, an oath is an evidentiary technique that binds the parties and the judge, and this powerful effect casts doubt on whether it is even evidence, since the link with the truth is so loose.

Anyway, the way in which the information is gathered must be fair, since fairness of evidence is considered to be a general principle of the evidentiary system, an application of the general standard of fairness that characterises States governed by the Rule of Law, to which only by exception, and therefore duly justified and confined, is the opposite admitted.

 

9. The interplay between the four corners of the Evidence Square ⚖️ Based on these four interfering points summarised here, texts and case law have developed numerous rules to make the system heavier or lighter in favour of some or others. For example, the French Constitution has established the principle of the Presumption of Innocence in favour of a person threatened with a decision causing grievance to them, be it not only a penalty but every sort of sanction, Constitutional courts interpreting this principle broadly: this places the burden of proof on the shoulders of the accuser, in particular the public prosecutor. Because it impedes what has been described here as the natural round of burdens of proof,📎[35] the presumption of innocence, attached to the prospect of sanction, has been described not as a rule of evidence but as a substantive rule, in particular because this presumption constitutes a political foundation of the social community.📎[36] However, it is presented by some as being very badly treated by Compliance Law…📎[37]

In the same way, the Freedom of Evidence principle allows for reasoning, including economic reasoning, as a means of proof. From this margin offered by the principle of freedom of evidence, Economic Law has made great use of, to the point of [A4] [A5] sometimes substituting what has been called “economic evidence,” claiming greater objectivity and security, for what should no longer be called “legal evidence,” in particular in that the latter still requires proof of an intention to act in order to punish a person, whereas “economic evidence” could reconstitute, on the basis of calculations, behaviour that is likely to be rational in order to impose remedies.📎[38]

However, this is often seen as a lack of understanding of the evidentiary system in Economic Law, particularly in its repressive dimension. In the same way, the proliferation of “rights to evidence” in litigation before regulatory authorities has been seen as inconsistent with traditional principles. This seems to be only one of the head-on clashes between Compliance and Evidence, but it appears as a confrontation only if we seek to define compliance as that which would give rise to an obligation on the part of legal subjects to show ex ante that they are “in conformity” with all the regulations applicable to them (B). But this is not the pertinent definition of Compliance Law (C).

 

B. The head-on collision between Evidence principles and Compliance, defined as the obligation to demonstrate its conformity with all applicable regulations

10. The first clash between Compliance and Proof, generated by the definition of compliance as the company’s obligation to prove its “conformity with the regulations applicable to it”: the obligation to prove the Law? ⚖️ At first sight, the confrontation gets off to a bad start, because the first thing the evidentiary system does is dispense with the need to know the Law, as no one has to gather together the applicable legal rules in order to benefit from them.📎[39] In fact, the other rule, known as “ignorantia juris non excusat,” does not require knowledge of the Law but implies that ignorance of the Law cannot be used to avoid its application and a penalty for disregarding it: for instance, in the United Kingdom, “Ignorance of the law is no excuse,” in France, “nul n’est censé ignorer la loi.”

But if Compliance is defined as a general obligation to spontaneously obey all applicable regulations and to make this obedience visible, it would be necessary for the subject of Law to effectively know all these “regulations” beforehand. All compliance departments explain that their first task, and a difficult one at that, is to collect all these “regulations.” A gigantic task, for which only machines, algorithms and A.I. seem to be the solution, leading to what would be “automatic compliance.”

Quite apart from the negation that this automatism represents in terms of what is the Rule of Law,📎[40] this would place a prior obligation on the company, as a subject of Law, to provide proof of all the regulations that apply to it, him, her. They could do it by using algorithms. But first of all, as everyone points out in practice, this is extremely difficult since the Law, which is then presented as a “regulatory fabric,” is in flux and the company is unable, despite its technological investments, to know what it is. But since it is obliged to do so, because it has to know it in the first instance, in order to comply with it in the second, if it subsequently turns out that there was a rule that it did not know about, and which it therefore failed to show that it was actively conforming with, it would have to be penalised… The company therefore invests in technology, machine memory and the processing capacity of algorithms in order to get to know the regulations, which is a prerequisite for conforming with them.📎[41] The hope in deep learning, through machines that would be “intelligent” as humans are, could be a perspective, but is very disputed.[A6] [A7] 

Secondly, however, this is totally contrary to the very principle of the Evidentiary System, since it is not up to the subjects of Law to demonstrate to the judge their knowledge of the legal rules because the evidentiary system exempts them from proving the applicable legal rules, or even from invoking any of them.

For Compliance Law not to destroy one of the foundations of the evidentiary system, the definition of Compliance Law must not be this ex ante demonstration of obedience to all applicable regulations, including the gathering of all of them, but rather the participation in the achievement of Monumental Goals.📎[42]

 

11.The second clash between Compliance and Proof, generated by the definition of Compliance as the company’s obligation to prove negative facts: the non-violation of applicable regulations ⚖️ Let us continue with this definition, which makes no sense whatsoever, requiring companies to prove to everyone that they are actively conforming with all applicable regulations at all times, in all places and through all the people for whom they are accountable. If Compliance Law was to be such a straitjacket, then not only would the burden of proof be colossal, since the company would have to demonstrate that it was indeed aware, through its machines, of all the applicable regulations,📎[43] but it would also be impossible to satisfy this burden of proof because it is a negative object: “non-violation.”

In this conception, the proof of compliance is not a positive proof: it is a matter of proving that the company has not breached the applicable regulations in the past, is not breaching them now and will not breach them in the future. To “be conform” would mean to not violate the regulations. It is therefore a negative fact. However, as a matter of principle, negative facts cannot be proven📎[44] and it is totally exhausting, and ultimately impossible, to demonstrate that nowhere in the past, and nowhere in the future, anyone has deviated, is deviating or will deviate from the rules. How can this be demonstrated? Other than by making statements such as “I am not corrupt, and no one for whom I am answerable is or will be corrupt,” a statement which the public authorities have sometimes described as nothing more than a marketing process, but which is difficult to replace by anything in practice… In fact, the burden of proof in the face of such an object of proof is such that companies are led to make general commitments, conducts presented as “exemplary” and speeches, which the public authorities frequently analyse as nothing more than pretences. But it is the object itself that is not, in the technical sense of the term, “bearable.”

This seemingly impossible link between the Evidentiary System and Compliance Law, in that the latter would disregard two essential principles, namely the non-necessity of proving regulations and the prohibition on requiring proof of negative facts, stems from this definition of compliance as an obligation on companies to “conform with all applicable regulations.”

To overcome this aporia, one must either try to achieve this extraordinary compliance performance by dehumanising compliance through the use of software that would take care of everything📎[45] , or not adhere to this definition of compliance as proof provided to everyone by the company of its conformity with all the regulations applicable to it.📎[46]

 

12. The temptation to replace human beings with machines in order to achieve compatibility between the Evidence System and Compliance, defined as the company’s obligation to prove that it is not in breach of the applicable regulations ⚖️ In the face of what appears to be an inhuman requirement, the solution seems to be to move away from human solutions and entrust everything to algorithms. Engineers are building computers to store the mass of information in the form of texts and decisions of all kinds and origins, while algorithms correlate the cases processed with each other, with the correlations gradually covering all past, present and future factual hypotheses.📎[47] This would have the radical effect, assuming that such compliance was obtained in this way, of proving that the company has always obeyed, is obeying, and will always obey the rules, legal and non-legal, which would exclude the judge from the Compliance System since violation would be excluded. This would also exclude the Rule of Law, which always presupposes the presence of a Judge,📎[48] which may not seem insurmountable, and may even seem attractive to some.

 

13. It is preferable to define Compliance Law by its Monumental Goals in order to make it compatible with the Evidence System ⚖️ But if the Rule of Law is to be valued and imperatively protected, another solution must be sought: this lies in defining Compliance Law substantially, in terms of its Monumental Goals.📎[49] It should be kept in mind that Compliance Law is defined teleologically in terms of the aims pursued by this branch of Law: the goal is to ensure that, through an alliance between the public authorities and Crucial economic Operators,📎[50] the future is changed in relation to the path mapped out for it by the present. In this systemic perspective, Negative Monumental Goals aim to block what would happen without immediate and constant action, such as an endemic disaster and/or the disappearance of systems. There may also be Positive Monumental Goals to ensure that these economic and social systems progress, for example through the principles of equality between human, probity and respect, and the new ecological balances.

This definition eliminates apparent contradictions. For example, if Compliance Law is defined in a substantive way by these Monumental Goals that are specific to it and that the crucial operators pursue, whether by force or by choice,📎[51] then the regulations applicable to the company no longer need to be stored by it in technological memories since it is not required to show that it is in conformity with them, the Law therefore not being an object of proof.

More generally, it is on the basis of the objects of proof that Compliance Law carves out its specificity, with regard to this definition, in order to define an Evidentiary System specific to Compliance, which is not inhuman and which transcribes the originality of Compliance Law: it is therefore not with the burden of proof that we must begin but with the objects of proof, because it is first and foremost through these that the specificity of this branch of Law is marked. Everything follows from there.

II. Objects of proof specific to Compliance Law: structural mechanisms and best practices expected

14. The fundamental distinction between structural and behavioural measures ⚖️ With regard to the goals pursued, whether it is the legal rules that require it or the company through what is then called ethics or societal responsibility, in documents which most often reproduce the letters of the Law, duplication leading to many difficulties because of this superimposition of sources of various kinds,📎[52] the company puts in place “Compliance Tools.”📎[53]

As the goals are both negative (eradicating money laundering, eliminating corruption, suppressing market abuse, eliminating the expression of hatred and discrimination, etc.) and positive (protecting nature, promoting women, educating, etc.), companies need to put in place specific structures, thanks to which high-performance behaviours are obtained or increased and the Monumental Goals designated by the public authorities are better achieved.

Translated into the Evidentiary System, the crucial companies, which are the legal subjects of the Compliance System,📎[54] are faced with two objects of proof, drawn by the Monumental Goals: the implementation of the structural measures expressly required, by Law or by the company itself, and effectively organised (A) or the adoption of the relevant behaviours to achieve the Monumental Goals, behaviours which prove to be more or less effective (B).

A. Proving that the required structural organisations have been put in place to achieve the Monumental Goals

15. Setting up structures, an obligation to achieve results ⚖️ Many of the Compliance Tools are structural. These include plans, mapping and training. It is quite another thing for these tools to produce the effects expected of them, i.e. the expected behaviours, for example, behaviours of prudence following risk mapping, or behaviours of responsibility following training.

A person whose interest it is may therefore ask the company, which is the subject of Compliance Law, to show that it has put in place the compliance structures required by a legitimate source of compliance, for example a law, a judgment (as an additional compliance penalty or as a commitment), a judicial settlement such as a deferred prosecution agreement or a convention judiciaire d’intérêt public (Judicial Public Interest Agreement), or a contract.📎[55]

 

16. The only object of proof for compliance structures is their effectiveness ⚖️ But the only object of proof is this implementation, not the effect produced by it. As soon as the company has put in place a plan, a map, monitoring and training mechanisms, the outline of the object of proof is correctly drawn, and the burden of proof arises from this and will be satisfied if the documents are communicated. What the compliance tools produce, their results, which are measured in consideration of the Monumental Goals, is another object of proof. It is true that this is not always clearly perceived, because of the language game, maybe the language trap, which consists of asserting that the “results” obtained thanks to the means of compliance are only obligations of “means,” whereas the execution of the structural obligations is an obligation of “result.” It’s hard not to get lost… Especially if you entrust all this to algorithms, whose only skill lies in matching words.

 

17. A strict analysis of the object of proof, the shifting of the object of proof by presumption and the reversal of the burden of proof ⚖️ Once a company has shown everyone the existence of the compliance structures it is required to put in place, because the Law, a court ruling or its own commitments have led it to do so, the company has met its burden of proof. The company does not have to prove the efficiency of the structures it puts in place. According to the “burden of proof round mechanism,”📎[56] it is up to the party challenging the company’s performance of its obligation to show that the company, in setting up its structure, knew or could not have failed to know that the compliance structure could not produce the minimum effect expected by Law. For example, a company that does not provide the person or the department in charge of compliance with any resources cannot claim to have fulfilled its compliance obligation, even if the company is free to decide how to do so. However, it is up to the person alleging this inadequacy, in this case the Regulatory Authority, to demonstrate this inadequacy, which is also structural, by showing, for example, that there were only one or two people to monitor many individuals and structures in many places. Initially, the effective implementation of structures presumes their effectiveness.📎[57] For example, a better ability on the part of individuals to resist corruption or detect money laundering in the future, or to combat harassment, is presumed by the setting up and running of training courses in this area. These are two separate items of evidence: the provision of training on the one hand, and the results of that training on the other. However, what is relevant for Compliance Law defined by Monumental Goals, a non-mechanical concept, is not the training courses but their results. But then the presumption comes into play, allowing the company bearing the burden of proof to move from the direct object of proof (the result of the training) to the indirect object (the implementation of the training), with the implementation and holding of the training presuming an effect. The burden of proof is then reversed: another party can break this presumption. It is possible for someone to allege that, despite this training on fighting corruption, money laundering, environmental destruction, climate imbalance, etc., no change in behaviour has been observed in the company, among those for whom it is accountable.

But this new object of proof, the unproductiveness of the Compliance Tools, creates a burden of proof that rests on the author of such an allegation, not on the company that has put in place the required tool. However, it would be prudent for the company to provide evidence of the efficiency of this tool, for instance a training, i.e. an increased awareness among the people for whom it is responsible of the need to prevent and combat corruption, or even to provide📎[58] evidence of the efficiency of this training, i.e. an observed reduction of corruption in the geographical area, industrial sector, etc., greater respect for others, or even the first signs of a cultural change. The need to gather evidence in advance📎[59] is emerging, anticipating this round of burden of proof.📎[60]

 

18. A possible burden of proof of the efficiency of the structures put in place ⚖️ Furthermore, even if in any case it is always more prudent for companies not to confine themselves to the object of proof, which is only the effectiveness of the compliance structures put in place, it may happen that, because of the heavy burden of proof that Compliance Law places on companies,📎[61] legislation requires more than this and demands that companies provide ongoing proof of a link of efficiency between the structures and behaviours. This is the purpose of the specific obligation to “monitor,” as the legislation refers to it, whereby companies must regularly report either internally or externally, in a targeted manner (to a monitor, public regulatory and/or supervisory authorities) or generally, on the effects produced by the structures put in place with regard to the Monumental Goals set.

With regard to such an object of proof, so that this does not lead to a de plano reversal of the burden of proof, in particular when a sanction is attached, which would contradict the presumption of innocence principle, this object of proof can only be that of plausibility: the company must, through monitoring that it puts in place itself, not prove the efficiency of its system on behaviours, but prove that this goal has plausibly been achieved. This is the purpose of compliance audits,📎[62] which are both a management tool and a proof tool.

B. Demonstrating the best efforts to achieve behaviours that concretise Monumental Goals

19. Achieving Compliance Behaviours is an obligation of means ⚖️ If it is conceivable to express such a gradation between Compliance Structural Obligation and Compliance Behavioural Obligation, one could say that it is even more impossible to actually achieve the Monumental Goals than it is to be fully conform with all the regulations. Indeed, companies cannot root out all corruption, eliminate all money laundering, restore climate balance, replace war with peace, or insert probity and equality as full principles in all human societies, not only those in which they have their headquarters but also all those in which the people for whom they are accountable are. The extraterritorial effect of Compliance Law makes all this impossible and unbearable, in every sense of the word. This is also why companies protested so much against the adoption of the French “Vigilance” law of 2017, sometimes presenting it as unbearable,📎[63] the same protestation arose against the European directive on Corporate Sustainability Due Diligence.📎[64]

However, quite apart from the fact that this new Vigilance duty allows companies to obtain a great deal of information on other companies at the behest of the legislator,📎[65] the confusion has largely arisen over proof. While companies are required to put in place compliance structures, such as vigilance plans, they are not required to obtain from the persons for whom they are accountable the behaviour that constitutes the very purpose of the system: for example, stopping any wrongful damage to the environment or restoring effective respect for rights in countries where they have interests in the value chain.

The two types of evidence are cumulative and must not be confused. If they are confused, by transforming everything into obligations of result relating to behaviour and results, Compliance Law will become unbearable for companies. However, the Conseil constitutionnel (French Constitutional Council) confirmed in its decision of 23 March 2017, Loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre📎[66][A8] , that the so-called “Vigilance” law, which imposes what is admittedly a personal liability on companies in this respect, implements it in accordance with the ordinary Tort Law, which does not target an obligation of result, the obligation of means remaining the principle of any obligation and requires specific conditions.📎[67] If we confuse structural obligations with behavioural obligations, if we do not bear in mind what Compliance Law is all about, either by transforming everything into obligations of means, which would make the implementation of compliance structures almost optional (plans, monitoring, training), or by transforming everything into obligations of result, which would make Compliance Law unbearable, then nothing will be able to function. It is therefore essential to bear in mind these two objects of proof, structures on the one hand (subject to obligations of result) and behaviours on the other (subject to obligations of means), their distinction and their addition.

 

20. The object of proof: the company’s proportionate efforts to achieve Compliance Monumental Goals ⚖️ The obligation of means triggers evidential obligations. Thus, the company, which bears the burden of proof,📎[68] must show that it has acted to ensure that the persons for whom it is accountable behave actively so that the Monumental Goals are achieved. For example, with regard to the imperative of fighting money laundering, the bank must have carried out checks on the financial flows of the customer whose account was functioning abnormally, and the information must have been promptly passed on to the public authorities. The judge must not, by looking back and knowing that a particular customer was a drug trafficker – information that the banker did not have – analyse the situation as if the obligation to know your customer (KYC), a well-known Compliance Obligation, had been an obligation of result: it must remain an obligation of means, with appropriate behaviour also coming under such an obligation.

The appropriate principle is that of Proportionality.📎[69] Compliance gives companies burdens, obligations and powers, for example to control others. By carrying out these controls, it diminishes the rights of others, for example the right to secrecy, right to privacy, right to be forgotten, which are the rights of the personal data holders. The company must make its “best efforts,” which is a standard of behaviour in abstracto with regard to professional rules, but also in concreto with regard to the information in question. The efforts that the company must make to collect, analyse, transmit, preserve and transform Information must be proportionate to the Monumental Goal that gives meaning to all the obligations, rights and powers that punctuate Compliance Law.📎[70]

By its very nature, as soon as a company take action, this action must be presumed to be proportionate to the goals imposed by Law and for which it is acting. It is up to the party contesting this proportionality, for example the customer who alleges that by acting in this way, the right to the secrecy of his or her personal data has been infringed, which would render the action disproportionate from above, or the administrative authority or the public prosecutor who alleges that by acting in this way the information collected by the company was insufficient or too late, which would render the action disproportionate from below, to prove this.

 

21. The major issue is the distinction between the Effectiveness, Efficacy and Efficiency of Compliance Tools ⚖️ Thus, the general assertion that Compliance Law works well with “effective, efficacious and efficient tools,” i.e. tools that are first put in place (effectiveness), then produce the expected effects (efficacy) and finally achieve the goals for which they were designed (efficiency), can be broken down into as many evidentiary rules. Structural obligations are subject to obligations of result, but it is only a question of proving the effectiveness of their execution, unless the other parties can show that these structural tools were never able to produce the expected behaviour. Behavioural obligations are subject to an obligation of means, but the object of proof is that of efficacy with regard to the monumental goals that give meaning to the whole Compliance Law, with “best efforts” being demonstrated with regard to the principle of proportionality. As for the efficiency of the whole, since the actions of companies are inseparable from those of States, the population and what happens on the planet as a whole, the proof that can be adduced is more that of the goodwill of the company, thus reinforcing the proof of efficacy, than of the fulfilment of an obligation, since companies are no more obliged to save the world than they are legitimate to govern it.

 

22. Evidentiary wisdom: pre-constituting evidence not only of the Effectiveness but of the Efficacy and the Efficiency of the entire Compliance System, regardless of the burden of proof ⚖️ Because Compliance Law is an ex ante branch of Law, companies must have the wisdom to pre-prove everything, even if it is not a legal obligation, the “evidentiary reflex” being undoubtedly the most important element in the overall “Compliance Culture” that needs to be disseminated. Borrowing from the British and American cultural way of thinking, the idea that one day a judge will get involved, and that the further away that day is, the more difficult the company’s position will be, the company must gradually build up its own evidence system daily. As widely as possible, as early as possible, by all possible means.

Rather than using their strength to pass on the burden of proof to others, by contractual clauses for instance, companies should concentrate their strength, even in a system of evidence still governed by the principle of free proof, on pre-constituting evidence of their compliance diligence, because it is on them that the burden rests.

III. Who bears the Burden of Proof in Compliance Law?

23. The weight of the burden of proof, moderated by the other corners of the “evidential square.” ⚖️ Whether we welcome it or complain about it, the burden of proof rests on companies, which are in a position to structure themselves and act to give concrete form to the monumental systemic goals that give meaning and coherence to Compliance Law. The compliance tool may be the obligation, which may be express, to “comply” with obligations, but because Evidence Law is a system,📎[71] the burden of proof is defined by the purpose of the evidence and the means of proof. Thus, the purpose of proof is not to show that a company is in conformity with all the applicable regulations and that it succeeds in enforcing them, but to prove that the company actually contributes to the achievement of the monumental systemic goals for which Compliance Law exists. Similarly, the means of proof are freely organised by the company and not by the public authorities.📎[72]

 

24. The weight of the burden of proof in Compliance Law, moderated by the principles of other branches of Law ⚖️ That Compliance Law, itself an autonomous branch of Law, should develop its own Evidentiary System, is the very purpose of this article, which sets out the prolegomena and considers whether the evidentiary system is itself an autonomous branch of Law. But neither are autonomous from the legal order, that expresses a State governed by the Rule of Law, which by its very nature requires the Evidentiary System of Compliance to respect the guiding principles common to all branches of the legal order, such as the principle of loyalty and the principle of protection of persons in danger. It must therefore be stated that Compliance Law does, of course, place the burden of proof on the company (A), but interfere with all the other branches of Law (B).

 

A. The burden of proof on the Company in meeting its legal Compliance Obligations

25. The position of the Company “charged” of a Compliance Obligation, independently of its place in the proceedings, because of its “Compliance Obligations.” ⚖️ It has been pointed out that in the Evidentiary System, the plaintiff in the proceedings bears the first burden of proof only by coincidence with the fact that he makes the first allegation in initiating the proceedings.📎[73] In principle, it is the party who makes the allegation who bears the burden of proof. But Compliance Law interferes with this general principle, unless it becomes a substantive rule - which is the case with the Presumption of Innocence📎[74] - because it creates a set of Compliance obligations for companies.

The compliance obligations imposed on companies by laws, contracts, voluntary commitments or compliance programmes ordered by public, regulatory, administrative or judicial authorities, whether structural or behavioural requirements, place the onus on companies to prove that they meet these various Compliance Obligations, which in turn give concrete form to the company’s general Compliance Obligation.📎[75] In this respect, by their very existence, Compliance Obligations place the burden of proof on companies, even if they are defendants in the proceedings and even if they do not allege anything.

However, we must not leave it at that, as this does not mean that the company has to prove that it “is conforming” with all the applicable regulations (which is in fact impossible), that it is not in breach of any of them (which is de jure impossible),📎[76] or even that it has to prove its innocence (which is contrary to the Rule of Law).📎[77]

 

26. The burden remains on the other party to prove the existence of a Compliance Obligation, obligation placing the burden of proof on the company ⚖️ In order for this burden of proof to be placed on the company regardless of its procedural position, even if, for example, it is a defendant,📎[78] the compliance obligation borne by the company must first be established since this is what interferes with the ordinary evidentiary principle. A distinction needs to be made between the sources of Compliance Obligations.

 

27. The scope of legal and regulatory Compliance Obligations and the burden of proof on the Company ⚖️ If the compliance obligation arises from a legal or regulatory obligation, the person claiming its performance, the contractor for example, even if this legal obligation is included in a contractual clause, does not have to prove the existence of this compliance obligation, since jura novit curia.📎[79] For instance, the Cour d’appel de Paris (Paris Court of Appeal) had the occasion to reiterate this point in connection with the company’s obligation to detect corruption in the companies for which it is accountable, an obligation included in an act of soft Law, the source of which the Court considered to be also of legal nature, and a matter of public policy, justifying the immediate and sudden termination of commercial relations with the supplier.📎[80]

In addition, the company may, before moving on to the other object of proof which is the actual performance of its Compliance Obligation, make an allegation which is a challenge to that obligation, in terms of its existence or enforceability, or the status or capacity of the person alleging it to demand performance, etc. In this case, the company shall then have to prove what it alleges, but the evidential debate will then remain solely on the object of the Compliance Obligation, in terms of its existence, and not already on its performance. Of course, the company will then have to prove what it is alleging, but the evidentiary debate will then remain solely on the topic of the Compliance Obligation, in its existence, and not already on its performance, which constitutes the next evidentiary stage.

 

28. The contours of contractual or soft Compliance Obligations blocking the burden of proof on the Company ⚖️ The further one moves away from hard Law – treaties, the Constitution, laws and regulations – the more consistent the burden of proving the Compliance Obligation becomes for the other party who is seeking performance of its Compliance Obligation against the company.

If the source is not the law or a decree, the person who requires the Compliance Obligation to be fulfilled must provide proof of its existence, so that the company has to bear the burden of proving that the obligation has been fulfilled. For example, this person would have to produce the contract and show that the company is actually concerned by it, either under Contract Law, Company Law or Tort Law, since if we take the case of the duty of vigilance, the 2017 French law states that it is under Tort Law that the elements must be assessed (and therefore proven), whereas if we read what will become the European directive, it is rather under Company Law that the duty of vigilance must be assessed.📎[81]

This brings us to the oxymoron of the soft Compliance Obligation. In fact, it is in terms of “duty” that the texts, internal documents or simple statements are expressed, and the proof that this entails for the company, even if it is itself the author of this use, an obligation, is incumbent on the person requesting performance. Unless a natural obligation is brought into the evidentiary game, a very specific technical case which will prevent the company from requesting restitution for beneficial actions taken, which is legally justifiable, it is up to the party requesting enforcement of compliance promises to demonstrate that they give rise to obligations.📎[82] For the time being, the vagueness of the words, which can be avoided by combining them and stating that Compliance is the sum of Regulatory Law, Criminal Law, Contract Law, Tort Law and Ethics, can only be tolerated until the day when, for example, only ethics are at issue and someone nevertheless demands compliance, the compliance obligation then appearing as an autonomous object of proof, the question of its burden of proof becoming primary and essential.

 

29. The intensity of the burden of proof depending on the structural or behavioural Compliance Obligation incumbent on the Company ⚖️ Finally, as the four vertices of the evidentiary square interact, the burden of proof is affected by the objects of proof.📎[83] Thus, structural compliance obligations📎[84] generate a heavy burden of proof since they constitute an obligation of result, whereas behavioural compliance obligations📎[85] generate a lighter burden since they only constitute an obligation of means.

 

30. Availability of the burden of proof by contract ⚖️ Moreover, burdens of proof are not of public order, unless they interfere with substantive rules from other branches of Law. There can therefore be a kind of “contractual management of the burden of proof,” and in principle contracts concerning proof are valid when they relate to rights which are freely available to the parties, more precisely it is accepted that the burden of proof can be contractually reorganised as long as the public order is not affected. This last point does not mean, moreover, that a contractual reorganisation is excluded, but requires that, if a contract reorganises, no rule of public policy must be affected. If we consider that in Compliance Law, a systemic branch of Law of a teleological nature whose normativity is located in the Monumental Goals,📎[86] which are most often of a political nature, public order is very present, contracts may nevertheless reorganise burdens of proof, as long as the goals remain the intended objects and the means to achieve them remain deployed. It is then up to others than the company to prove that they have deviated from these aims through the contractual mechanism: the burden of proof will have been transferred by the contract. Specifically evidentiary contracts will have to be drafted to ensure that the shift in burden is not ambiguous and that the judge can take note of it.

 

31. Contractual transfer of the burden of proof by drawing up a “Compliance Contract.” ⚖️ Thus, by contract, one company may transfer to another the burden of proving the performance of Compliance Obligations, or even of the “Compliance Obligation,” if it is accepted that there is such a general obligation, of which the various specific obligations are merely the expression.📎[87] This may be the case, on an incidental basis, when a sort of “special contract” is drawn up with a service provider, the purpose of the contract being to entrust the latter with the task of ensuring that the company complies with a specific regulation, such as that relating to personal data, with the obligation then assumed by the co-contractor being accompanied by the evidentiary obligation transferred by the incidental obligation to prove that the obligation has been fulfilled. The recommended use of “trusted third parties” in many cases will increase the number of this type of contract. Indeed, in the event that a third party, whether a stakeholder, an authority or a judge, demands accountability from the company, the latter will be able to transfer this burden to its co-contractor because of this double transfer: the transfer of the burden of proof having had to be spelt out in a clear and unambiguous clause.

 

32. Contractual transfer of the burden of proof in a contract with a different economic purpose. The “compliance clause.” ⚖️ This may also be part of more general contractual relations and no longer in this special contract, which will be referred to here as a “Compliance Contract,”📎[88] but in a contract with a main purpose, for example a supply or sales contract or a subcontracting contract, the provisions of which include a possible transfer of compliance obligations incumbent on the company. This raises the question of whether or not the “compliance clause” constitutes a decisive element of the contract and of the obligations of the other party.

 

33. The difficulties arising from the overlap between the legal and contractual sources of the Compliance Obligation on the prospect of contractual management of the burden of proof of Compliance Obligations ⚖️ This difficulty may arise in particular in the case of the “duty of vigilance” as formulated in the French law of 2017, because the legislator has attached personal liability to it, and even if the company, in order to fulfil this duty, has recourse to service providers who, in turn, may have to prove the performance of their services as part of their contractual obligations, this should be with regard to the company, which in turn will be able to rely on it regarding to the stakeholders, authorities and judges, without being authorised to claim to place the burden of proof solely on the shoulders of their service providers, the company being left to face the beneficiaries of the legal obligation.

 

34. Wisdom with regard to the burden of proof through pre-constitution of evidence, in supervision of the principle of freedom of evidence ⚖️ Even if one refers to the distinction between the system of free evidence and the system of legal evidence, a distinction whose importance is, moreover, overestimated because the system of standards of proof being very common in Economic Law,📎[89] it does not matter that the pre-compilation of evidence would not be required, because of the burden of proof that rests on the company, as a result of the Compliance Obligation that concerns it, requires the company to pre-compile evidence of the fulfilment of its obligation. This is why the means of proof, freely devised,📎[90] must be the subject of every care by the company.

 

35. Evidentiary continuum, continuum of Compliance Tools. Example of “monitoring.” ⚖️ We often oppose the ex ante nature of pre-constitution of evidence, for example the drawing up of a written document, with the ex post nature of free evidence. However, in Compliance Law, the proof provided by the company of the proper performance of its Compliance Obligation, in terms of results for its structural obligations and of means for its behavioural obligations,📎[91] is more of a continuum. Indeed, the notion of monitoring is essential, and it is in this way that the company can provide evidence that mechanisms were “effectively” put in place ex ante, and then subsequently produced “efficacy” effects, generating in an “efficient” manner the expected effects on the system.📎[92] To achieve this, the company must carry out evidence monitoring on an ongoing basis. The “monitoring” mechanism provided for in compliance programmes, whether adopted spontaneously or as a sanction, is an evidence tool, and as such constitutes a compliance tool.📎[93]

 

B. The Evidentiary Dialectic when the fact, which is the subject of evidence, may give rise to sanctions

36. Articulating Compliance Evidentiary System with the other principles of Law within the same legal system ⚖️ Even if Compliance Law is an ex ante branch of Law, which justifies the fact that not only “regulation” but also the contract, which is also an ex ante instrument, are essential, sanctions are part of the system. In this respect, when the prospect of them being triggered arises or when their model of sanction is borrowed, for example by the company itself,📎[94] in particular through internal investigations, or even through the disciplinary sanctions that may follow, other principles also impose themselves. Putting all this together is not easy.

 

37. Compliance’s requirement that the burden of proof be placed on the Company and Repressive Law’s requirement that the burden of proof be placed on the Authorities: the two blocks to the burden of proof, on opposite sides of the fence ⚖️ Firstly, the opposition already observed between the General Evidentiary System and the Compliance System📎[95] is exacerbated here. Since Compliance Law is an Information system, it implies an “obligation to collaborate” on the part of the company, which is a manifestation of its compliance obligation to encourage the gathering of the information needed to combat efficaciously the systemic risk for which the authorities or the hierarchical superior are themselves responsible. But Repressive Law, which remains governed by the guiding principles of Criminal Law, which is expressed through Criminal Procedural Law, implies the fundamental subjective right of the person who is destined to suffer the legitimate violence of the sanction not to collaborate, i.e. not to bear the burden of proof.

In this way, two fundamental rules – one based on information, the other on innocence – come into conflict, since the “round of the burdens of proof”📎[96] must be blocked.

 

38. The happy and fragile balance of European Union case law ⚖️ However, the legal system is always readjusting antinomies. Thus, as described at greater length elsewhere,📎[97] the Court of Justice of the European Union, in its judgment of 2 February 2021, DB v. Consob,📎[98] dissociating the burden of plausibility from the burden of proof,📎[99] states that the internal or external authority (manager, or supervisory authority for example) may call to account the company or its employee or the third party for whom it is responsible. This reverses the burden of proof, but the burden of proof which then falls on the company, the employee or the third party is transformed by the principle of Repressive Law: the onus is not on the employee to prove his innocence, which would be inadmissible, or even to cooperate fully; they must demonstrate the prospect of a penalty, a likelihood that triggers for them the rights of defence, a concept distinct from the adversarial principle, which gives them in particular the fundamental right to remain silent, producing ex ante the subjective right not to collaborate.

 

IV. Relevant Means of Proof in Compliance Law

39. Evidence of Compliance Obligations ⚖️ Because the Law requires pre-established structures, such as plans, mapping, training, etc., it is essential to keep track of them since the company must show at all times that, not only is this established, but that the company also controls that it is established[A9] [A10] . Thus, the audit mechanisms for these “compliance structures” are both a management method and a method of proof for everyone. It is remarkable in this respect that American Law requires, but often limits, compliance, particularly in environmental and climate matters, more to Information Obligation on what the company is doing than to an Obligation to take Positive Action in environmental and climate matters. This is notably the position of the SEC. However, designing Compliance Law around the obligation to provide Information means making Compliance Law primarily an Evidentiary System.📎[100] The continuum between Regulatory Law and Compliance Law thus shows its full force, since Law can have a more or less restrictive conception of the obligation to “inform others.”

 

40. The means required to prove the Information is Effective, Efficacious, and Efficient ⚖️ Law has moved on from the right to information to the obligation to inform, then to the obligation to make information understood, to the right to intelligibility. The structural tools of compliance must enable all those concerned to appreciate the risks and goals pursued by the Compliance Tools put in place, if only to participate in them. This intelligibility, which is at the heart of Data Law, must be organised structurally ex ante, in particular through the intelligibility of algorithms, which goes beyond their transparency, and which is fully part of Compliance Law. The burden of proving the intelligibility of algorithmic mechanisms, which makes it possible in particular to ensure that the mechanical “consent” procedures correspond to the expression of a “will,” lies with the companies, supervised in this by the public authorities.

 

41. From Information to Training. Training as Compliance Proof ⚖️ Even if there are no specific training obligations, which is rare nowadays,📎[101] the result for the company is that training provides information in the form of intelligibility of the standard that the company itself is responsible for, both internally and externally. In so doing, the company proves that it is doing its best to ensure that compliance requirements are understood, by spreading the “Compliance Culture” that the public authorities are looking for.

 

42. Does the obligation to prove give rise to an obligation to construct ad hoc means of proof? ⚖️ An open question is whether, in order to prove that the company is making its “best efforts,”📎[102] it should invent the technologies required. The question arises for monitoring by digital companies when the legislator obliges them to “effectively” monitor the age of Internet users accessing services available on their websites, for instance when these services are of a pornographic nature, because new technologies are needed to control the age of users without breaching their privacy right. This compliance obligation must therefore be fulfilled by them, and its proper fulfilment monitored by the supervisory authority, which may require the installation of technology to do so,📎[103] with failure being sanctioned by the courts.📎[104] Constituting a “systemic case,”📎[105] this sort of case law could require a judicial resolution by interregulation.📎[106]

 

43. The evidence of behaviour obtained from the perspective of Compliance Monumental Goals ⚖️ However, even if structural obligations are subject to obligations of result, while behavioural obligations are subject only to obligations of means, it is nevertheless the behavioural obligations that are the most important, since through the structures it is behaviour that must be obtained: it is thanks to a “Compliance Culture” that systemically harmful actions are stopped and systemically beneficial actions spread. Consequently, this evidence, i.e. the results obtained thanks to the tools put in place, is decisive in providing others, in particular employees, supervisors, regulators, stakeholders and judges, with proof that Compliance Culture is supported by the company in order to obtain the systemically proven behaviours.

With this in mind, the company must gather all the evidence it can, daily and regardless of any prospect of litigation.

 

V. Pre-constitution of Evidence, Mirror of the Ex-Ante Nature of Compliance Law

 

44. Pre-constitution of the Compliance Evidence System, in order to never be used ⚖️ As in the case of Regulatory Law, the ideal Compliance Law is one that builds a system that never needs to be applied: for example, Banking Compliance that is so well designed and ensures the solidity of systemic banking operators and that none of them will get into difficulty, no resolution will need to be organised and the banking system will never be threatened. The triumph of Compliance Law lies in the absence of ex post. It assumes that there will never be any need for the company to have to account to a judge for the diligence it has accomplished, because no one will have the opportunity to allege liability since no damage will have occurred or no future damage is feared. So, evidence must be built up ex ante, even if, ideally, sanctions should never be imposed ex post.

Indeed, the proof that a company has fulfilled its Compliance Obligation must be reliable and available to all, to such an extent that the system itself is so strengthened that the risks affecting it do not materialise: the pre-constitution of proof is therefore a reflection of the ex ante nature of Compliance Law and constitutes, through the trust it engenders and the permanent accountability it provides, a key element of Compliance Law itself.

This is why companies need to ensure that their compliance tools are effective and efficient.

 

45. Pre-constituting the Effectiveness of Compliance Tools ⚖️ The judge is only one of the recipients of this Compliance Evidence, as public opinion is sometimes the first recipient when the effect, positive or negative, on reputation is at stake.📎[107]

Pre-constitution of effectiveness is the simplest: it is necessary, but also sufficient, to keep archived proof that the required acts have been performed, and to keep a record of the content, dates, persons, etc. of the acts. If necessary, have the register kept by a third party. If a compliance contract is entered into,📎[108] this pre-constitution must be required: it must be specified that this evidence must be provided, being either portable or disposable for the benefit of the company, and possibly for the benefit of third parties, duly listed by the company, in a closed rather than open list. If information is contained, prior authorisation may be contractually required. These clauses must be drafted with great care.

 

46. Pre-constituting the Efficacy of Compliance Tools ⚖️ The pre-constitution of the efficacy of compliance tools is more delicate. The aim is to show that the tools have achieved their purpose. This may involve preserving proof that the mapping had been “usefully” drawn up, that the training had been “assimilated” by its recipients, or even that they had made appropriate use of the knowledge assimilated. This can be invaluable pre-constituted evidence to show the company’s goodwill, because, while good faith is presumed, goodwill is not, and this is one way of establishing the latter.

 

47. The pre-constitution of the Company’s will to fulfil its Compliance Obligation by the desire to “progress” in the use of Compliance Tools ⚖️ Evidence does not exist in isolation. Indeed, it is often by bringing them together that evidence against the company emerges, with the notion of a “body of consistent evidence” increasingly becoming a “standard of proof” in Economic Law.📎[109] But this also works to the company’s advantage. The public authorities point out that the accumulation of compliance expenditure is not enough to establish compliance obligation satisfaction, suspecting that it may simply be a matter of buying impunity for an offence that Compliance Law seeks to detect or prevent, such as corruption, harassment or pollution. Conversely, a company that can prove that it has built on a failure or semi-success in using one compliance tool and replace it with another that remedies the shortcomings of the first, for example a new risk assessment method, additional training or a more appropriate determination of the people to whom the programmes are addressed, will have proved that it is effectively incorporating the “lessons” of compliance.

 

48. Proof of the Efficiency of structural and behavioural Compliance Tools ⚖️ Efficiency relates to the effect produced on the system itself. For example, greater respect for minorities in companies through quota obligations in management bodies or through compliance tools that penetrate Labour Law. Companies are not legally obliged to measure the impact of compliance on economic and social systems, especially on a global scale. But if they measure it, modify their actions to achieve greater efficiency and can provide evidence to that effect, they increase the demonstration of their “good will.”📎[110]

 

49. Proof of the Efficiency of the action of the crucial companies involved: a means and an object of proof without an underlying burden of proof ⚖️ Although a company does not have the burden of proving that it has improved Society as a whole and humanity as a whole, nor can it claim to govern society,📎[111] it nonetheless benefits from providing proof of the benefit it brings by using compliance techniques.📎[112]

 

50. Conclusion ⚖️ Building the Evidentiary Square specific to Compliance Law. This study, which lays down the prolegomena of the Compliance Evidence Law, has been written in order to build such an evidentiary square specific to Compliance Law, so that jurisdictional, contractual and soft Law practice may find common ground in the definitions, principles and reasoning, without ever sacrificing the Rule of Law.

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